Form 10-Q BioRestorative Therapies For: Mar 31

(DEBtor-in-possession)

CONDENSED
Consolidated Balance Sheets

The
accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

(debtor-inpossession)

CONDENSED
Consolidated STATEMENTS OF OPERATIONS

(Unaudited)

The
accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

(debtor-in-possession)

CONDENSED
Consolidated STATEMENTS of CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

The
accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

(DEBTOR-IN-POSSESSION)

CONDENSED
Consolidated STATEMENTS OF CASH FLOWS

(Unaudited)

The
accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

(DEBTOR-IN-POSSESSION)

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE
1 – NATURE OF THE ORGANIZATION AND BUSINESS

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
March 20, 2020 (the “Petition Date”), the Company filed a voluntary petition commencing a case (the “Chapter
11 Case”) under chapter 11 of title 11 of the U.S. Code in the United States Bankruptcy Court for the Eastern District of
New York (the “Bankruptcy Court”).

On
August 7, 2020 the Company and Auctus Fund, LLC (“Auctus”), the Company’s largest unsecured creditor and a stockholder
as of the Petition Date, filed an Amended Joint Plan of Reorganization (the “Plan”) and on October 30, 2020, the Bankruptcy
Court entered an order (the “Confirmation Order”) confirming the Plan, as amended. Amendments to the Plan are reflected
in the Confirmation Order. On November 16, 2020 (the “Effective Date”), the Plan became effective. See Note 10 –
Subsequent Events for additional information.

Nature
of the Business

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. 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. 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.

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. At March
31, 2020, the Company had an accumulated deficit of approximately $86,121,000 and working capital deficiency of approximately
$18,363,000 For the three months ended March 31, 2020, the Company had a loss from operations of approximately $819,000
and negative cash flows from operations of approximately $449,000. The Company’s operating activities consume the
majority of its cash resources. The Company anticipates that it will continue to incur operating losses as it executes its development
plans for 2021, as well as other potential strategic and business development initiatives. In addition, the Company has had and
expects to have negative cash flows from operations, at least into the near future. The Company has previously funded, and plans
to continue funding, these losses primarily through current cash on hand received subsequent to quarter end and additional
infusions of cash from equity and debt financing.

The
Company believes the following has been able to mitigate the above factors with regards to its ability to continue as a going
concern: (i) as part of its Chapter 11 reorganization approximately $14,700,000 in outstanding debt and other liabilities were
exchanged for (a) shares of common stock, (b) new convertible notes or (c) new convertible notes and warrants to purchase shares
of common stock; (ii) the Company secured DIP financing during its Chapter 11 Case in the amount of $1,189,413 as well as an aggregate
amount of $3,848,548 in debt financing from Auctus and others as part of the Company’s Chapter 11 reorganization, to sustain
operations; and (iii) pursuant to the plan of reorganization, Auctus is required to loan to the Company, as needed and subject
to the Company becoming current in its SEC reporting obligations, an additional amount equal to $3,500,000, less the amount of
Auctus’ DIP financing ($1,226,901, inclusive of accrued interest) and its DIP costs. As a result of the above, the Company
believes it has sufficient cash to fund operations for the twelve months subsequent to the filing date. In addition, the Company
is seeking further funding to commence and complete a Phase 2 clinical study of the use of BRTX-100.

There
is no assurance that these funds will be sufficient to enable the Company to fully complete its development activities or attain
profitable operations. If the Company is unable to obtain such 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 accounting principles
generally accepted in the United States of America (“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

Basis
of Presentation

The
accompanying unaudited condensed consolidated financial information as of and for the three months ended March 31, 2020 and 2019
has been prepared in accordance with GAAP for interim financial information and with the instructions to Quarterly Report on Form
10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting
only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and
the operating results and cash flows for such periods. Operating results for the three months ended March 31, 2020 are not necessarily
indicative of the results that may be expected for the entire year or for any other subsequent interim period.

Certain
information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted
pursuant to the rules of the U.S. Securities and Exchange Commission (the “SEC”). These unaudited financial statements
and related notes should be read in conjunction with the Company’s audited financial statements for the year ended December
31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 18, 2021.

Principles
of Consolidation

The
unaudited condensed consolidated financial statements include include the accounts of the Company and its wholly-owned subsidiary
Stem Pearls. Intercompany accounts and transactions have been eliminated upon consolidation.

Use
of Estimates

The
preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions, revenue and expenses and disclosure
of contingent liabilities at the date of the unaudited condensed consolidated financial statements. The Company bases its estimates
and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable.
As future events and their effects cannot be determined with precision, actual results could differ from these estimates which
may cause the Company’s future results to be affected.

The
Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation
of the accompanying unaudited condensed consolidated financial statements. Significant estimates include the carrying value of
intangible assets, deferred tax asset and valuation allowance, estimated fair value of derivative liabilities stemming from convertible
debt securities, and assumptions used in the Black-Scholes-Merton pricing model, such as expected volatility, risk-free interest
rate, and expected divided rate.

Revenue

The
Company derives all of its revenue pursuant to a license agreement between the Company and a stem cell treatment company (“SCTC”)
entered into in January 2012, as amended in November 2015. Pursuant to the license agreement, the SCTC granted to the Company
a license to use certain intellectual property related to, among other things, stem cell disc procedures and the Company has 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 sublicenses, the SCTC has
agreed to pay the Company royalties on a per disc procedure basis.

Practical
Expedients

As
part of ASC Topic 606, the Company has adopted several practical expedients including:

Contract
Modifications

There
were no contract modifications during the three months ended March 31, 2020. Contract modifications are not routine in the performance
of the Company’s contracts.

Cash

The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
There were no cash equivalents as of March 31, 2020 or December 31, 2019.

Accounts
Receivable

Accounts
receivable are reported at their outstanding unpaid principal balances, net of allowances for doubtful accounts. The Company periodically
assesses its accounts and other receivables for collectability on a specific identification basis. The Company provides for allowances
for doubtful receivables based on management’s estimate of uncollectible amounts considering age, collection history, and
any other factors considered appropriate. Payments are generally due within 30 days of invoice. The Company writes off accounts
receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible. The Company did not record
an allowance for doubtful accounts as of March 31, 2020 and December 31, 2019, respectively.

Property
and Equipment

Property
and equipment are recorded at cost. Depreciation is computed using straight-line method over the estimated useful lives of the
related assets, generally three to fifteen years. Expenditures that enhance the useful lives of the assets are capitalized and
depreciated. Computer equipment costs are capitalized, as incurred, and depreciated on a straight-line basis over a range of 3
– 5 years.

Leasehold
improvements are amortized over the lesser of (i) the useful life of the asset, or (ii) the remaining lease term. Maintenance
and repairs are charged to expense as incurred. The Company capitalizes cost attributable to the betterment of property and equipment
when such betterment extends the useful life of the assets. At the time of retirement or other disposition of property and equipment,
the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected
in operations.

Impairment
of Long-Lived Assets

The
Company reviews long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing
the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation
is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by
other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values,
depending on the nature of the assets. During
the three months ended March 31, 2020 and 2019, the Company did not record a loss on impairment.

Intangible
Assets

The
Company records its intangible assets at cost in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles
– Goodwill and Other. Definite lived intangible assets are amortized over their estimated useful life using the straight-line
method, which is determined by identifying the period over which the cash flows from the asset are expected to be generated.

Advertising
and Marketing Costs

The
Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $22,008 and $15,837
for the three months ended March 31, 2020 and 2019, respectively, and are recorded in marketing and promotion on the unaudited
condensed consolidated statements of operations.

Fair
Value Measurements

As
defined in ASC 820, “Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).
The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including
assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable,
market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to
measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement
framework applies at both initial and subsequent measurement.

See
Note 7 – Derivative Liabilities for additional details regarding the valuation technique and assumptions used in valuing
Level 3 inputs.

Net
Loss per Common Share

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 vested outstanding options and warrants are considered potential common stock. The dilutive effect, if any, of stock
options and warrants are calculated using the treasury stock method. All outstanding convertible notes are 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, and convertible notes have been excluded
from the Company’s computation of net loss per common share for the three months ended March 31, 2020 and 2019.

The
following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including
these potential shares was antidilutive due to the Company’s net loss position even though the exercise price could be less
than the average market price of the common shares:

(1)
As of March 31, 2020 and 2019, many of the convertible notes had variable conversion prices and the shares issuable were estimated
based on the market conditions. Pursuant to the note agreements, there were 360,796,730 and 56,462,559 shares of common
stock reserved for future note conversions as of March 31, 2020 and 2019, respectively.

Stock-based
Compensation

The
Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement
and recognition of compensation expense for all stock-based awards made to employees, including employee stock options, in the
statements of operations.

For
stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date
fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires
management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent
with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. For awards subject
to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation
expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which
is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant
and revised.

Pursuant
to Accounting Standards Update (“ASU”) 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to
Nonemployee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services
in accordance ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the
process for valuing employee stock options noted above.

Since
the shares underlying the Company’s 2010 Equity Participation Plan (the “Plan”) are registered, the Company
estimates the fair value of the awards granted under the Plan based on the market value of its freely tradable common stock as
reported on the OTC Markets. On February 3, 2020, the Company was advised by OTC Markets Group that, based upon the closing bid
price of the Company’s common stock being less than $0.001 per share for five consecutive trading days, the Company’s
common stock was moved from the OTCQB Market to the Pink Market effective at market open on February 10, 2020. The fair value
of the Company’s restricted equity instruments was estimated by management based on observations of the cash sales prices
of both restricted shares and freely tradable shares. Awards granted to directors are treated on the same basis as awards granted
to employees. Upon the exercise of an option or warrant, the Company issues new shares of common stock out of its authorized shares.

Income
Taxes

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed
consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred
tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The
Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax
returns. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax
basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is
recorded when it is “more likely than not” that a deferred tax asset will not be realized. At March 31, 2020 and December
31, 2019, the Company’s net deferred tax asset has been fully reserved.

For
uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain
tax positions in the unaudited condensed consolidated financial statements. The Company’s practice is to recognize interest
and penalties, if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements
of operations when a determination is made that such expense is likely.

Derivative
Financial Instruments

The
Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify
as derivative financial instruments to be separately accounted for in accordance with Topic 815 of the Financial Accounting Standards
Board (“FASB”) ASC. The accounting treatment of derivative financial instruments requires that the Company record
embedded conversion options (“ECOs”) and any related freestanding instruments at their fair values as of the inception
date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating,
non-cash income or expense for each reporting period at each balance sheet date. Conversion options are recorded as a discount
to the host instrument and are amortized as amortization of debt discount on the unaudited condensed consolidated financial statements
over the life of the underlying instrument. The Company reassesses the classification of its derivative instruments at each balance
sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date
of the event that caused the reclassification.

The
Multinomial Lattice Model and Black-Scholes Model were used to estimate the fair value of the ECOs of convertible notes payable,
warrants, and stock options that are classified as derivative liabilities on the unaudited condensed consolidated balance sheets.
The models include subjective input assumptions that can materially affect the fair value estimates. The expected volatility is
estimated based on the actual volatility during the most recent historical period of time equal to the weighted average life of
the instruments.

Sequencing
Policy

Under
ASC 815-40-35 (“ASC 815”), the Company has adopted a sequencing policy, whereby, in the event that reclassification
of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate
it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares
will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving
the first allocation of shares. Pursuant to ASC 815, issuances of securities to the Company’s employees and directors, or
to compensate grantees in a share-based payment arrangement, are not subject to the sequencing policy.

Leases

In
February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”)). The standard requires all leases that have
a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use
(“ROU”) asset initially measured at the present value of amounts expected to be paid over the term. Recognition of
the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing
lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over
the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization
of the ROU asset) and interest expense (for interest on the lease liability). This standard, which the Company adopted on January
1, 2019, was applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest
comparative period presented in the unaudited condensed consolidated financial statements. The adoption of ASU 2016 – 02 did not
have a material impact on the Company’s unaudited condensed consolidated financial statements and related disclosures.

A
lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period
of time in exchange for consideration. On January 1, 2019, the Company adopted ASC 842 and it primarily affected the accounting
treatment for operating lease agreements in which the Company is the lessee.

In
accordance with ASC 842, Leases, the Company recognized an ROU asset and corresponding lease liability on its balance sheets
for its office space lease agreement. See Note 9 for further discussion, including the impact on the Company’s unaudited
condensed consolidated financial statements and related disclosures.

ROU
assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for
minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend
or terminate the lease if it is reasonably certain that the Company will exercise that option.

Leases
in which the Company is the lessee are comprised of office rental. All of the leases are classified as operating leases. The Company
has a lease agreement for office space with a remaining term of 4.75 years as of March 31, 2020.

Recently
Issued Accounting Standards

In
January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill
Impairment, which eliminated the calculation of implied goodwill fair value. Instead, companies will record an impairment charge
based on the excess of a reporting unit’s carrying amount of goodwill over its fair value. This guidance simplifies the
accounting as compared to prior GAAP. The guidance is effective for fiscal years beginning after December 15, 2019. This standard,
adopted as of January 1, 2020, had no material impact on the Company’s unaudited condensed consolidated financial statements.

All
newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

NOTE
3 – INTANGIBLE ASSETS

The
Company is a party to a license agreement with the SCTC (as amended) (the “SCTC Agreement”). Pursuant to the SCTC
Agreement, the Company obtained, among other things, a worldwide, exclusive, royalty-bearing license from the SCTC to utilize
or sublicense a certain medical device patent for the administration of specific cells and/or cell products to the disc and/or
spine (and other parts of the body) and a worldwide (excluding Asia and Argentina), exclusive, royalty-bearing license to utilize
or sublicense a certain method for culturing cells. Pursuant to the license agreement with the SCTC, unless certain performance
milestones had been or are satisfied, the Company would have been required to pay to the SCTC $150,000 by April 2017 and an additional
$250,000 by April 2019 in order to maintain its exclusive rights with regard to the disc/spine technology. In February 2017, the
Company received authorization from the Food and Drug Administration (the “FDA”) to proceed with a Phase 2 clinical
trial. Based upon such authorization, the Company has satisfied a performance milestone such that the Company was not required
to pay to the SCTC a minimum amount of $150,000 by April 2017 to retain exclusive rights with regard to the disc/spine technology.
In addition, the Company believes that it has until February 2022 to complete the Phase 2 clinical trial in order to satisfy the
final performance milestone such that the Company was not required to pay the additional $250,000 by April 2019 pursuant to the
SCTC Agreement to maintain its exclusive rights.

Intangible
assets consist of the following:

Amortization
of intangible assets consists of the following:

NOTE
4 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued
expenses and other current liabilities consist of:

NOTE
5 – NOTES PAYABLE

A
summary of the notes payable activity during the three months ended March 31, 2020 is presented below:

Related
Party Notes

As
of March 31, 2020 and December 31, 2019, related party notes consisted of notes payable issued to certain directors of the Company,
family members of an officer of the Company, and the Tuxis Trust (the “Trust”). A former director and principal stockholder
of the Company (the “Director/Principal Stockholder”) serves as a trustee of the Trust, which was established for
the benefit of his immediate family.

During
the three months ended March 31, 2020, the Company issued to a former board member notes payable in the aggregate principal amount
of $353,762, which bore interest at the rate of 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum and provided for original maturity date of March 10, 2020. As of
March 31, 2020, these notes are in default. Subsequent to March 31, 2020, pursuant to the Bankruptcy (See Note 10 – Subsequent
Events), these notes were exchanged for a Secured Convertible Note in a principal amount of $490,698.

Convertible
Notes

Issuances

During
the three months ended March 31, 2020, the Company issued to a certain lender a convertible note payable in the principal amount
of $88,000 for aggregate cash proceeds of $85,000 The difference was recorded as a debt discount and will be amortized over the
term of the note. The convertible note bore interest at 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum payable at maturity with an original maturity date of January
31, 2021. The outstanding principal and accrued interest was convertible after 180 days at a conversion price of 61{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the lowest
daily volume weighted average price over the twenty days prior to the conversion date. The convertible note contained a cross-default
provision and was in default as of March 31, 2020. As a result, the convertible note bore a default interest of 22{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum.
Subsequent to March 31, 2020, pursuant to the Bankruptcy (see Note 10 – Subsequent Events), the convertible note, in the aggregate
amount of $155,000 (including principal and accrued interest), was exchanged for 15,500,000 chares of the Company’s common
stock. See below within Note 7- Derivative Liabilities for additional details regarding the ECO of the convertible note.

Embedded
Conversion Options and Note Provisions

As
of March 31, 2020, outstanding convertible notes in the aggregate principal amount of $5,611,168 were convertible into shares
of common stock of the Company as follows: (i) $911,485 of aggregate principal amount of convertible notes were convertible at
a fixed price ranging from $0.25 to $2.00 per share for the first six months following the respective issue date, and thereafter
at a conversion price generally equal to 58{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the fair value of the Company’s stock, subject to adjustment, until the
respective note had been paid in full, (ii) $4,096,724 of aggregate principal amount of convertible notes were convertible generally
at a range of 58{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to 65{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the fair value of the Company’s stock, subject to adjustment, depending on the note, and (iii)
$602,959 of aggregate principal amount of convertible notes were convertible into shares of common stock of the Company at a conversion
price ranging from $0.50 to $0.60 per share, subject to adjustment, and five-year warrants to purchase common stock of the Company
in the same ratio. The warrants provide for an exercise price ranging from $0.75 to $0.80 per share, subject to adjustment. Convertible
notes in the aggregate principal amount of $340,000 provided for a mandatory conversion into common stock of the Company and warrants
to purchase common stock of the Company in the same ratio upon the completion of an underwritten public offering by the Company
of its securities whereby the conversion price was to be equal to the lower of the respective original conversion terms, or 75{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
of the offering price for the shares of common stock of the Company, or units of shares of common stock of the Company and warrants,
as the case may be, sold pursuant to the public offering. The Company analyzes the ECOs of its convertible notes at issuance to
determine whether the ECO should be bifurcated and accounted for as a derivative liability or if the ECO contains a beneficial
conversion feature. See below within this Note 5 – Notes Payable – Convertible Notes – Embedded Conversion Options
and Note Provisions and Note 7 – Derivative Liabilities for additional details regarding the ECOs of the convertible notes.

As
of March 31, 2020, a portion of convertible notes with an aggregate principal balance of $1,386,500, which were not yet convertible,
were to become convertible into shares of the Company’s common stock subsequent to March 31, 2020 at a conversion price
generally equal to 58{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the fair value of the Company’s stock, subject to adjustment, until the respective notes had been
paid in full.

As
of March 31, 2020, outstanding convertible notes in the aggregate principal amount of $1,263,750 had prepayment premiums, whereby,
in the event that the Company elected to prepay certain notes during the one hundred eighty-day period following the issue date,
the respective holder was entitled to receive a prepayment premium of up to 135{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, depending on the note, on the then outstanding
principal balance including accrued interest.

As
of March 31, 2020, outstanding convertible notes in the aggregate principal amount of $4,324,882 had most favored nation (“MFN”)
provisions, whereby, so long as such respective note was outstanding, upon any issuance by the Company of any security with certain
identified provisions more favorable to the holder of such security, then at the respective holder’s option, those more
favorable terms were to become a part of the transaction documents with the holder. As of March 31, 2020, notes with applicable
MFN provisions were convertible using MFN conversion prices equal to 58{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the fair market value of the Company’s stock,
as defined.

During
the three months ended March 31, 2020, the Company determined that certain ECOs of issued or extended convertible notes were derivative
liabilities. The aggregate issuance date value of the bifurcated ECOs was $2,493,531, of which $2,377,818 was recorded as a debt
discount and is being amortized over the terms of the respective convertible notes. As of March 31, 2020, outstanding notes totaling
$4,201,019 were in default. See Note 7 – Derivative Liabilities for additional details.

The
conversion rights discussed above were subject to the Company’s Chapter 11 reorganization discussed below.

Conversions,
Exchanges and Other

During
the three months ended March 31, 2020, the Company and certain lenders exchanged convertible notes with bifurcated ECOs with an
aggegate net carrying amount of $1,580,587 (including an aggregate of $523,516 of principal less debt discount of $234,301, $126,043
of accrued interest and $1,165,329 related to the separated ECOs accounted for as derivative liabilities) for an aggregate of
1,515,799,750 shares of the Company’s common stock at conversion prices ranging from $0.0001 and $0.01 per share. In addition,
prior to the Petition Date, certain lenders intended to exchange outstanding debt (inclusive of accrued interest) for shares of
the Company’s common stock; however, the Company did not have sufficient shares authorized or reserved to effect the exchanges.
As such, the outstanding debt was exchanged as part of the Plan at a rate of 100 shares for each dollar of the allowable claim
at the Effective Date.

Chapter
11 Reorganization

On
March 20, 2020, the Company filed a voluntary petition commencing a case under chapter 11 of title 11 of the U.S. Code in the
United States Bankruptcy Court for the Eastern District of New York. Pursuant to the Bankruptcy (see Note 10 – Subsequent
Events), for any outstanding principal and interest at the date of the Company’s Chapter 11 petition (except for creditors
who provided additional debt financing in connection with the Bankruptcy), 100 shares of the Company’s common stock
were issued for each dollar of allowed claim, with such shares subject to leak-out restrictions prohibiting the holder
from selling, without the consent of the Company, more than 33{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued shares during each of the three initial 30 day periods
following the Effective Date. As a result of the chapter 11 reorganization, pursuant to ASC 852, Reorganizations, the
Company has recorded all prepetition liabilities at the expected allowable claim amounts as of March 31, 2020. This resulted in
the Company amortizing the remaining debt discount of $2,583,107 to interest expense on the unaudited condensed consolidated statements
of operations.

NOTE
6 – Stockholders’ DEFICIT

Authorized
Capital

Subsequent
to March 31, 2020 and pursuant to the Chapter 11 plan of reorganization (see Note 10 – Subsequent Events), the Company filed a
Certificate of Amendment to its Certificate of Incorporation pursuant to which, among other things, the number of shares of common
stock authorized to be issued by the Company has been increased to 300,000,000,000 and the par value of the shares of its common
stock has been reduced to $0.0001 per share. The effect of the change in par value has been reflected in the statement of changes
in stockholders’ deficit for the three months ended March 31, 2020 and 2019.

Warrant
and Option Valuation

The
Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. The expected
term used for warrants and options issued to non-employees is the contractual life and the expected term used for options issued
to employees and directors is the estimated period of time that options granted are expected to be outstanding. The Company utilizes
the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option
grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period
of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry.
The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term
consistent with the expected term of the instrument being valued.

Common
Stock and Warrant Offering

During
the three months ended March 31, 2020, the Company issued 1,000,000 shares of the Company’s common stock and a five-year
immediately vested warrant for the purchase of 1,000,000 shares of the Company’s common stock with an exercise price of
$0.015 per share to a certain investor for gross proceeds of $10,000. The warrants had an aggregate grant date fair value of $10,000.
The warrants were subject to the Company’s sequencing policy and, as a result, were initially recorded as derivative liabilities.
See Note 7 – Derivative Liabilities for additional details.

Warrant
Activity Summary

In
applying the Black-Scholes option pricing model to warrants granted or issued, the Company used the following assumptions:

The
weighted average estimated fair value of the warrants granted during the three months ended March 31, 2020 and 2019 was approximately
$0.01 and $0.51 per share, respectively.

A
summary of the warrant activity during the three months ended March 31, 2020 is presented below:

The
following table presents information related to stock warrants at March 31, 2020:

Stock
Options

In
applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:

The
Company did not issue stock options during the three months ended March 31, 2020.

The
weighted average estimated fair value of the stock options granted during the three months ended March 31, 2019 was approximately $44,247
per share.

A
summary of the option activity during the three months ended March 31, 2020 is presented below:

The
following table presents information related to stock options at March 31, 2020:

The
following table presents information related to stock option expense:

NOTE
7 – DERIVATIVE LIABILITIES

The
following table sets forth a summary of the changes in the fair value of Level 3 derivative liabilities that are measured at fair
value on a recurring basis:

In
applying the Multinomial Lattice and Black-Scholes option pricing models to derivatives issued and outstanding during the three
months ended March 31, 2020 and 2019, the Company used the following assumptions:

During
the three months ended March 31, 2020, the Company recorded new derivative liabilities in the aggregate amount of $2,473,532 and
$10,000 related to the ECOs of certain convertible notes payable and warrants subject to sequencing, respectively. See Note 5
– Notes Payable – Convertible Notes for additional details. See Note 6 – Stockholders’ Deficit for warrants
issued and deemed to be derivative liabilities.

During
the three months ended March 31, 2020, the Company extinguished an aggregate of $1,165,329 of derivative liabilities in connection
with the exchanges of certain convertible notes payable into shares of the Company’s common stock. See Note 5 – Notes
Payable – Conversions, Exchanges and Other for additional details.

On
March 31, 2020, the Company recomputed the fair value of ECOs recorded as derivative liabilities to be $4,375,231. The Company
recorded a loss on the change in fair value of these derivative liabilities of $2,141,069 for the three months ended March 31,
2020.

On
March 31, 2020, the Company recomputed the fair value of the derivative liabilities related to outstanding warrants to be $-.
These warrants are either redeemable for cash equal to the Black-Scholes value, as defined, at the election of the warrant holder
upon a fundamental transaction pursuant to the warrant terms or were issued subsequent to the commencement of sequencing. The
Company did not record a gain or loss on the change in fair value of these derivative liabilities for the three months ended March
31, 2020.

Note
8 – COMMITMENTS AND CONTINGENCIES

Operating
Lease

The
Company is a party to a lease for 6,800 square feet of space located in Melville, New York (the “Melville Lease”)
with respect to its corporate and laboratory operations. The Melville Lease was scheduled to expire in March 2020 (subject to
extension at the option of the Company for a period of five years) and provided for an annual base rental during the initial term
ranging between $132,600 and $149,260. In June 2019, the Company exercised its option to extend the Melville Lease and entered
into a lease amendment with the lessor whereby the five-year extension term commenced on January 1, 2020 with annual base rent
ranging between $153,748 and $173,060. Rent expense for the Melville office was $- and $30,000 for the three months ended March
31, 2020 and 2019, respectively. See Note 9 – Leases for additional detail.

Litigation,
Claims and Assessments

Coventry
Enterprises, LLC

On
February 11, 2020, pursuant to an Order to Show Cause of the United States District Court of the Eastern District of New York
(the “Court”), in the matter of Coventry Enterprises, LLC vs. BioRestorative Therapies, Inc., pending the hearing
of the plaintiff’s application for a preliminary injunction, the Court issued a temporary restraining order enjoining the
Company from issuing any additional shares of stock except for purposes of fulfilling the plaintiff’s share reserve requests
or conversion requests until such reserve requests were fulfilled and enjoining the Company from reserving authorized shares for
any other party until the plaintiff’s reserve requests were fulfilled. Pursuant to a hearing held on February 13, 2020,
the temporary restraining order with regard to the Company issuing shares of common stock was not continued.

On
March 11, 2020, the Court ordered that the Company (i) convene and hold a special meeting, by no later than March 18, 2020, of
the Board of Directors of the Company (the “Board”), for approval of certain changes to the shares of the Company,
as set forth below; (ii) approve a reverse split and/or a stock consolidation, solely of the Company’s outstanding shares,
at a ratio of 1,000 to 1, (iii) approve of the continuation of the Company’s then total authorized shares of common stock
at 2,000,000,000 shares; and (iv) to call a special meeting of stockholders of the Company, within ten days of the special meeting
of the Board and by not later than March 25, 2020, to approve the foregoing. On March 18, 2020, the Board considered the matter,
and, based upon the Court order, determined to approve the foregoing items, including the 1,000 to 1 reverse split, subject to
the Company having available funds to effectuate such items. As discussed above in this Note 13 under “Chapter 11 Reorganization,”
on March 20, 2020, the Company filed a petition commencing its Chapter 1 Case. As of the date of this report, the Company has
not effected the reverse split.

The
Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

Bonus
Accruals

As
of March 31, 2020 and December 31, 2019, the Company had remaining accruals of approximately $0 and $27,000, respectively, for
bonus milestones which were achieved in prior years and remain unpaid.

Appointment
or Departure of Directors and Certain Officers

The
Company and Mark Weinreb, its former Chief Executive Officer (“ Former CEO”), were parties to an employment agreement
that, as amended, was to expire on December 31, 2019. Pursuant to the employment agreement, as amended, in the event that (a)
the Former CEO’s employment was terminated by the Company without cause, or (b) the Former CEO terminated his employment
for “good reason” (each as defined in the employment agreement), or (c) the term of the Former CEO’s employment
agreement was not extended beyond December 31, 2019 and within three months of such expiration date, his employment was terminated
by the Company without “cause” or the Former CEO terminated his employment for any reason, the Former CEO was to be
entitled to receive severance in an amount equal to his then annual base salary and certain benefits, plus $100,000 (in lieu of
bonus). Further, in the event that the Former CEO’s employment was terminated by the Company without cause, or the Former
CEO terminated his employment for “good reason”, following a “change in control” (as defined in the employment
agreement), the Former CEO would be entitled to receive severance in an amount equal to one and one-half times his then annual
base salary and certain benefits, plus $300,000 (in lieu of bonus). Additionally, as part of the amended employment agreement,
the Former CEO was entitled to new performance-based cash bonuses payable for the years ending December 31, 2018 and 2019, such
that an aggregate of up to 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the Former CEO’s then annual base salary per annum could be earned for such year pursuant
to the satisfaction of such goals. The Former CEO resigned his employment with the Company on November 16, 2020, the effective
date of the Chapter 11 reorganization. Based upon such termination of employment, the Former CEO was entitled to receive his severance
of $400,000 and certain benefits plus $100,000, and the option accelerations as discussed above. The severance amount was generally
considered an unsecured claim in the Company’s Chapter 11 Case and the Former CEO received shares of the Company’s
common stock in exchange for such claim in a manner consistent with other unsecured creditors.

On
March 16, 2020, the Company and Mark Weinreb, its Chief Executive Officer, entered into an agreement pursuant to which, among
other matters, the term of his employment agreement with the Company was extended to the earlier of (i) September 30, 2020 or
(ii) the effective date of a plan of liquidation of the Company.

Conversion
of Convertible Notes

During
the three months ended March 31, 2020, certain lenders requested to exchange a portion of their outstanding convertible note principal
and accrued interest for shares of the Company’s common stock. As of the Petition Date these shares had yet to be issued
to the lenders; however, the shares of the Company’s common stock issued for unsecured claims as part of the Plan to the
certain lenders represented the aggregate unsecured claims less the principal and accrued interest that was represented in the
uneffected exchanges. The Company believes that there may be a potential contingency related to the non-issued shares that would
be settled in shares of the Company’s common stock and not monetary compensation.

Note
9 – LEASES

With
the adoption of ASC 842, operating lease agreements are required to be recognized on the balance sheet as ROU assets and corresponding
lease liabilities.

On
August 1, 2019, the Company recognized ROU assets and lease liabilities of $638,246. The Company elected to not recognize ROU
assets and lease liabilities arising from short-term office leases (leases with initial terms of twelve months or less, which
are deemed immaterial) on the balance sheets. On June 1, 2019, the Company exercised its right to extend its existing lease of
office space for an additional five years.

When
measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its
estimated incremental borrowing rate at August 1, 2019. The weighted average incremental borrowing rate applied was 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}.

The
following table presents net lease cost and other supplemental lease information:

Future
minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the three months
ended March 31, 2020:

Note
10 – SUBSEQUENT EVENTS

Chapter
11 Reorganization

On
August 7, 2020, the Company and Auctus, the Company’s largest unsecured creditor and a stockholder as of the Petition Date,
filed an Amended Joint Plan of Reorganization (the “Plan”) and on October 30, 2020, the Bankruptcy Court entered an
order (the “Confirmation Order”) confirming the Plan, as amended. Amendments to the Plan are reflected in the Confirmation
Order. On November 16, 2020 (the “Effective Date”), the Plan became effective.

The
material features of the Plan, as amended and confirmed by the Confirmation Order, are as follows:

In
addition, Auctus shall be entitled to receive a Secured Convertible Note, a Class A Warrant and a Class B Warrant in exchange
for its allowed DIP Costs and allowed Plan costs in a manner in which the DIP Funding was treated.

The
claim arising from the secured promissory notes of the Company, dated February 20, 2020 and February 26, 2020, in the original
principal amounts of $320,200.49 and $33,561.50, respectively, issued to John Desmarais (“Desmarais”) (collectively,
the “Desmarais Notes”), was treated as an allowed secured claim in the aggregate amount of $490,698.81 and was exchanged
for a Secured Convertible Note in such amount.

Pursuant
to the Plan, on the Effective Date, the Company filed a Certificate of Amendment to its Certificate of Incorporation pursuant
to which, among other things, the number of shares of common stock authorized to be issued by the Company has been increased to
300,000,000,000 and the par value of the shares of common stock has been reduced to $0.0001 per share.

Debtor-in-Possession
Financing

In
connection with the Chapter 11 Case, the Company received debtor-in-possession loans of $1,189,413 in the aggregate from Auctus.

The
proceeds from the DIP Funding were used (a) for working capital and other general purposes of the Company; (b) United States Trustee
fees; (c) Bankruptcy Court approved professional fees and other administrative expenses arising in the Chapter 11 Case; and (d)
interest, fees, costs and expenses incurred in connection with the DIP Funding, including professional fees.

The
maturity date of the DIP Funding was to be the earliest to occur of (a) July 6, 2020; (b) ten days following entry of an order
confirming a chapter 11 plan in the Chapter 11 Case; (c) ten days following the entry of an order approving the sale of the Company
or the Company’s assets; or (d) the occurrence of an event of default under the promissory note evidencing the DIP Funding
(the “DIP Note”) following any applicable grace or cure periods.

Interest
on the outstanding principal amount of the DIP Note was to be payable in arrears on the maturity date at the rate of 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum.
Upon the occurrence and during the continuance of an event of default, all obligations under the DIP Note were to bear interest
at a rate equal to the then current rate plus an additional 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum.

As
discussed above, pursuant to the Plan, the obligation to Auctus with respect to the DIP Funding has been exchanged for a Second
Convertible Note.

Appointment
or Departure of Directors and Certain Officers

On
November 16, 2020, as contemplated by the Plan, Mr. Weinreb, A. Jeffrey Radov, Paul Jude Tonna and Robert B. Catell resigned as
directors of the Company and Mr. Weinreb resigned as the Company’s President, Chief Executive Officer and Chairman of the
Board.

Effective
as of the Effective Date, as contemplated by the Plan, Lance Alstodt was elected President, Chief Executive Officer, Chairman
of the Board and a director of the Company and Francisco Silva, the Company’s Vice President, Research and Development,
was elected a director of the Company.

On
March 18, 2021, Nickolay Kukekov was elected a director of the Company.

On
March 18, 2021, the Company’s Board of Directors adopted the BioRestorative Therapies, Inc. 2021 Stock Incentive Plan (the
“Plan”). Pursuant to the Plan, a total of 4,700,000,000 shares of common stock are authorized to be issued pursuant
to the grant of stock options, restricted stock units, restricted stock and stock appreciation rights.

On
March 18, 2021, the Company and Lance Alstodt, its President, Chief Executive Officer and Chairman of the Board, entered into
an employment agreement (the “Alstodt Employment Agreement”) which provides for a term ending on March 18, 2026. Pursuant
to the Alstodt Employment Agreement, Mr. Alstodt is entitled to receive initially an annual salary of $250,000. Mr. Alstodt’s
annual salary will increase by $50,000 per year. In addition, in the event certain performance goals are met, Mr. Alstodt’s
salary will increase by $150,000. The Alstodt Employment Agreement also provides for the grant to Mr. Alstodt pursuant to the
Plan of (i) a ten year option for the purchase of 1,173,917,974 shares of common stock of the Company and (ii) 586,958,987 restricted
stock units of the Company (“RSUs”).

On
March 18, 2021, the Company and Francisco Silva, its Vice President, Research and Development, entered into an employment agreement
(the “Silva Employment Agreement”) which provides for a term ending on March 18, 2026. Pursuant to the Silva Employment
Agreement, Mr. Silva is entitled to receive initially an annual salary of $225,000. Mr. Silva’s annual salary will increase
by $50,000 per year. In addition, in the event certain performance goals are met, Mr. Silva’s salary will increase by $150,000.
The Silva Employment Agreement also provides for the grant to Mr. Silva pursuant to the Plan of (i) a ten year option for the
purchase of 1,173,917,974 shares of common stock of the Company and (ii) 586,958,987 RSUs.

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, 2019, as filed with the U.S. Securities and Exchange Commission (the “SEC”)
on March 18, 2021, 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:

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.

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 Delaware corporation (“BRT”), and
its wholly owned subsidiary, Stem Pearls, LLC, a Delaware 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 Stem Pearls. We also own an allowed trademark application for BRTX. The Dragonfly Logo is also registered
with the U.S. Copyright Office. This report also includes 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

BioRestorative
Therapies, Inc. has one wholly-owned subsidiary, Stem Pearls. BioRestorative Therapies, Inc. and its subsidiary are referred to
collectively as “BRT” or the “Company”.

On
March 20, 2020 (the “Petition Date”), the Company filed a voluntary petition commencing a case (the “Chapter
11 Case”) under Chapter 11 of title 11 of the U.S. Code in the United States Bankruptcy Court for the Eastern District of
New York (the “Bankruptcy Court”).

On
August 7, 2020 the Company and Auctus Fund, LLC (“Auctus”), the Company’s largest unsecured creditor and a stockholder
as of the Petition Date, filed an Amended Joint Plan of Reorganization (the “Plan”) and on October 30, 2020, the Bankruptcy
Court entered an order (the “Confirmation Order”) confirming the Plan, as amended. Amendments to the Plan are reflected
in the Confirmation Order. On November 16, 2020 (the “Effective Date”), the Plan became effective. See Note 10 –
Subsequent Events in Party I, Item I of this report for additional information.

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 and lead cell therapy candidate
being called BRTX-100. We submitted an IND application to the FDA to obtain authorization 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 received such authorization from the FDA. We intend to commence such clinical trial during the third quarter of 2021 (assuming
the receipt of necessary funding). We have obtained a 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 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, and March 2020; a
notice of allowance was issued in November 2020 for a United States patent application in the ThermoStem Program and is
expected to issue in 2021; Australian patents related to the ThermoStem Program were issued in April 2017 and October 2019;
a Japanese patent related to the ThermoStem Program was issued in December 2017; Israeli patents related to the ThermoStem
Program were issued in October 2019 and May 2020; and European patents related to the ThermoStem Program were issued
in April 2020 and January 2021.

We
have licensed 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 contemplated Phase 2 clinical
trial with regard to BRTX-100.

Revenue

The
Company derives all of its revenue pursuant to a license agreement between the Company and a stem cell treatment company (“SCTC”)
entered into in January 2012, as amended in November 2015. Pursuant to the license agreement, the SCTC granted to the Company
a license to use certain intellectual property related to, among other things, stem cell disc procedures and the Company has 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 sublicenses, the SCTC has
agreed to pay the Company royalties on a per disc procedure basis.

Results
of Operations

Comparison
of the Three Months Ended March 31, 2020 to the Three Months Ended March 31, 2019

Our
financial results for the three months ended March 31, 2020 are summarized as follows in comparison to the three months ended
March 31, 2019:

Revenues

For
the three months ended March 31, 2020 and 2019, we generated $26,000 and $29,000, respectively, of royalty revenue in connection
with our sublicense agreement.

Marketing
and Promotion

Marketing
and promotion expenses include advertising and promotion, marketing and seminars, meals, entertainment and travel expenses. For
the three months ended March 31, 2020, marketing and promotion expenses increased by $6,171, or 39{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, from $15,837 to $22,008 as
compared to the three months ended March 31, 2019.

We
expect that marketing and promotion expenses will increase in the future as we increase our marketing activities following full
commercialization of our products and services.

Consulting

Consulting
expenses consist of consulting fees and stock-based compensation to consultants. For the three months ended March 31, 2020, consulting
expenses decreased by $565,722, or 94{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, from $599,734 to $34,012, as compared to the three months ended March 31, 2019. The decrease
is primarily due to the Company eliminating the use of consultants as a result of reduced spending as the Company prepared to
enter Chapter 11.

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. Research
and development expenses are expensed as they are incurred. For the three months ended March 31, 2020, research and development
expenses decreased by $268,678, or 59{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, from $455,006 to $186,328, as compared to the three months ended March 31, 2019. The decrease
is primarily due to the Company eliminating costs as a result of reduced spending as the Company prepared to enter Chapter 11.

We
expect that our research and development expenses will increase with the recommencement of our research and development initiatives
during the year ending December 31, 2021, following our emergence from Chapter 11.

General
and administrative

General
and administrative expenses consist primarily of salaries, bonuses, payroll taxes, severance costs and stock-based compensation
to employees (excluding any cash or non-cash compensation of our Vice President of Research and Development and our laboratory
staff), as well as corporate expenses such as legal and professional fees, investor relations and occupancy related expenses.
For the three months ended March 31, 2020, general and administrative expenses decreased by $684,118, or 53{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, from $1,286,759
to $602,641, as compared to the three months ended March 31, 2019. The decrease is primarily due to the Company eliminating certain
costs as a result of reduced spending as the Company prepared to enter Chapter 11.

We
expect that our general and administrative expenses will increase as we expand our staff, develop our infrastructure and incur
additional costs to support the growth of our business during the year ending December 31, 2021, following our emergence from
Chapter 11.

Interest
expense

For the three months ended
March 31, 2020, interest expense increased $2,549,092, or 804{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, as compared to the three months ended March 31,
2019. The increase was due to the Company fully amortizing the remaining debt discount at March 31, 2020, of $2,583,1078
as compared to the three months ended March 31, 2019.

Amortization
of debt discount

For
the three months ended March 31, 2020, amortization of debt discount increased $323,384, or 44{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, as compared to the three months
ended March 31, 2019. The increase was primarily due to increased exchanges of convertible notes and the timing of the recognition
of expense related to the bifurcated embedded conversion options of convertible notes.

Loss
on extinguishment of notes payable, net

For
the three months ended March 31, 2020, we recorded a loss on extinguishment of notes payable, net of $658,152, as compared to a loss
on extinguishment of notes payable, net of $448,486 for the three months ended March 31, 2019. The increase is associated with debtholders’
exchanges of debt into equity securities.

Change
in fair value of derivative liabilities

For
the three months ended March 31, 2020, we recorded a loss related to the change in fair value of derivative liabilities of $2,141,069
due to the increase in time value of embedded conversion options within certain convertible notes payable, as compared to a loss
related to the change in fair value of derivative liabilities of $46,264 for the three months ended March 31, 2019.

Liquidity
and Capital Resources

Liquidity

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

Availability
of Additional Funds

Based
upon our working capital deficiency and stockholders’ deficit of $18,363,075 and $17,536,105, respectively,
as of March 31, 2020, as of such date, we required additional equity and/or debt financing to continue our operations.

As
of March 31, 2020, our outstanding debt of $8,021,695, together with interest at rates ranging between 12{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per annum,
was due on various dates through December 18, 2020.

Our
operating needs include the planned costs to operate our business, including amounts required to fund 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. We have granted a security
interest in all of our assets to certain lenders, including Auctus, in connection with our Chapter 11 plan of reorganization.
This may impede our ability to raise additional debt financing. In addition, 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.

Our
unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared
in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation
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 unaudited condensed consolidated financial statements do not include any adjustment
that might result from the outcome of this uncertainty.

The
following has been able to mitigate the above factors with regards to our ability to continue as a going concern: (i) as part
of our Chapter 11 reorganization approximately $14,700,000 in outstanding debt and other liabilities were exchanged for (a) shares
of common stock, (b) new convertible notes or (c) new convertible notes and warrants to purchase shares of common stock; (ii)
we secured DIP financing during our Chapter 11 reorganization in the aggregate amount of $1,189,413, and $3,848,548 in debt financing
as part of our Chapter 11 reorganization to sustain operations; and (iii) pursuant to the plan of reorganization, Auctus is required
to loan to us, as needed and subject to our becoming current in our SEC reporting obligations, an additional amount equal to $3,500,000,
less the amount of Auctus’ DIP financing ($1,226,901, inclusive of accrued interest) and its DIP costs. As a result of the
above, we have sufficient cash to fund operations for the twelve months subsequent to the filing date. In addition, the Company
will need to obtain further funding of at least $12,000,000 to commence and complete a Phase 2 clinical study of the use of BRTX-100.

Cash
Flows

During
the three months ended March 31, 2020 and 2019, our sources and uses of cash were as follows:

Operating
Activities

Net cash used in operating
activities was $448,646 for the three months ended March 31, 2020, primarily due to the net loss of $7,550,772 which
was partially offset by non-cash expenses of $6,950,957 related to amortization of debt discount, accretion
of interest expense, stock-based compensation, change in fair value of derivative liabilities, and loss on extinguishment of notes
payable and $151,169 of cash provided by changes in the levels of operating assets and liabilities, primarily as a
result of decreases in accounts payable and increases in prepaid expenses and other current assets, partially offset by an increase
in accrued interest, expenses and other current liabilities. Net cash used by operating activities was $1,980,162 for the
three months ended March 31, 2019, primarily due to net loss of $3,883,172, which was partially offset by non-cash expenses of
$1,990,038 related to stock-based compensation and $87,028 of cash used by changes in the levels of operating assets and liabilities,
primarily as a result of decreases in accounts payable and increases in prepaid expenses and other current assets, partially offset
by an increase in accrued interest, expenses and other current liabilities.

Financing
Activities

Net
cash provided by financing activities for the three months ended March 31, 2020 was $451,762, which was primarily due to $441,762
of net proceeds from debt financings and $10,000 of net proceeds from an equity financing. Net cash provided by financing activities
for the three months ended March 31, 2019 was $2,358,918, which was due to $3,073,918 of net proceeds from debt financings and
$600,000 of net proceeds from equity financing, partially offset by payments on notes payable of $1,315,000.

We
anticipate that the costs to commence and complete our Phase 2 clinical trials with regard to our Disc/Spine Program will be at
least $12,000,000. In addition, we anticipate approximately $45,000,000 in additional funding will be needed to complete the clinical
trials using BRTX-100 (assuming the receipt of no revenues). As noted above in “Availability of Additional Funds”
we secured additional funding as part of Chapter 11 reorganization in the aggregate amount of $5,037,961 as well as approximately
$14,700,000 in outstanding debt and other liabilities being exchanged for (a) shares of common stock, (b) new convertible notes
or (c) new convertible notes and warrants to purchase shares of common stock. Additionally, pursuant to the plan of reorganization,
Auctus is required to loan to us, as needed and subject to our becoming current in our SEC reporting obligations, an additional
amount equal to $3,500,000, less the amount of Auctus’ DIP financing ($1,226,901, inclusive of accrued interest) and its
DIP costs. As a result of the above, we have sufficient cash to fund operations for the twelve months subsequent to the filing
date.

Effects
of Inflation

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

Significant
Accounting Policies and Estimates

Our
significant accounting policies are more fully described in the notes to our unaudited condensed consolidated financial statements
included herein for the quarter ended March 31, 2020 and in the notes to our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on March 18, 2021.

Fair
Value Measurement

The
fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that market participants would use in the valuation of
an asset or liability. It establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value
hierarchy under the fair value measurement guidance are described below:

Level
1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level
2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially
the full term of the asset or liability; or

Level
3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable
(supported by little or no market activity).

Use
of Estimates

The
preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities
at dates of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during
the periods. Our significant estimates and assumptions include the recoverability and useful lives of long-lived assets, the fair
value of our common stock, stock-based compensation, warrants issued in connection with notes payable, derivative liabilities
and the valuation allowance related to our deferred tax assets. Certain of our estimates, including the carrying amount of the
intangible assets, could be affected by external conditions, including those unique to us and general economic conditions. It
is reasonably possible that these external factors could have an effect on our estimates and could cause actual results to differ
from those estimates.

Intangible
Assets

Intangible
assets are comprised of trademarks and licenses with original estimated useful lives of 10 and 17.7 years, respectively. Once
placed into service, we amortize the cost of the intangible assets over their estimated useful lives on a straight-line basis.

Impairment
of Long-lived Assets

We
review for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from
the use of the asset and its eventual disposition are less than its carrying amount. While our near term liquidity is tight, historically
we have been successful in raising capital as needed (although there can be no assurance that we will continue to be successful
in raising capital as needed). We continue to progress our scientific agenda and meet related milestones. We have not identified
any impairment losses.

Income
Taxes

We
recognize deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded
in our unaudited condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined
on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts,
or temporary differences, at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

We
adopted the provisions of Accounting Standards Codification (“ASC”) Topic 740-10, which prescribes a recognition threshold
and measurement process for unaudited condensed consolidated financial statements recognition and measurement of a tax position
taken or expected to be taken in a tax return.

Stock-Based
Compensation

We
measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For
employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the
award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The
fair value amount is then recognized over the period during which services are required to be provided in exchange for the award,
usually the vesting period. Since the shares underlying our Equity Participation Plan were registered on May 27, 2014, we estimate
the fair value of the awards granted under the Plan based on the market value of our freely tradable common stock as reported
on the OTC. The fair value of our restricted equity instruments was estimated by management based on observations of the cash
sales prices of both restricted shares and freely tradable shares. Awards granted to directors are treated on the same basis as
awards granted to employees.

Derivative
Financial Instruments

We
evaluate our convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative
financial instruments to be separately accounted for in accordance with Topic 815 of the Financial Accounting Standards Board
ASC. The accounting treatment of derivative financial instruments requires that we record embedded conversion options (“ECOs”)
and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of
each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each
reporting period at each balance sheet date. Conversion options are recorded as a discount to the host instrument and are amortized
as amortization of debt discount on the unaudited condensed consolidated financial statements over the life of the underlying
instrument. We reassess the classification of our derivative instruments at each balance sheet date. If the classification changes
as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

The
Multinomial Lattice Model and Black-Scholes Model were used to estimate the fair value of the ECOs of convertible notes payable,
the warrants, and stock options that are classified as derivative liabilities on the consolidated balance sheets. The models include
subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on
the actual volatility during the most recent historical period of time equal to the weighted average life of the instruments.

New
and Recently Adopted Accounting Pronouncements

Any
new and recently adopted accounting pronouncements are more fully described in Note 2 to our unaudited condensed consolidated
financial statements herein for the quarter ended March 31, 2020.

Off-Balance
Sheet Arrangements

We
have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to stockholders.

Not
Applicable. As a smaller reporting company, we are not required to provide the information required by this Item.

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, who is also our 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 March 31, 2020. Management has not completed such evaluation and, as such, 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 recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including
our principal executive officer, who is also our principal financial officer, as appropriate to allow timely decisions regarding
required disclosures. As a result of the material weakness in internal controls over financial reporting described below, we concluded
that our disclosure controls and procedures as of March 31, 2020 were not effective.

Management’s
Annual Report on Internal Control Over Financial Reporting

Management
and the Company’s consolidated subsidiaries are responsible for establishing and maintaining adequate internal control over
financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision
of its principal executive and principal financial officer and effected by the Company’s Board of Directors, management
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its
unaudited condensed consolidated financial statements for external reporting purposes in accordance with GAAP.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Material
Weaknesses in Internal Control over Financial Reporting

Management
assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2020 based on the
framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Based on this assessment, management has determined that the Company’s internal control over
financial reporting as of March 31, 2020 was not effective.

A
material weakness, as defined in the standards established by the 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 unaudited condensed consolidated financial statements will not be prevented or detected on a timely basis.

The
ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses:

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 first
quarter of 2020 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial
reporting.

We
are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or
results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our
subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse
effect.

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, 2019, as filed with
the SEC on March 18, 2021, in addition to other information contained in those reports and in this quarterly report in evaluating
the Company and its business before purchasing shares of our common stock. The Company’s business, operating results and
financial condition could be adversely affected due to any of those risks.

During
the three months ended March 31, 2020, we issued the following securities in transactions not involving any public offering. For
each of the following transactions, we relied upon Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”) as transactions by an issuer not involving any public offering or Section 3(a)(9) of the Securities Act as a security
exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given
directly or indirectly for soliciting such exchange. For each such transaction, we did not use general solicitation or advertising
to market the securities, the securities were offered to a limited number of persons, the investors had access to information
regarding us (including information contained in our Annual Report on Form 10-K for the year ended December 31, 2018, our Quarterly
Report on Form 10-Q for the period ended September 30, 2019, Current Reports on Form 8-K filed with the Securities and Exchange
Commission, and press releases made by us), and we were available to answer questions by prospective investors. We reasonably
believe that each of the investors is an accredited investor. The proceeds were used to reduce our working capital deficiency
and for other corporate purposes.