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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2024

 

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from _________ to _________

 

Commission file number: 001-37603

 

BIORESTORATIVE THERAPIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   30-1341024

(State or other Jurisdiction of

Incorporation or Organization)

  

(I.R.S. Employer

Identification No.)

 

40 Marcus Drive, Melville, New York   11747
(Address of Principal Executive Offices)   (Zip Code)

 

(631) 760-8100

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbol(s)   Name of exchange on which registered
Common Stock, $0.0001 par value   BRTX   Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
       
Non-accelerated filer ☒ Smaller reporting company ☒
       
    Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Indicate by checkmark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

 

As of August 12, 2024 there were 6,919,919 shares of the registrant’s Common Stock outstanding.

 

 

 

 
 

 

BIORESTORATIVE THERAPIES, INC.

 

FORM 10-Q

 

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

 

TABLE OF CONTENTS

 

    Page
     
PART I. FINANCIAL INFORMATION 3
     
ITEM 1. Financial Statements 3
     
  Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023 3
     
  Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 4
     
  Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023 5
     
  Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 6
     
  Notes to Unaudited Condensed Consolidated Financial Statements 7
     
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
     
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 26
     
ITEM 4. Controls and Procedures 26
     
PART II. OTHER INFORMATION 29
     
ITEM 1A. Risk Factors 29
     
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 29
     
ITEM 6. Exhibits 29
     
SIGNATURES 30

 

2
 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30,   December 31, 
   2024   2023 
   (unaudited)   (As Restated) 
Assets          
Current Assets:          
Cash and cash equivalents  $2,252,247   $884,377 
Investments held in marketable securities   12,428,218    10,181,618 
Accounts receivable   27,400    19,300 
Prepaid expenses and other current assets   295,861    305,231 
Total Current Assets   15,003,726    11,390,526 
Property and equipment, net   345,807    356,055 
Right-of-use assets   78,146    151,447 
Intangible assets, net   668,818    713,692 
Deferred offering costs   22,381    - 
Total Assets  $16,118,878   $12,611,720 
           
Liabilities and Stockholders’ Equity          
           
Current Liabilities:          
Accounts payable  $215,920   $189,389 
Accrued expenses and other current liabilities   447,622    711,686 
Deferred revenue   80,700    - 
Lease liability   83,580    162,317 
Derivative liabilities   4,491,969    1,543,953 
Total Current Liabilities   5,319,791    2,607,345 
Total Liabilities   5,319,791    2,607,345 
           
Commitments and contingencies   -    - 
           
Stockholders’ Equity:          
Preferred stock, $0.01 par value; 20,000,000 shares authorized; Series B Convertible Preferred Stock; 1,543,158 shares designated, 1,398,158 shares issued and outstanding at June 30, 2024 and December 31, 2023   13,982    13,982 
Common stock, $0.0001 par value; 75,000,000 shares authorized; 6,919,919 and 4,706,917 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively   692    471 
Additional paid-in capital   163,735,564    156,689,256 
Accumulated deficit   (152,951,151)   (146,699,334)
Total Stockholders’ Equity   10,799,087    10,004,375 
Total Liabilities and Stockholders’ Equity  $16,118,878   $12,611,720 

 

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

 

3
 

 

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

   2024   2023   2024   2023 
   For the Three Months Ended   For the Six Months Ended 
   June 30   June 30 
   2024   2023   2024   2023 
       (As Restated)       (As Restated) 
                 
Revenues  $89,100   $64,500   $124,100   $95,800 
Cost of goods sold   6,490    -    6,490    - 
Gross profit   82,610    64,500    117,610    95,800 
                     
Operating Expenses:                    
Research and development   1,292,182    902,891    2,350,313    2,134,636 
General and administrative   1,259,235    2,278,160    4,345,356    6,856,813 
Total Operating Expenses   2,551,417    3,181,051    6,695,669    8,991,449 
Loss From Operations   (2,468,807)   (3,116,551)   (6,578,059)   (8,895,649)
                     
Other (Income) Expense:                    
Interest income   (175,945)   (96,187)   (338,542)   (114,403)
Other income   (911)   (39,812)   (149,932)   (116,472)
Gain on exchange of warrants   -    -    (1,711,698)   - 
Change in fair value of derivative liabilities   1,736,611    2,728,847    1,873,930    4,217,197 
Total Other Expense (Income)   1,559,755    2,592,848    (326,242)   3,986,322 
Net Loss  $(4,028,562)  $(5,709,399)  $(6,251,817)  $(12,881,971)
                     
Net Loss Per Share - Basic and Diluted  $(0.50)  $(1.47)  $(0.84)  $(3.39)
                    
Weighted Average Common Shares Outstanding - Basic and Diluted   8,121,499    3,886,309    7,400,446    3,803,323 

 

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

 

4
 

 

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
   For the Six Months Ended June 30, 2024 
   Series B Convertible           Additional         
   Preferred Stock   Common Stock   Paid-In   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
                             
Balance - January 1, 2024 (as restated)   1,398,158   $13,982    4,706,917   $471   $156,689,256   $(146,699,334)  $10,004,375 
                                    
Common stock issued in connection with warrant exchange [1]   -    -    2,000,000    200    4,742,043    -    4,742,243 
                                    
Return and cancellation of shares in lieu of payroll tax withholding   -    -    (34,825)   (4)   (48,406)   -    (48,410)
                                    
Stock-based compensation:                                   
                                    
Restricted share units   -    -    97,827    10    985,028    -    985,038 
                                    
Options   -    -    -    -    1,043,336    -    1,043,336 
                                    
Net loss   -    -    -    -    -    (2,223,255)   (2,223,255)
                                    
Balance - March 31, 2024   1,398,158    13,982    6,769,919    677    163,411,257    (148,922,589)   14,503,327 
                                    
Common stock issued in connection with abeyance shares   -    -    150,000    15    (15)   -    - 
                                    
Stock-based compensation:                                   
                                    
Options   -    -    -    -    324,322    -    324,322 
                                    
Net loss   -    -    -    -    -    (4,028,562)   (4,028,562)
                                    
Balance - June 30, 2024   1,398,158   $13,982    6,919,919   $692   $163,735,564   $(152,951,151)  $10,799,087 

 

   For the Six Months Ended June 30, 2023 
   Series B Convertible           Additional         
   Preferred Stock   Common Stock   Paid-In   Accumulated     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
                   (As Restated)   (As Restated)   (As Restated) 
                             
Balance - January 1, 2023 (as restated)   1,518,158   $15,182    3,677,775   $369   $146,556,418   $(136,281,630)  $10,290,339 
                                    
Return and cancellation of shares in lieu of payroll tax withholding   -    -    (10,058)   (1)             (39,307)                        -              (39,308)
                                    
Stock-based compensation:                                   
                                    
Restricted share units   -    -    99,898    10    1,188,060    -    1,188,070 
                                    
Options   -    -    -    -    2,190,428    -    2,190,428 
                                    
Net loss (as restated)   -    -    -    -    -    (7,172,572)   (7,172,572)
                                    
Balance - March 31, 2023 (as restated)   1,518,158   $15,182    3,767,615   $378   $149,895,599   $(143,454,202)  $6,456,957 
                                    
Stock-based compensation:                                   
                                    
Restricted share units   -    -    1,442    -    1,164,134    -    1,164,134 
                                    
Options   -    -    -    -    321,534    -    321,534 
                                    
Issuance of common stock   -    -    93,551    9    411,701    -    411,710 
                                    
Conversion of Series B preferred to common stock   (120,000)   (1,200)   120,000    12    1,188    -    - 
                                    
Net loss (as restated)   -    -    -    -    -    (5,709,399)   (5,709,399)
                                    
Balance - June 30, 2023 (as restated)   1,398,158   $13,982    3,982,608   $399   $151,794,156   $(149,163,601)  $2,644,936 

 

[1]Represents the aggregate fair value of 3,351,580 shares of common stock, which includes 2,150,000 that have been issued and 1,201,580 shares held in abeyance. See Note 4 - Stockholders’ Equity - Warrant Exercise and Issuance and Note 6 - Fair Value Measurement for additional details.

 

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

 

5
 

 

BIORESTORATIVE THERAPIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

   2024   2023 
   For the Six Months Ended 
   June 30, 
   2024   2023 
       (As Restated) 
         
Cash Flows From Operating Activities:          
Net loss  $(6,251,817)  $(12,881,971)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   90,418    80,877 
Dividend and interest income   (327,065)   (206,158)
Stock-based compensation   2,352,696    4,864,166 
Non-cash lease expense   73,301    58,022 
Gain on exchange of warrants   (1,711,698)   - 
Change in fair value of derivative liabilities   1,873,930    4,217,197 
Changes in operating assets and liabilities:          
Accounts receivable   (8,100)   (9,000)
Prepaid expenses and other current assets   (39,040)   (79,778)
Accounts payable   26,531    105,146 
Accrued expenses and other current liabilities   (264,064)   256,253 
Deferred revenue   80,700    - 
Lease liability   (78,737)   (67,585)
Net Cash Used In Operating Activities   (4,182,945)   (3,662,831)
           
Cash Flows From Investing Activities:          
Sale of marketable securities   10,865,000    10,982,932 
Purchase of marketable securities   (12,784,535)   (7,535,662)
Purchases of equipment   (35,296)   (89,071)
Net Cash (Used In) Provided By Investing Activities   (1,954,831)   3,358,199 
           
Cash Flows From Financing Activities:          
Net proceeds from issuance of common stock in at-the-market offering   -    411,701 
Proceeds from exchange and issuance of warrants, net [1]   7,528,027    - 
Deferred offering costs   (22,381)   - 
Net Cash Provided By Financing Activities   7,505,646    411,701 
           
Net Increase In Cash and Cash Equivalents   1,367,870    107,069 
           
Cash and Cash Equivalents - Beginning of the Period   884,377    1,676,577 
           
Cash and Cash Equivalents - End of the Period  $2,252,247   $1,783,646 
           
Supplemental Disclosures of Cash Flow Information:          
Cash paid during the period for:          
Interest  $-   $- 
Income taxes  $-  $- 
           
Non-cash investing and financing activities:          
Issuance of common stock held in abeyance  $15   $- 
Return and cancellation of shares in lieu of payroll tax withholding  $48,410   $39,308 

 

[1]Includes gross proceeds of $8,123,391, less issuance costs of $595,364.

 

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

 

6
 

 

BIORESTORATIVE THERAPIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY

 

Corporate History

 

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

 

On December 23, 2022, the Company reincorporated from Delaware to Nevada by filing Articles of Incorporation with the state of Nevada. The reincorporation was structured as a statutory merger.

 

Business Operations

 

BRT develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells. BRT’s website is at www.biorestorative.com. The information contained in the website or connected thereto is not intended to be incorporated by reference into this Quarterly Report. BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”. Its lead cell therapy candidate, BRTX-100, is a product formulated from autologous (or a person’s own) cultured mesenchymal stem cells collected from the patient’s bone marrow. The product is intended to be used for the non-surgical treatment of painful lumbosacral disc disorders or as a complimentary therapeutic to a surgical procedure. BRT is also engaging in research efforts with respect to a platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other metabolic disorders and has labeled this initiative its ThermoStem Program. In addition, in continuation of BRT’s mission of developing and commercializing cell-based biologics, it is seeking to develop a biologics-based cosmetic products business. Pursuant to such business, BRT would formulate, manufacture and sell products designed for cosmetic and aesthetic uses. Further, BRT has licensed a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or material to the spine and discs or other potential sites.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. The December 31, 2023 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by U.S. GAAP. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) that are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2024 and for the three and six months then ended. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on June 11, 2024 as part of the Company’s Amendment No. 1 to the Annual Report on Form 10-K/A (the “Form 10-K/A”), which includes the restatement of the Company’s consolidated financial statements, including periods that are included in this Quarterly Report on Form 10-Q. Refer to Note 2 - Summary of Significant Accounting Policies - Restatement of Previously Issued Consolidated Financial Statements and Note 3 - Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements in the Form 10-K/A for additional information.

 

7
 

 

Liquidity

 

For the six months ended June 30, 2024, the Company had a net loss of $6.3 million, negative cash flows from operations of $4.2 million and working capital of $9.7 million. The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur net losses and negative cash flows from operations as it executes its development plans for 2024 and beyond, as well as other potential strategic and business development initiatives. The Company has previously funded, and plans to continue funding, these losses primarily through current cash on hand, investments in marketable securities and additional infusions of cash from equity and debt financing. During the six months ended June 30, 2024, the Company raised net proceeds of approximately $7.5 million in connection with a warrant exercise program which is further discussed in Note 4 – Stockholders’ Equity.

 

Based on cash on hand and investments as of the date these unaudited condensed consolidated financial statements were issued, which includes $7.5 million of net proceeds from the warrant exercise program, the Company believes it has sufficient cash to fund operations for at least 12 months after the issuance date of these unaudited condensed consolidated financial statements.

 

However, the Company’s current funds will not be sufficient to enable the Company to fully complete its development activities or attain profitable operations. If the Company is unable to obtain such needed additional financing on a timely basis, the Company may have to curtail its development, marketing and promotional activities, which would have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

See Amendment No. 1 to the Annual Report on Form 10-K/A for the year ended December 31, 2023, for a complete listing of the Company’s significant accounting policies.

 

Reclassifications

 

Certain prior period statements of operations, changes in stockholders’ equity and cash flows amounts have been reclassified to conform to the Company’s fiscal 2024 presentation. These reclassifications have no impact on the Company’s previously reported net loss.

 

8
 

 

Cash and Cash Equivalents

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution. The Company maintains deposits in its accounts that hold cash and cash equivalents in excess of the Federal Depository Insurance Corporation (“FDIC”) coverage of $250,000 per banking institution. The Company had deposits in excess of FDIC coverage of $1,964,341 and $604,226 as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, the Company has not experienced losses on this account.

 

Customer and Revenue Concentrations

 

All of the Company’s contract service revenue is derived from one customer. Additionally, all of the Company’s product sales revenue is derived from one customer.

 

Accounts Receivable

 

Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of June 30, 2024 and 2023, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted.

 

Deferred Revenue

 

As of June 30, 2024 and December 31, 2023, the Company had $80,700 and $0 of deferred revenue, respectively, from contracts with customers. The contract liabilities included in deferred revenue represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract. The Company expects to satisfy the remaining performance obligations and recognize the revenue related to its deferred revenue balance within the next twelve months. During the six months ended June 30, 2024, no revenues were recognized for performance obligations satisfied in previous periods.

 

Derivative Financial Instruments

 

The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

 

Fair Value of Financial Instruments

 

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:

 

Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

 

9
 

 

Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

 

Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

  

The Company considers cash and cash equivalents, investments held in marketable securities, accounts receivable, accounts payable and derivative liabilities to meet the definition of financial instruments. As of June 30, 2024 and December 31, 2023, the carrying amount of cash and cash equivalents, investments held in marketable securities, accounts receivable, and accounts payable approximate their fair value due to the relatively short period of time between their origination and their expected realization or payment. The warrants classified as derivative liabilities are measured at fair value (see Note 6 – Fair Value Measurement for additional details).

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company recognizes revenue primarily from the following different types of contracts:

 

  ● Product sales - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation.

 

  ● Royalty revenue - Revenue is recognized as a usage-based royalty from customers’ usage of intellectual property pursuant to a license agreement at the point in time in which the underlying sale occurs.

 

The Company recognizes bill-and-hold revenue from its sale of cosmetic vials warehoused at a Company location for a specified period of time in accordance with directions received from the Company’s customer. Even though the vials are held at a Company location, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill-and-hold arrangement when: (i) customer acceptance specifications have been met, (ii) legal title has transferred, (iii) the customer has a present obligation to pay for the product and (iv) the risks and rewards of ownership have transferred to the customer. Additionally, all the following bill-and-hold criteria have to be met in order for control to be transferred to the customer:

 

●the reason for the bill-and-hold arrangement is substantive
●the customer has requested the product be warehoused
●the product has been identified as separately belonging to the customer
●the product is currently ready for physical transfer to the customer
●the Company does not have the ability to use the product or direct it to another customer.

 

10
 

 

The following table summarizes the Company’s revenue recognized in its unaudited condensed consolidated statements of operations:

 

   2024   2023   2024   2023 
   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Product revenue  $69,300   $-   $69,300   $- 
Royalty revenue   19,800    64,500    54,800    95,800 
Revenues  $89,100   $64,500   $124,100   $95,800 

 

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 outstanding options and warrants are considered potential common stock. The Company has 1,201,580 shares held in abeyance included in basic loss per share given that they are issuable for no additional consideration (see Note 4 – Stockholders’ Equity for additional details). The dilutive effect, if any, of stock options and warrants are calculated using the treasury stock method. All outstanding convertible preferred stock is considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, options, warrants, restricted stock units (“RSUs”) and convertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three and six months ended June 30, 2024 and 2023.

 

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 or conversion price could be less than the average market price of the common shares:

 

   For the Three and Six Months Ended 
   June 30, 
   2024   2023 
Stock options   3,401,608    1,466,890 
Warrants   3,952,511    4,791,072 
Unvested RSUs   -    97,827 
Convertible Preferred Stock   1,398,158    1,398,158 
    8,752,277    7,753,947 

 

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segments Disclosures (Topic 280), which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant (“ASU 2023-07”) segment expenses on both an annual and interim basis. The guidance becomes effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

 

11
 

 

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

 

NOTE 3 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

Accrued expenses and other current liabilities consist of:

  

   June 30,   December 31, 
   2024   2023 
Accrued bonuses  $389,500   $638,000 
Accrued general and administrative expenses   58,122    73,686 
Total accrued expenses and other current liabilities  $447,622   $711,686 

 

NOTE 4 - STOCKHOLDERS’ EQUITY

  

Warrant Exercise and Issuance

 

On February 6, 2024, the Company entered into agreements with certain holders of its existing warrants exercisable for an aggregate of 3,351,580 shares of its Common Stock (collectively, the “Existing Warrants”), to exercise their warrants at a reduced exercise price of $2.33 per share, in exchange for the issuance of new warrants (the “New Warrants”) as described below (the “Warrant Exercise and Issuance”). The aggregate gross proceeds from the exercise of the Existing Warrants and the payment of the New Warrants, as described below, was approximately $8.1 million, before deducting cash issuance costs in the amount of $595,364. The reduction of the exercise price of the Existing Warrants and the issuance of the New Warrants was structured as an at-market transaction under Nasdaq rules. Of the 3,351,580 shares of Common Stock issuable upon the exercise of the Existing Warrants, through June 30, 2024, the Company had issued an aggregate of 2,150,000 shares of Common Stock. The remaining 1,201,580 shares of Common Stock, which are issuable to Auctus Fund, LLC (“Auctus”), are being held in abeyance due to Auctus’ maximum beneficial ownership limitation (the “Abeyance Shares”). Such Abeyance Shares have been fully paid for and are issuable upon notice from Auctus to the Company.

 

In consideration for the immediate exercise of the Existing Warrants for cash and the payment of $0.125 per share underlying the New Warrants, the exercising holders received the New Warrants to purchase shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The New Warrants will be exercisable for a period of five years into an aggregate of 2,513,686 shares of Common Stock at an exercise price of $2.43 per share. The securities offered in the private placement have not been registered under the Securities Act or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company agreed to file a resale registration statement with the SEC to register the resale of the shares of Common Stock underlying the New Warrants issued in the private placement. Such resale registration statement was filed and was declared effective by the SEC on April 18, 2024.

 

12
 

 

In connection with the transaction described above, the Company entered into a financial advisory services agreement, dated February 5, 2024, with Roth Capital Partners, LLC (“Roth”), pursuant to which the Company has paid Roth a cash fee of approximately $528,000 for its services, in addition to reimbursement for certain expense. During the six months ended June 30, 2024, the Company incurred an aggregate of $595,364 of cash issuance costs related to the Warrant Exercise and Issuance.

 

Prior to the Warrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities. Additionally, the Company analyzed the form of the New Warrants and determined that they should be classified as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Under the New Warrants, the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the New Warrants and not result in a change of control of the Company. As a result, such New Warrants do not meet the criteria for equity treatment. Additionally, certain New Warrants contain adjustments to the settlement amount based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40 and, accordingly, such New Warrants are not considered indexed to the Company’s own stock and are not eligible for an exception from derivative accounting. See Note 6 – Fair Value Measurement for details regarding the valuation of the Existing Warrants and New Warrants.

 

The Company determined the Warrant Exercise and Issuance to be an exchange by investors of Existing Warrants with an aggregate fair value of $1,115,334 along with aggregate cash consideration of $8,123,392 (consisting of $7,809,181 paid to exercise the Existing Warrants and $314,211 paid for the New Warrants) for an aggregate of 3,351,580 shares of common stock with an aggregate fair value of $4,742,244, New Warrants with an aggregate fair value of $2,189,420 and aggregate cash issuance costs of $595,364 and, accordingly, the Company recorded a gain on extinguishment of $1,711,698 during the six months ended June 30, 2024.

 

Warrants

 

See Note 6 – Fair Value of Financial Instruments for details regarding the valuation of the New Warrants.

 

A summary of the Company’s warrant activity and related information follows:

  

           Weighted 
       Weighted   Average 
       Average   Remaining 
   Number of   Exercise   Life 
   Warrants   Price   In Years 
Outstanding, January 1, 2024   4,791,019   $10.57      
Granted   2,513,686    2.43      
Exercised   (3,351,580)   2.33      
Expired   (614)   3,136.85      
Outstanding, June 30, 2024   3,952,511   $3.85    3.8 
                
Exercisable, June 30, 2024   3,952,511   $3.85    3.8 

 

13
 

 

As of June 30, 2024, the warrants exercisable and outstanding had an intrinsic value of $0.

 

Stock Options

 

On February 13, 2024, the Company granted options to purchase an aggregate 1,934,716 shares of the Company’s Common Stock at an exercise price of $1.45 per share to employees, the Company’s board of directors and a member of the Company’s Scientific Advisory Board. The options had an aggregate grant date fair value of $2,140,000 and vest as follows: (i) options to purchase an aggregate 513,663 shares of common stock vest monthly over one year, and (ii) options to purchase an aggregate of 1,421,053 shares of common stock vest to the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The Company will recognize the grant date fair value of the options proportionate to the vesting period.

 

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

  

   For the Six Months Ended 
   June 30, 
   2024   2023 
Risk free interest rate   4.14 - 4.30%    4.22%
Expected term (years)   2.77 - 5.27    3.5 
Expected volatility   101 - 102%    175%
Expected dividends   0.00%   0.00%

 

Options granted during the six months ended June 30, 2024 and 2023 had a weighted average grant date fair value per share of $1.11 and $2.77 per share, respectively. There were no stock options granted during the three months ended June 30, 2024 and 2023.

 

A summary of the stock option activity during the six months ended June 30, 2024 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining     
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
Outstanding, January 1, 2024   1,466,892   $4.11                    
Granted   1,934,716    1.45           
Exercised   -    -           
Forfeited   -    -           
Outstanding, June 30, 2024   3,401,608   $2.60    8.0   $- 
                     
Exercisable, June 30, 2024   2,189,947   $3.12    7.6   $- 

 

Restricted Stock Units (“RSUs”)

 

Pursuant to the Company’s 2021 Stock Incentive Plan (the “2021 Plan”), the Company may grant RSUs to employees, consultants or non-employee directors (“Eligible Individuals”). The number, terms and conditions of the RSUs that are granted to Eligible Individuals are determined on an individual basis by the 2021 Plan administrator. On the distribution date, the Company shall issue to the Eligible Individual one unrestricted, fully transferable share of the Company’s common stock (or the fair market value of one such share in cash) for each vested and nonforfeitable RSU.

 

14
 

 

A summary of the Company’s unvested RSUs as of June 30, 2024 is as follows:

 

   Number of Shares 
Non-vested at January 1, 2024   97,827 
Granted   - 
Vested   (97,827)
Forfeited   - 
Non-vested at June 30, 2024   - 

 

Stock-Based Compensation Expense

 

The following table presents information related to stock-based compensation expense:

 

            Weighted Average  
  

For the Three Months Ended

June 30,

  

For the Six Months Ended

June 30,

  

Unrecognized at

June 30,

  

Remaining

Amortization Period

 
   2024   2023   2024   2023   2024   (Years) 
General and administrative  $324,322   $1,485,668   $2,352,696   $4,864,166   $1,344,375    1.86 
Total  $324,322   $1,485,668   $2,352,696   $4,864,166   $1,344,375    1.86 

 

The following table presents stock-based compensation by award type:

 

SCHEDULE OF STOCK COMPENSATION BY AWARD TYPE

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Options  $324,322   $321,534   $1,367,658   $2,511,962 
RSUs   -    1,164,134    985,038    2,352,204 
Total  $324,322   $1,485,668   $2,352,696   $4,864,166 

 

NOTE 5 - LEASES

 

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.

 

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%.

 

15
 

 

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

 

   2024   2023 
   For the Six Months Ended 
   June 30, 
   2024   2023 
Lease Costs          
Operating lease cost (cost resulting from lease payments)  $86,530   $84,014 
Net lease costs  $86,530   $84,014 
           
Operating lease - operating cash flows (fixed payments)  $86,530   $84,014 
Operating lease - operating cash flows (liability reduction)  $78,737   $67,585 
Non-current leases - right of use assets  $78,146   $183,738 
Current liabilities - operating lease liabilities  $83,580   $150,480 
Non-current liabilities - operating lease liabilities  $-   $83,580 

 

Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases as of June 30, 2024:

 

Fiscal Year  Operating Leases 
2024  $86,530 
Total future minimum lease payments   86,530 
Amount representing interest   (2,950)
Present value of net future minimum lease payments  $83,580 

 

NOTE 6 – FAIR VALUE MEASUREMENT

 

On February 8, 2024, in connection with the Warrant Exercise and Issuance, the Company estimated the aggregate fair value of the Existing Warrants (see Note 4 - Stockholders’ Equity for details) to be $1,115,334 using the Black-Scholes option pricing model (Level 3 inputs). The following table shows the detail of the valuation assumptions used:

 

   February 8, 2024 
Risk free interest rate   4.20 - 4.28%
Expected term (years)   2.75 - 2.76 
Expected volatility   102%
Expected dividends   0.00%

 

On February 8, 2024, the Company estimated the aggregate issuance date fair value of the derivative liability related to the New Warrants (see Note 4 - Stockholders’ Equity for details) as $2,189,420 using the Black-Scholes option pricing model (Level 3 inputs).

 

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The following table shows the detail of the valuation assumptions used:

 

   February 8, 2024 
Risk free interest rate   4.12%
Expected term (years)   5.00 
Expected volatility   101%
Expected dividends   0.00%

 

On June 30, 2024, the Company estimated the aggregate fair value of warrants that are accounted for as derivative liabilities to be $4,491,969 using the Black-Scholes option price model (Level 3 inputs) and, accordingly, recognized a loss on the change in fair value of these derivative liabilities of $1,873,930 during the six months ended June 30, 2024. The following table shows the detail of the valuation assumptions used:

 

   June 30, 2024 
Risk free interest rate   4.37 - 4.62%
Expected term (years)   2.36 - 4.61 
Expected volatility   103% - 106%
Expected dividends   0.00%

 

The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the six months ended June 30, 2024:

 

Balance, January 1, 2024 (as restated)  $1,543,953 
Issuance of warrants   2,189,420 
Exercise of warrants   (1,115,334)
Change in fair value of derivative liability   1,873,930 
Balance, June 30, 2024  $4,491,969 

 

Assets and liabilities measured at fair value on a recurring basis are as follows:

 

   Fair value measurements at reporting date using: 
   Quoted prices in active markets for identical liabilities (Level 1)   Significant other observable inputs (Level 2)   Significant unobservable inputs (Level 3)   Total Fair Value 
Assets:                    
Marketable securities as of June 30, 2024  $12,428,218   $-   $-   $12,428,218 
Marketable securities as of December 31, 2023  $10,181,618   $-   $-   $10,181,618 
                     
Liabilities:                    
Marketable securities as of June 30, 2024  $-   $-   $4,491,969   $4,491,969 
Derivative liabilities as of December 31, 2023 (as restated)  $-   $-   $1,543,953   $1,543,953 

 

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated interim financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Amendment No. 1 to the Annual Report on Form 10-K/A, which was filed with the Securities and Exchange Commission (the “SEC”) on June 11, 2024.

 

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/A for the fiscal year ended December 31, 2023, as filed with the SEC on June 11, 2024, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:

 

● our ability to obtain financing needed to complete our clinical trials and implement our business plan;
● our ability to successfully develop and commercialize BRTX-100, our lead product candidate for the treatment of chronic lumbar disc disease, as well as our metabolic ThermoStem Program and commercial biocosmeceuticals platform;
● our ability to protect our proprietary rights;
● our ability to achieve and sustain profitability of the existing lines of business;
● our ability to attract and retain world-class research and development talent;
● our ability to attract and retain key science, technology and management personnel and to expand our management team;
● the accuracy of estimates regarding expenses, future revenue, capital requirements, profitability, and needs for additional financing;
● business interruptions resulting from geo-political actions, including war and terrorism or disease outbreaks (such as the recent outbreak of COVID-19);
● our ability to attract and retain customers;
● our ability to navigate through the increasingly complex therapeutic regulatory environment;
● our ability to successfully engage in any new business lines that we pursue; and
● risks related to the restatement of our previously issued financial statements.

 

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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 Nevada corporation (“BRT”), and its wholly-owned subsidiary, Stem Pearls, LLC, a New York limited liability company (“Stem Pearls”). Unless otherwise specified, all dollar amounts are expressed in United States dollars.

 

Intellectual Property

 

This report includes references to our federally registered trademarks, BioRestorative Therapies and Dragonfly design, BRTX-100, ThermoStem, and BRTX. The Dragonfly logo is also registered with the U.S. Copyright Office. This report may also include references to trademarks, trade names and service marks that are the property of other organizations. Solely for convenience, trademarks and trade names referred to in this report appear without the ®, SM or ™ symbols, and copyrighted content appears without the use of the symbol ©, but the absence of use of these symbols does not reflect upon the validity or enforceability of the intellectual property owned by us or third parties.

 

Corporate History

 

Our offices are located in Melville, New York where we have established a laboratory facility in order to increase our capabilities for the further development of possible cellular-based treatments, products and protocols, stem cell-related intellectual property and translational research applications.

 

As of June 30, 2024, our accumulated deficit was $152,951,151. We have historically only generated a modest amount of revenue, and our losses have principally been operating expenses incurred in research and development, marketing and promotional activities in order to commercialize our products and services, plus costs associated with meeting the requirements of being a public company. We expect to continue to incur substantial costs for these activities over at least the next year.

 

Business Overview

 

We develop therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells.

 

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We are currently pursuing our Disc/Spine Program with our initial investigational therapeutic product being called BRTX-100. In March 2022, a United States patent issued in our Disc/Spine Program. We have received authorization from the FDA to commence a Phase 2 clinical trial investigating the use of BRTX-100 in the treatment of chronic lower back pain arising from degenerative disc disease. We have commenced such clinical trial through the execution of a CRO agreement with Professional Research Consulting, Inc., d/b/a PRC Clinical, the execution of clinical trial site agreements, patient enrollment, the commencement of patient procedures, the purchase of manufacturing equipment and the expansion of our laboratory to include capabilities for clinical production. We have received a license from the New York State Department of Health to act as a tissue bank for mesenchymal stem cell processing. In June 2023, we received a unanimous recommendation from the Data Safety Monitoring Board to continue our Phase 2 clinical trial without any changes. We have obtained a worldwide (excluding Asia and Argentina) exclusive license to use technology for investigational adult stem cell treatment of disc and spine conditions, including protruding and bulging lumbar discs. The technology is an advanced stem cell injection procedure that may offer relief from lower back pain, buttock and leg pain, and numbness and tingling in the leg and foot. We are investigating the expansion of the clinic application of BRTX-100 to other indications within the body.

 

We are also developing our ThermoStem Program. This pre-clinical program involves the use of brown adipose (fat) in connection with the cell-based treatment of type 2 diabetes and obesity as well as hypertension, other metabolic disorders and cardiac deficiencies. United States patents related to the ThermoStem Program were issued in September 2015, January 2019, March 2020, March 2021, July 2021, June 2023 and December 2023; Australian patents related to the ThermoStem Program were issued in April 2017, October 2019, and August 2021; Japanese patents related to the ThermoStem Program were issued in December 2017, June 2021, February 2022 and June 2023; Israeli patents related to our ThermoStem Program were issued in October 2019, May 2020, and March 2022; European patents related to the ThermoStem Program were issued in April 2020, January 2021, and July 2023.

 

We have obtained a license for a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or materials to the spine and discs or other potential sites. We anticipate that FDA approval or clearance will be necessary for this device prior to commercialization. We do not intend to utilize this device in connection with our Phase 2 clinical trial with regard to BRTX-100.

  

In addition, in continuation of our mission of developing and commercializing cell-based biologics, we are seeking to develop a biologics-based cosmetic products business. Pursuant to such business, we would formulate, manufacture and sell products designed for cosmetic and aesthetic uses. In April 2024, we announced that we have entered into a five-year exclusive supply agreement with Cartessa Aesthetics, LLC (“Cartessa”), a leading North American based aesthetic company, to supply to Cartessa our first commercial product.

 

Revenue

 

We derived some of our revenue pursuant to a license agreement with a stem cell treatment company (the “SCTC”) entered into in January 2012, as amended in November 2015 and November 2022. Pursuant to the license agreement, the SCTC granted to us an exclusive license to use certain intellectual property related to, among other things, stem cell disc procedures and we have granted to the SCTC a sublicense to use, and the right to sublicense to third parties the right to use, in certain locations in the United States and the Cayman Islands, certain of the licensed intellectual property. In consideration of the sublicenses, the SCTC has agreed to pay us royalties on a per disc procedure basis.

 

We also derived our initial product revenue from our five-year exclusive supply agreement with Cartessa entered into in April 2024.

 

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Results of Operations

 

Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

 

Our financial results for the three months ended June 30, 2024 are summarized as follows in comparison to the three months ended June 30, 2023:

 

    For the Three Months Ended  
    June 30  
    2024     2023  
          (As Restated)  
             
Revenues   $ 89,100     $ 64,500  
Cost of goods sold     6,490       -  
Gross profit     82,610       64,500  
                 
Operating Expenses:                
Research and development     1,292,182       902,891  
General and administrative     1,259,235       2,278,160  
Total Operating Expenses     2,551,417       3,181,051  
Loss From Operations     (2,468,807 )     (3,116,551 )
                 
Other (Income) Expense:                
Interest income     (175,945 )     (96,187 )
Other income     (911 )     (39,812 )
Change in fair value of derivative liabilities     1,736,611       2,728,847  
                 
Total Other Expense     1,559,755       2,592,848  
                 
Net Loss   $ (4,028,562 )   $ (5,709,399 )

 

Revenues

 

For the three months ended June 30, 2024 and 2023, we generated $19,800 and $64,500, respectively, of royalty revenue in connection with our sublicense agreement with the SCTC primarily due to a decrease in disc procedures which we expect will increase in future periods.

 

For the three months ended June 30, 2024 and 2023, we generated $69,300 and $0, respectively, of cosmetic product sales revenue in connection with our exclusive supply agreement with Cartessa. We expect that our product sales revenue will increase in future periods as we execute on our contract with Cartessa.

 

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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 June 30, 2024, research and development expenses increased by $389,291, or 43%, compared to the three months ended June 30, 2023. The increase was primarily the result of an increase in lab supply expense of $208,374, an increase in payroll expense of $129,348, an increase in consulting expense of $23,482 and an increase in equipment deprecation related to new equipment of $20,319. We expect that our research and development expenses will continue to increase in subsequent fiscal periods.

 

General and Administrative

 

General and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses. For the three months ended June 30, 2024, general and administrative expenses decreased by $1,018,925, or 45%, as compared to the three months ended June 30, 2023, primarily driven by a decrease in stock-based compensation expense of $1,161,346 related to vesting of awards, partially offset by an increase in professional fees of approximately $111,711 primarily related to the recent restatement of our historical financial statements.

 

Interest Income

 

For the three months ended June 30, 2024, interest income was $175,945, compared to interest income of $96,187 for the three months ended June 30, 2023. The change was primarily due to interest and dividend income on the investments held in marketable securities.

 

Other Income

 

For the three months ended June 30, 2024 and 2023, other income primarily related to gains from settlements of certain accrued expenses and realized and unrealized gain on investments.

 

Change in Fair Value of Derivative Liabilities

 

For the three months ended June 30, 2024 and 2023, we recognized a loss on the change in fair value of derivative liabilities of $1,736,611 and $2,728,847, respectively, related to the increase in fair value of warrants that are accounted for as derivative liabilities.

 

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Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

 

Our financial results for the six months ended June 30, 2024 are summarized as follows in comparison to the six months ended June 30, 2023:

 

    For the Six Months Ended  
    June 30  
    2024     2023  
          (As Restated)  
             
Revenues   $ 124,100     $ 95,800  
Cost of goods sold     6,490       -  
Gross profit     117,610       95,800  
                 
Operating Expenses:                
Research and development     2,350,313       2,134,636  
General and administrative     4,345,356       6,856,813  
Total Operating Expenses     6,695,669       8,991,449  
Loss From Operations     (6,578,059 )     (8,895,649 )
                 
Other (Income) Expense:                
Interest income     (338,542 )     (114,403 )
Other income     (149,932 )     (116,472 )
Gain on exchange of warrants     (1,711,698 )     -  
Change in fair value of derivative liabilities     1,873,930       4,217,197  
                 
Total Other (Income) Expense     (326,242 )     3,986,322  
                 
Net Loss   $ (6,251,817 )   $ (12,881,971 )

 

Revenues

 

For the six months ended June 30, 2024 and 2023, we generated $54,800 and $95,800, respectively, of royalty revenue in connection with our sublicense agreement with the SCTC primarily due to a decrease in disc procedures which we expect will increase in future periods.

 

For the six months ended June 30, 2024 and 2023, we generated $69,300 and $0, respectively, of cosmetic product sales revenue in connection with our exclusive supply agreement with Cartessa. We expect that our product sales revenue will increase in future periods as we execute on our contract with Cartessa.

 

Research and Development

 

Research and development expenses include cash and non-cash compensation of (a) our Vice President of Research and Development; (b) our Scientific Advisory Board members; and (c) laboratory staff and costs related to our brown fat and disc/spine initiatives. Research and development expenses are expensed as they are incurred. For the six months ended June 30, 2024, research and development expenses increased by $215,677, or 10%, compared to the six months ended June 30, 2023. The increase was primarily the result of increased lab supply expense of $285,883 and increased payroll expense of $145,380, all partially offset by a decrease in bonus expense of $210,878. We expect that our research and development expenses will continue to increase in subsequent fiscal periods.

 

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General and Administrative

 

General and administrative expenses consist primarily of salaries, bonuses, payroll taxes and stock-based compensation to employees, as well as corporate expenses such as legal and professional fees, investor relations and occupancy-related expenses. For the six months ended June 30, 2024, general and administrative expenses decreased by $2,511,457, or 37%, as compared to the six months ended June 30, 2023, primarily driven by a decrease in stock-based compensation expense of $2,511,470 related to the vesting of awards and a decrease in payroll expense of $210,981 all partially offset by an increase in professional fees of $176,339 primarily related to the recent restatement of our historical financial statements.

 

Interest Income

 

For the six months ended June 30, 2024, interest income was $338,542, compared to interest income of $114,403 for the six months ended June 30, 2023. The change was primarily due to interest and dividend income on the investments held in marketable securities.

 

Other (Income) Expense

 

For the six months ended June 30, 2024 and 2023, other (income) expense was primarily related to gains from settlements of certain accrued expenses and realized and unrealized gain on investments.

 

Gain on Exchange of Warrants

 

For the six months ended June 30, 2024, we recognized a gain on exchange of $1,711,698 related to the issuance of warrants and common stock in exchange for the cancellation of existing warrants.

 

Change in Fair Value of Derivative Liabilities

 

For the six months ended June 30, 2024 and 2023, we recognized a loss on the change in fair value of derivative liabilities of $1,873,930 and $4,217,197, respectively, related to the increase in fair value of warrants that are accounted for as derivative liabilities.

 

Liquidity and Capital Resources

 

Liquidity

 

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

 

   June 30, 2024   December 31, 2023 
       (As Restated) 
Cash and cash equivalents  $2,252,247   $884,377 
Investments held in marketable securities  $12,428,218   $10,181,618 
Working capital  $9,683,935   $8,783,181 

 

Working capital increased by $900,754 primarily due to the $7,505,646 of cash provided by financing activities which was partially offset by $4,182,945 of cash used to fund our operations and $1,954,831 of cash used to fund our investments.

 

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Availability of Additional Funds

 

Based upon our accumulated deficit of $152,951,151 as of June 30, 2024, along with our forecast for continued operating losses and our need for financing to fund our current and contemplated clinical trials, we will eventually require additional equity and/or debt financing to continue our operations. However, based on cash and cash equivalents and investments on hand, we believe we have sufficient cash to fund operations for at least 12 months after the issuance date of these financial statements.

  

Our operating needs include the planned costs to operate our business, including amounts required to fund our clinical trials, working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

 

We may be unable to raise sufficient additional capital when we need it or raise capital on favorable terms. Future financing may require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness and may contain other terms that are not favorable to our stockholders or us. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms.

 

Cash Flows

 

During the six months ended June 30, 2024 and 2023, our sources and uses of cash were as follows:

 

   Six Months Ended June 30, 
   2024   2023 
       (As Restated) 
Net Cash Used In Operating Activities  $(4,182,945)  $(3,662,831)
Net Cash (Used In) Provided By Investing Activities  $(1,954,831)  $3,358,199 
Net Cash Provided By Financing Activities  $7,505,646   $411,701 

 

 Operating Activities

 

Net cash used in operating activities was $4,182,945 for the six months ended June 30, 2024, primarily due to cash used to fund the net loss of $6,251,817, adjusted for net non-cash expenses of $2,351,582, and $282,710 of cash used in changes in operating assets and liabilities. Net cash used in operating activities was $3,662,831 for the six months ended June 30, 2023, primarily due to cash used to fund the net loss of $12,881,971, adjusted for non-cash expenses of $9,014,104, and $205,036 of cash provided by changes in operating assets and liabilities.

 

Investing Activities

 

Net cash used in investing activities was $1,954,831 for the six months ended June 30, 2024 primarily due to a purchase of marketable securities which used $12,784,535 of cash and a sale of marketable securities which provided $10,865,000 of cash. Net cash provided by investing activities was $3,358,199 for the six months ended June 30, 2023 primarily due to a sale of marketable securities which provided $10,982,932 of cash and a purchase of marketable securities which used $7,535,662 of cash.

 

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Financing Activities

 

Net cash provided by financing activities was $7,505,646 for the six months ended June 30, 2024 due to net proceeds received in connection with the exercise and issuance of warrants, compared to $411,701 net cash provided by financing activities for the six months ended June 30, 2023 due to the net proceeds from the at-the-market offering of our Common Stock.

 

Effects of Inflation

 

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

  

Critical Accounting Policies and Estimates

 

We prepare our unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

 

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our unaudited condensed consolidated financial statements that require estimation but are not deemed critical, as defined above.

 

For a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements in “Item 1. Financial Statements” of this report.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

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

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

 

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Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we are required to perform an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act, as of June 30, 2024.

 

Management has completed such evaluation and has concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is appropriate to allow timely decisions regarding required disclosures. As a result of the material weaknesses in internal controls over financial reporting described below, we concluded that our disclosure controls and procedures as of June 30, 2024 were not effective.

 

Material Weaknesses in Internal Control over Financial Reporting

 

A material weakness, as defined in the standards established by Sarbanes-Oxley, is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

 

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. The following material weaknesses in our internal control over financial reporting were present as of December 31, 2023 and continued to exist as of June 30, 2024:

 

● Lack of adherence to formal policies and procedures;
● Lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner;
● Lack of sufficient formal management testing over documented formal procedures and controls, and time to evaluate continuous effectiveness of controls to achieve complete and accurate financial reporting and disclosures, including documented controls over the preparation and review of journal entries and account reconciliations; and
● Lack of design and implementation of effective controls over the accounting for warrants issued in connection with equity financings.

 

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Management’s Plan to Remediate the Material Weaknesses

 

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:

 

● Management personnel, including our Chief Financial Officer, are overseeing the financial reporting process and implementation of enhanced controls and governance;
● Engagement of external financial consulting firm with expertise in accounting for significant and complex non-routine transactions to continue to enhance financial reporting, financial operations and internal controls; and
● Documentation of key procedures and controls using a risk-based approach.

 

Management is committed to maintaining a strong internal controls environment and implementing measures designed to help ensure that control deficiencies contributing to the material weaknesses are remediated as soon as possible. We have documented key procedures and controls using a risk-based approach and have, therefore, made progress toward remediation. We continue to implement our remediation plan, which includes continued engagement of an external financial consulting firm to enhance financial reporting and operations as well as design and implementation of controls. We will consider the material weaknesses remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

 

Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

Changes in Internal Control Over Financial Reporting

 

Other than described above, there have been no changes in our internal control over financial reporting that occurred during our second quarter of 2024 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

Item 1A. Risk Factors

 

An investment in our Common Stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2023, as filed with the SEC on June 11, 2024, in addition to other information contained in that report and in this quarterly report in evaluating the Company and its business before purchasing shares of our Common Stock. The Company’s business, operating results and financial condition could be adversely affected due to any of those risks.

 

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds

 

During the three months ended June 30, 2024, we did not have any unregistered sales of equity securities. 

 

Item 6. Exhibits

 

        Incorporated by Reference

Exhibit

Number

   Exhibit Description   Form   Exhibit   Filing Date
3.1   Amended and Restated Articles of Incorporation   8-K   3.3   1/5/2023
3.2   Certificate of Designations of Preferred Stock (Series B)   8-K   3.4   1/5/2023
3.3   Bylaws   8-K   3.5   1/5/2023
31.1*   Certification of Principal Executive Officer            
31.2*   Certification of Principal Financial Officer            
32.1**   Section 1350 Certification of Principal Executive Officer and Principal Financial Officer            
101.INS   Inline XBRL Instance Document            
101.SCH   Inline XBRL Taxonomy Extension Schema Document            
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document            
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document            
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document            
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document            
104   Cover Page Interactive Date File (embedded within the Inline XBRL document)            

 

* Filed herewith.
** In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

 

29
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BIORESTORATIVE THERAPIES, INC.  
     
By: /s/ Lance Alstodt  
  Lance Alstodt  
  Chief Executive Officer, President, and Chairman of the Board  
  (Principal Executive Officer)  
Date: August 13, 2024  
     
By: /s/ Robert E. Kristal  
  Robert E. Kristal  
  Chief Financial Officer  
  (Principal Financial Officer)  
Date: August 13, 2024  

 

30

 

 

Exhibit 31.1

 

SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

I, Lance Alstodt, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of BioRestorative Therapies, Inc.

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

  /s/ Lance Alstodt
Date: August 13, 2024 Lance Alstodt
  Principal Executive Officer

 

 

 

 

Exhibit 31.2

 

SECTION 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

 

I, Robert Kristal, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of BioRestorative Therapies, Inc.

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

  /s/ Robert Kristal
Date: August 13, 2024 Robert Kristal
  Principal Financial Officer

 

 

 

Exhibit 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

AND PRINCIPAL FINANCIAL OFFICER

 

PURSUANT TO

 

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

Pursuant to 18 U.S.C. § 1350, the undersigned officers of BioRestorative Therapies, Inc. (the “Company”) hereby certify that the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

  /s/ Lance Alstodt
Date: August 13, 2024 Lance Alstodt
  Principal Executive Officer
   
  /s/ Robert Kristal
  Robert Kristal
  Principal Financial Officer

 

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

 

 

 

v3.24.2.u1
Cover - shares
 6 Months Ended
Jun. 30, 2024
Aug. 12, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-37603  
Entity Registrant Name BIORESTORATIVE THERAPIES, INC.  
Entity Central Index Key 0001505497  
Entity Tax Identification Number 30-1341024  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 40 Marcus Drive  
Entity Address, City or Town Melville  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 11747  
City Area Code (631)  
Local Phone Number 760-8100  
Title of 12(b) Security Common Stock, $0.0001 par value  
Trading Symbol BRTX  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Bankruptcy Proceedings, Reporting Current true  
Entity Common Stock, Shares Outstanding   6,919,919
v3.24.2.u1
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 2,252,247 $ 884,377
Investments held in marketable securities 12,428,218 10,181,618
Accounts receivable 27,400 19,300
Prepaid expenses and other current assets 295,861 305,231
Total Current Assets 15,003,726 11,390,526
Property and equipment, net 345,807 356,055
Right-of-use assets 78,146 151,447
Intangible assets, net 668,818 713,692
Deferred offering costs 22,381
Total Assets 16,118,878 12,611,720
Current Liabilities:    
Accounts payable 215,920 189,389
Accrued expenses and other current liabilities 447,622 711,686
Deferred revenue 80,700
Lease liability 83,580 162,317
Derivative liabilities 4,491,969 1,543,953
Total Current Liabilities 5,319,791 2,607,345
Total Liabilities 5,319,791 2,607,345
Commitments and contingencies
Stockholders’ Equity:    
Preferred stock, $0.01 par value; 20,000,000 shares authorized; Series B Convertible Preferred Stock; 1,543,158 shares designated, 1,398,158 shares issued and outstanding at June 30, 2024 and December 31, 2023 13,982 13,982
Common stock, $0.0001 par value; 75,000,000 shares authorized; 6,919,919 and 4,706,917 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 692 471
Additional paid-in capital 163,735,564 156,689,256
Accumulated deficit (152,951,151) (146,699,334)
Total Stockholders’ Equity 10,799,087 10,004,375
Total Liabilities and Stockholders’ Equity $ 16,118,878 $ 12,611,720
v3.24.2.u1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 20,000,000 20,000,000
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 75,000,000 75,000,000
Common stock, shares issued 6,919,919 4,706,917
Common stock, shares outstanding 6,919,919 4,706,917
Series B Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 1,543,158 1,543,158
Preferred stock, shares issued 1,398,158 1,398,158
Preferred stock, shares outstanding 1,398,158 1,398,158
v3.24.2.u1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Revenues $ 89,100 $ 64,500 $ 124,100 $ 95,800
Cost of goods sold 6,490 6,490
Gross profit 82,610 64,500 117,610 95,800
Operating Expenses:        
Research and development 1,292,182 902,891 2,350,313 2,134,636
General and administrative 1,259,235 2,278,160 4,345,356 6,856,813
Total Operating Expenses 2,551,417 3,181,051 6,695,669 8,991,449
Loss From Operations (2,468,807) (3,116,551) (6,578,059) (8,895,649)
Other (Income) Expense:        
Interest income (175,945) (96,187) (338,542) (114,403)
Other income (911) (39,812) (149,932) (116,472)
Gain on exchange of warrants (1,711,698)
Change in fair value of derivative liabilities 1,736,611 2,728,847 1,873,930 4,217,197
Total Other Expense (Income) 1,559,755 2,592,848 (326,242) 3,986,322
Net Loss $ (4,028,562) $ (5,709,399) $ (6,251,817) $ (12,881,971)
Net Loss Per Share - Basic $ (0.50) $ (1.47) $ (0.84) $ (3.39)
Net Loss Per Share - Diluted $ (0.50) $ (1.47) $ (0.84) $ (3.39)
Weighted Average Common Shares Outstanding - Basic 8,121,499 3,886,309 7,400,446 3,803,323
Weighted Average Common Shares Outstanding - Diluted 8,121,499 3,886,309 7,400,446 3,803,323
v3.24.2.u1
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
Preferred Stock [Member]
Series B Convertible Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance value at Dec. 31, 2022 $ 15,182 $ 369 $ 146,556,418 $ (136,281,630) $ 10,290,339
Balance, shares at Dec. 31, 2022 1,518,158 3,677,775      
Return and cancellation of shares in lieu of payroll tax withholding $ (1) (39,307) (39,308)
Return and cancellation of shares in lieu of payroll tax withholding, shares   (10,058)      
Stock-based compensation:          
Restricted share units $ 10 1,188,060 1,188,070
Restricted share units, shares   99,898      
Options 2,190,428 2,190,428
Net loss (as restated) (7,172,572) (7,172,572)
Balance value at Mar. 31, 2023 $ 15,182 $ 378 149,895,599 (143,454,202) 6,456,957
Balance, shares at Mar. 31, 2023 1,518,158 3,767,615      
Balance value at Dec. 31, 2022 $ 15,182 $ 369 146,556,418 (136,281,630) 10,290,339
Balance, shares at Dec. 31, 2022 1,518,158 3,677,775      
Stock-based compensation:          
Net loss (as restated)         (12,881,971)
Balance value at Jun. 30, 2023 $ 13,982 $ 399 151,794,156 (149,163,601) 2,644,936
Balance, shares at Jun. 30, 2023 1,398,158 3,982,608      
Balance value at Mar. 31, 2023 $ 15,182 $ 378 149,895,599 (143,454,202) 6,456,957
Balance, shares at Mar. 31, 2023 1,518,158 3,767,615      
Stock-based compensation:          
Restricted share units 1,164,134 1,164,134
Restricted share units, shares   1,442      
Options 321,534 321,534
Net loss (as restated) (5,709,399) (5,709,399)
Issuance of common stock $ 9 411,701 411,710
Issuance of common stock, shares   93,551      
Conversion of Series B preferred to common stock $ (1,200) $ 12 1,188
Conversion of Series B preferred to common stock, shares (120,000) 120,000      
Balance value at Jun. 30, 2023 $ 13,982 $ 399 151,794,156 (149,163,601) 2,644,936
Balance, shares at Jun. 30, 2023 1,398,158 3,982,608      
Balance value at Dec. 31, 2023 $ 13,982 $ 471 156,689,256 (146,699,334) 10,004,375
Balance, shares at Dec. 31, 2023 1,398,158 4,706,917      
Common stock issued in connection with warrant exchange [1] $ 200 4,742,043 4,742,243
Common stock issued in connection with warrant exchange, shares [1]   2,000,000      
Return and cancellation of shares in lieu of payroll tax withholding $ (4) (48,406) (48,410)
Return and cancellation of shares in lieu of payroll tax withholding, shares   (34,825)      
Stock-based compensation:          
Restricted share units $ 10 985,028 985,038
Restricted share units, shares   97,827      
Options 1,043,336 1,043,336
Net loss (as restated) (2,223,255) (2,223,255)
Balance value at Mar. 31, 2024 $ 13,982 $ 677 163,411,257 (148,922,589) 14,503,327
Balance, shares at Mar. 31, 2024 1,398,158 6,769,919      
Balance value at Dec. 31, 2023 $ 13,982 $ 471 156,689,256 (146,699,334) 10,004,375
Balance, shares at Dec. 31, 2023 1,398,158 4,706,917      
Stock-based compensation:          
Net loss (as restated)         (6,251,817)
Balance value at Jun. 30, 2024 $ 13,982 $ 692 163,735,564 (152,951,151) 10,799,087
Balance, shares at Jun. 30, 2024 1,398,158 6,919,919      
Balance value at Mar. 31, 2024 $ 13,982 $ 677 163,411,257 (148,922,589) 14,503,327
Balance, shares at Mar. 31, 2024 1,398,158 6,769,919      
Stock-based compensation:          
Options 324,322 324,322
Net loss (as restated) (4,028,562) (4,028,562)
Common stock issued in connection with abeyance shares $ 15 (15)
Common stock issued in connection with abeyance shares, shares   150,000      
Balance value at Jun. 30, 2024 $ 13,982 $ 692 $ 163,735,564 $ (152,951,151) $ 10,799,087
Balance, shares at Jun. 30, 2024 1,398,158 6,919,919      
[1] Represents the aggregate fair value of 3,351,580 shares of common stock, which includes 2,150,000 that have been issued and 1,201,580 shares held in abeyance. See Note 4 - Stockholders’ Equity - Warrant Exercise and Issuance and Note 6 - Fair Value Measurement for additional details.
v3.24.2.u1
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - shares
Jun. 30, 2024
Mar. 31, 2024
Warrants exercisable   3,351,580
Shares held in abeyance 1,201,580 1,201,580
Common Stock [Member]    
Warrants exercisable 2,150,000 2,150,000
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash Flows From Operating Activities:    
Net loss $ (6,251,817) $ (12,881,971)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 90,418 80,877
Dividend and interest income (327,065) (206,158)
Stock-based compensation 2,352,696 4,864,166
Non-cash lease expense 73,301 58,022
Gain on exchange of warrants (1,711,698)
Change in fair value of derivative liabilities 1,873,930 4,217,197
Changes in operating assets and liabilities:    
Accounts receivable (8,100) (9,000)
Prepaid expenses and other current assets (39,040) (79,778)
Accounts payable 26,531 105,146
Accrued expenses and other current liabilities (264,064) 256,253
Deferred revenue 80,700
Lease liability (78,737) (67,585)
Net Cash Used In Operating Activities (4,182,945) (3,662,831)
Cash Flows From Investing Activities:    
Sale of marketable securities 10,865,000 10,982,932
Purchase of marketable securities (12,784,535) (7,535,662)
Purchases of equipment (35,296) (89,071)
Net Cash (Used In) Provided By Investing Activities (1,954,831) 3,358,199
Cash Flows From Financing Activities:    
Net proceeds from issuance of common stock in at-the-market offering 411,701
Proceeds from exchange and issuance of warrants, net [1] 7,528,027
Deferred offering costs (22,381)
Net Cash Provided By Financing Activities 7,505,646 411,701
Net Increase In Cash and Cash Equivalents 1,367,870 107,069
Cash and Cash Equivalents - Beginning of the Period 884,377 1,676,577
Cash and Cash Equivalents - End of the Period 2,252,247 1,783,646
Supplemental Disclosures of Cash Flow Information:    
Interest
Income taxes
Non-cash investing and financing activities:    
Issuance of common stock held in abeyance 15
Return and cancellation of shares in lieu of payroll tax withholding $ 48,410 $ 39,308
[1] Includes gross proceeds of $8,123,391, less issuance costs of $595,364.
v3.24.2.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)
 6 Months Ended
Jun. 30, 2024
USD ($)
Statement of Cash Flows [Abstract]  
Proceeds from debt issuance costs $ 8,123,391
Issuance costs $ 595,364
v3.24.2.u1
BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY
 6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY

NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY

 

Corporate History

 

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

 

On December 23, 2022, the Company reincorporated from Delaware to Nevada by filing Articles of Incorporation with the state of Nevada. The reincorporation was structured as a statutory merger.

 

Business Operations

 

BRT develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells. BRT’s website is at www.biorestorative.com. The information contained in the website or connected thereto is not intended to be incorporated by reference into this Quarterly Report. BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”. Its lead cell therapy candidate, BRTX-100, is a product formulated from autologous (or a person’s own) cultured mesenchymal stem cells collected from the patient’s bone marrow. The product is intended to be used for the non-surgical treatment of painful lumbosacral disc disorders or as a complimentary therapeutic to a surgical procedure. BRT is also engaging in research efforts with respect to a platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other metabolic disorders and has labeled this initiative its ThermoStem Program. In addition, in continuation of BRT’s mission of developing and commercializing cell-based biologics, it is seeking to develop a biologics-based cosmetic products business. Pursuant to such business, BRT would formulate, manufacture and sell products designed for cosmetic and aesthetic uses. Further, BRT has licensed a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or material to the spine and discs or other potential sites.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. The December 31, 2023 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by U.S. GAAP. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) that are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2024 and for the three and six months then ended. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results for the full year ending December 31, 2024 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2023 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on June 11, 2024 as part of the Company’s Amendment No. 1 to the Annual Report on Form 10-K/A (the “Form 10-K/A”), which includes the restatement of the Company’s consolidated financial statements, including periods that are included in this Quarterly Report on Form 10-Q. Refer to Note 2 - Summary of Significant Accounting Policies - Restatement of Previously Issued Consolidated Financial Statements and Note 3 - Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements in the Form 10-K/A for additional information.

 

 

Liquidity

 

For the six months ended June 30, 2024, the Company had a net loss of $6.3 million, negative cash flows from operations of $4.2 million and working capital of $9.7 million. The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur net losses and negative cash flows from operations as it executes its development plans for 2024 and beyond, as well as other potential strategic and business development initiatives. The Company has previously funded, and plans to continue funding, these losses primarily through current cash on hand, investments in marketable securities and additional infusions of cash from equity and debt financing. During the six months ended June 30, 2024, the Company raised net proceeds of approximately $7.5 million in connection with a warrant exercise program which is further discussed in Note 4 – Stockholders’ Equity.

 

Based on cash on hand and investments as of the date these unaudited condensed consolidated financial statements were issued, which includes $7.5 million of net proceeds from the warrant exercise program, the Company believes it has sufficient cash to fund operations for at least 12 months after the issuance date of these unaudited condensed consolidated financial statements.

 

However, the Company’s current funds will not be sufficient to enable the Company to fully complete its development activities or attain profitable operations. If the Company is unable to obtain such needed additional financing on a timely basis, the Company may have to curtail its development, marketing and promotional activities, which would have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

See Amendment No. 1 to the Annual Report on Form 10-K/A for the year ended December 31, 2023, for a complete listing of the Company’s significant accounting policies.

 

Reclassifications

 

Certain prior period statements of operations, changes in stockholders’ equity and cash flows amounts have been reclassified to conform to the Company’s fiscal 2024 presentation. These reclassifications have no impact on the Company’s previously reported net loss.

 

 

Cash and Cash Equivalents

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution. The Company maintains deposits in its accounts that hold cash and cash equivalents in excess of the Federal Depository Insurance Corporation (“FDIC”) coverage of $250,000 per banking institution. The Company had deposits in excess of FDIC coverage of $1,964,341 and $604,226 as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, the Company has not experienced losses on this account.

 

Customer and Revenue Concentrations

 

All of the Company’s contract service revenue is derived from one customer. Additionally, all of the Company’s product sales revenue is derived from one customer.

 

Accounts Receivable

 

Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of June 30, 2024 and 2023, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted.

 

Deferred Revenue

 

As of June 30, 2024 and December 31, 2023, the Company had $80,700 and $0 of deferred revenue, respectively, from contracts with customers. The contract liabilities included in deferred revenue represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract. The Company expects to satisfy the remaining performance obligations and recognize the revenue related to its deferred revenue balance within the next twelve months. During the six months ended June 30, 2024, no revenues were recognized for performance obligations satisfied in previous periods.

 

Derivative Financial Instruments

 

The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

 

Fair Value of Financial Instruments

 

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:

 

Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

 

 

Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

 

Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

  

The Company considers cash and cash equivalents, investments held in marketable securities, accounts receivable, accounts payable and derivative liabilities to meet the definition of financial instruments. As of June 30, 2024 and December 31, 2023, the carrying amount of cash and cash equivalents, investments held in marketable securities, accounts receivable, and accounts payable approximate their fair value due to the relatively short period of time between their origination and their expected realization or payment. The warrants classified as derivative liabilities are measured at fair value (see Note 6 – Fair Value Measurement for additional details).

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company recognizes revenue primarily from the following different types of contracts:

 

  ● Product sales - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation.

 

  ● Royalty revenue - Revenue is recognized as a usage-based royalty from customers’ usage of intellectual property pursuant to a license agreement at the point in time in which the underlying sale occurs.

 

The Company recognizes bill-and-hold revenue from its sale of cosmetic vials warehoused at a Company location for a specified period of time in accordance with directions received from the Company’s customer. Even though the vials are held at a Company location, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill-and-hold arrangement when: (i) customer acceptance specifications have been met, (ii) legal title has transferred, (iii) the customer has a present obligation to pay for the product and (iv) the risks and rewards of ownership have transferred to the customer. Additionally, all the following bill-and-hold criteria have to be met in order for control to be transferred to the customer:

 

●the reason for the bill-and-hold arrangement is substantive
●the customer has requested the product be warehoused
●the product has been identified as separately belonging to the customer
●the product is currently ready for physical transfer to the customer
●the Company does not have the ability to use the product or direct it to another customer.

 

 

The following table summarizes the Company’s revenue recognized in its unaudited condensed consolidated statements of operations:

 

   2024   2023   2024   2023 
   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Product revenue  $69,300   $-   $69,300   $- 
Royalty revenue   19,800    64,500    54,800    95,800 
Revenues  $89,100   $64,500   $124,100   $95,800 

 

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 outstanding options and warrants are considered potential common stock. The Company has 1,201,580 shares held in abeyance included in basic loss per share given that they are issuable for no additional consideration (see Note 4 – Stockholders’ Equity for additional details). The dilutive effect, if any, of stock options and warrants are calculated using the treasury stock method. All outstanding convertible preferred stock is considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, options, warrants, restricted stock units (“RSUs”) and convertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three and six months ended June 30, 2024 and 2023.

 

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 or conversion price could be less than the average market price of the common shares:

 

   For the Three and Six Months Ended 
   June 30, 
   2024   2023 
Stock options   3,401,608    1,466,890 
Warrants   3,952,511    4,791,072 
Unvested RSUs   -    97,827 
Convertible Preferred Stock   1,398,158    1,398,158 
    8,752,277    7,753,947 

 

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segments Disclosures (Topic 280), which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant (“ASU 2023-07”) segment expenses on both an annual and interim basis. The guidance becomes effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

 

 

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

 
v3.24.2.u1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 6 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

NOTE 3 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

Accrued expenses and other current liabilities consist of:

  

   June 30,   December 31, 
   2024   2023 
Accrued bonuses  $389,500   $638,000 
Accrued general and administrative expenses   58,122    73,686 
Total accrued expenses and other current liabilities  $447,622   $711,686 

 
v3.24.2.u1
STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 4 - STOCKHOLDERS’ EQUITY

  

Warrant Exercise and Issuance

 

On February 6, 2024, the Company entered into agreements with certain holders of its existing warrants exercisable for an aggregate of 3,351,580 shares of its Common Stock (collectively, the “Existing Warrants”), to exercise their warrants at a reduced exercise price of $2.33 per share, in exchange for the issuance of new warrants (the “New Warrants”) as described below (the “Warrant Exercise and Issuance”). The aggregate gross proceeds from the exercise of the Existing Warrants and the payment of the New Warrants, as described below, was approximately $8.1 million, before deducting cash issuance costs in the amount of $595,364. The reduction of the exercise price of the Existing Warrants and the issuance of the New Warrants was structured as an at-market transaction under Nasdaq rules. Of the 3,351,580 shares of Common Stock issuable upon the exercise of the Existing Warrants, through June 30, 2024, the Company had issued an aggregate of 2,150,000 shares of Common Stock. The remaining 1,201,580 shares of Common Stock, which are issuable to Auctus Fund, LLC (“Auctus”), are being held in abeyance due to Auctus’ maximum beneficial ownership limitation (the “Abeyance Shares”). Such Abeyance Shares have been fully paid for and are issuable upon notice from Auctus to the Company.

 

In consideration for the immediate exercise of the Existing Warrants for cash and the payment of $0.125 per share underlying the New Warrants, the exercising holders received the New Warrants to purchase shares of Common Stock in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The New Warrants will be exercisable for a period of five years into an aggregate of 2,513,686 shares of Common Stock at an exercise price of $2.43 per share. The securities offered in the private placement have not been registered under the Securities Act or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company agreed to file a resale registration statement with the SEC to register the resale of the shares of Common Stock underlying the New Warrants issued in the private placement. Such resale registration statement was filed and was declared effective by the SEC on April 18, 2024.

 

 

In connection with the transaction described above, the Company entered into a financial advisory services agreement, dated February 5, 2024, with Roth Capital Partners, LLC (“Roth”), pursuant to which the Company has paid Roth a cash fee of approximately $528,000 for its services, in addition to reimbursement for certain expense. During the six months ended June 30, 2024, the Company incurred an aggregate of $595,364 of cash issuance costs related to the Warrant Exercise and Issuance.

 

Prior to the Warrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities. Additionally, the Company analyzed the form of the New Warrants and determined that they should be classified as derivative liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Under the New Warrants, the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the New Warrants and not result in a change of control of the Company. As a result, such New Warrants do not meet the criteria for equity treatment. Additionally, certain New Warrants contain adjustments to the settlement amount based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40 and, accordingly, such New Warrants are not considered indexed to the Company’s own stock and are not eligible for an exception from derivative accounting. See Note 6 – Fair Value Measurement for details regarding the valuation of the Existing Warrants and New Warrants.

 

The Company determined the Warrant Exercise and Issuance to be an exchange by investors of Existing Warrants with an aggregate fair value of $1,115,334 along with aggregate cash consideration of $8,123,392 (consisting of $7,809,181 paid to exercise the Existing Warrants and $314,211 paid for the New Warrants) for an aggregate of 3,351,580 shares of common stock with an aggregate fair value of $4,742,244, New Warrants with an aggregate fair value of $2,189,420 and aggregate cash issuance costs of $595,364 and, accordingly, the Company recorded a gain on extinguishment of $1,711,698 during the six months ended June 30, 2024.

 

Warrants

 

See Note 6 – Fair Value of Financial Instruments for details regarding the valuation of the New Warrants.

 

A summary of the Company’s warrant activity and related information follows:

  

           Weighted 
       Weighted   Average 
       Average   Remaining 
   Number of   Exercise   Life 
   Warrants   Price   In Years 
Outstanding, January 1, 2024   4,791,019   $10.57      
Granted   2,513,686    2.43      
Exercised   (3,351,580)   2.33      
Expired   (614)   3,136.85      
Outstanding, June 30, 2024   3,952,511   $3.85    3.8 
                
Exercisable, June 30, 2024   3,952,511   $3.85    3.8 

 

 

As of June 30, 2024, the warrants exercisable and outstanding had an intrinsic value of $0.

 

Stock Options

 

On February 13, 2024, the Company granted options to purchase an aggregate 1,934,716 shares of the Company’s Common Stock at an exercise price of $1.45 per share to employees, the Company’s board of directors and a member of the Company’s Scientific Advisory Board. The options had an aggregate grant date fair value of $2,140,000 and vest as follows: (i) options to purchase an aggregate 513,663 shares of common stock vest monthly over one year, and (ii) options to purchase an aggregate of 1,421,053 shares of common stock vest to the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The Company will recognize the grant date fair value of the options proportionate to the vesting period.

 

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

  

   For the Six Months Ended 
   June 30, 
   2024   2023 
Risk free interest rate   4.14 - 4.30%    4.22%
Expected term (years)   2.77 - 5.27    3.5 
Expected volatility   101 - 102%    175%
Expected dividends   0.00%   0.00%

 

Options granted during the six months ended June 30, 2024 and 2023 had a weighted average grant date fair value per share of $1.11 and $2.77 per share, respectively. There were no stock options granted during the three months ended June 30, 2024 and 2023.

 

A summary of the stock option activity during the six months ended June 30, 2024 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining     
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
Outstanding, January 1, 2024   1,466,892   $4.11                    
Granted   1,934,716    1.45           
Exercised   -    -           
Forfeited   -    -           
Outstanding, June 30, 2024   3,401,608   $2.60    8.0   $- 
                     
Exercisable, June 30, 2024   2,189,947   $3.12    7.6   $- 

 

Restricted Stock Units (“RSUs”)

 

Pursuant to the Company’s 2021 Stock Incentive Plan (the “2021 Plan”), the Company may grant RSUs to employees, consultants or non-employee directors (“Eligible Individuals”). The number, terms and conditions of the RSUs that are granted to Eligible Individuals are determined on an individual basis by the 2021 Plan administrator. On the distribution date, the Company shall issue to the Eligible Individual one unrestricted, fully transferable share of the Company’s common stock (or the fair market value of one such share in cash) for each vested and nonforfeitable RSU.

 

 

A summary of the Company’s unvested RSUs as of June 30, 2024 is as follows:

 

   Number of Shares 
Non-vested at January 1, 2024   97,827 
Granted   - 
Vested   (97,827)
Forfeited   - 
Non-vested at June 30, 2024   - 

 

Stock-Based Compensation Expense

 

The following table presents information related to stock-based compensation expense:

 

            Weighted Average  
  

For the Three Months Ended

June 30,

  

For the Six Months Ended

June 30,

  

Unrecognized at

June 30,

  

Remaining

Amortization Period

 
   2024   2023   2024   2023   2024   (Years) 
General and administrative  $324,322   $1,485,668   $2,352,696   $4,864,166   $1,344,375    1.86 
Total  $324,322   $1,485,668   $2,352,696   $4,864,166   $1,344,375    1.86 

 

The following table presents stock-based compensation by award type:

 

SCHEDULE OF STOCK COMPENSATION BY AWARD TYPE

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Options  $324,322   $321,534   $1,367,658   $2,511,962 
RSUs   -    1,164,134    985,038    2,352,204 
Total  $324,322   $1,485,668   $2,352,696   $4,864,166 

 
v3.24.2.u1
LEASES
 6 Months Ended
Jun. 30, 2024
Leases  
LEASES

NOTE 5 - LEASES

 

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.

 

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%.

 

 

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

 

   2024   2023 
   For the Six Months Ended 
   June 30, 
   2024   2023 
Lease Costs          
Operating lease cost (cost resulting from lease payments)  $86,530   $84,014 
Net lease costs  $86,530   $84,014 
           
Operating lease - operating cash flows (fixed payments)  $86,530   $84,014 
Operating lease - operating cash flows (liability reduction)  $78,737   $67,585 
Non-current leases - right of use assets  $78,146   $183,738 
Current liabilities - operating lease liabilities  $83,580   $150,480 
Non-current liabilities - operating lease liabilities  $-   $83,580 

 

Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases as of June 30, 2024:

 

Fiscal Year  Operating Leases 
2024  $86,530 
Total future minimum lease payments   86,530 
Amount representing interest   (2,950)
Present value of net future minimum lease payments  $83,580 

 
v3.24.2.u1
FAIR VALUE MEASUREMENT
 6 Months Ended
Jun. 30, 2024
Investments, All Other Investments [Abstract]  
FAIR VALUE MEASUREMENT

NOTE 6 – FAIR VALUE MEASUREMENT

 

On February 8, 2024, in connection with the Warrant Exercise and Issuance, the Company estimated the aggregate fair value of the Existing Warrants (see Note 4 - Stockholders’ Equity for details) to be $1,115,334 using the Black-Scholes option pricing model (Level 3 inputs). The following table shows the detail of the valuation assumptions used:

 

   February 8, 2024 
Risk free interest rate   4.20 - 4.28%
Expected term (years)   2.75 - 2.76 
Expected volatility   102%
Expected dividends   0.00%

 

On February 8, 2024, the Company estimated the aggregate issuance date fair value of the derivative liability related to the New Warrants (see Note 4 - Stockholders’ Equity for details) as $2,189,420 using the Black-Scholes option pricing model (Level 3 inputs).

 

 

The following table shows the detail of the valuation assumptions used:

 

   February 8, 2024 
Risk free interest rate   4.12%
Expected term (years)   5.00 
Expected volatility   101%
Expected dividends   0.00%

 

On June 30, 2024, the Company estimated the aggregate fair value of warrants that are accounted for as derivative liabilities to be $4,491,969 using the Black-Scholes option price model (Level 3 inputs) and, accordingly, recognized a loss on the change in fair value of these derivative liabilities of $1,873,930 during the six months ended June 30, 2024. The following table shows the detail of the valuation assumptions used:

 

   June 30, 2024 
Risk free interest rate   4.37 - 4.62%
Expected term (years)   2.36 - 4.61 
Expected volatility   103% - 106%
Expected dividends   0.00%

 

The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the six months ended June 30, 2024:

 

Balance, January 1, 2024 (as restated)  $1,543,953 
Issuance of warrants   2,189,420 
Exercise of warrants   (1,115,334)
Change in fair value of derivative liability   1,873,930 
Balance, June 30, 2024  $4,491,969 

 

Assets and liabilities measured at fair value on a recurring basis are as follows:

 

   Fair value measurements at reporting date using: 
   Quoted prices in active markets for identical liabilities (Level 1)   Significant other observable inputs (Level 2)   Significant unobservable inputs (Level 3)   Total Fair Value 
Assets:                    
Marketable securities as of June 30, 2024  $12,428,218   $-   $-   $12,428,218 
Marketable securities as of December 31, 2023  $10,181,618   $-   $-   $10,181,618 
                     
Liabilities:                    
Marketable securities as of June 30, 2024  $-   $-   $4,491,969   $4,491,969 
Derivative liabilities as of December 31, 2023 (as restated)  $-   $-   $1,543,953   $1,543,953 

 
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Reclassifications

Reclassifications

 

Certain prior period statements of operations, changes in stockholders’ equity and cash flows amounts have been reclassified to conform to the Company’s fiscal 2024 presentation. These reclassifications have no impact on the Company’s previously reported net loss.

 

 
Cash and Cash Equivalents

Cash and Cash Equivalents

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution. The Company maintains deposits in its accounts that hold cash and cash equivalents in excess of the Federal Depository Insurance Corporation (“FDIC”) coverage of $250,000 per banking institution. The Company had deposits in excess of FDIC coverage of $1,964,341 and $604,226 as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, the Company has not experienced losses on this account.

 
Customer and Revenue Concentrations

Customer and Revenue Concentrations

 

All of the Company’s contract service revenue is derived from one customer. Additionally, all of the Company’s product sales revenue is derived from one customer.

 
Accounts Receivable

Accounts Receivable

 

Accounts receivable are carried at their contractual amounts, less an estimate for credit losses. As of June 30, 2024 and 2023, no allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing economic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted.

 
Deferred Revenue

Deferred Revenue

 

As of June 30, 2024 and December 31, 2023, the Company had $80,700 and $0 of deferred revenue, respectively, from contracts with customers. The contract liabilities included in deferred revenue represent payments received from customers for which the Company had not yet satisfied its performance obligation under the contract. The Company expects to satisfy the remaining performance obligations and recognize the revenue related to its deferred revenue balance within the next twelve months. During the six months ended June 30, 2024, no revenues were recognized for performance obligations satisfied in previous periods.

 
Derivative Financial Instruments

Derivative Financial Instruments

 

The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and is measured using inputs in one of the following three categories:

 

Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

 

 

Level 2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

 

Level 3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

  

The Company considers cash and cash equivalents, investments held in marketable securities, accounts receivable, accounts payable and derivative liabilities to meet the definition of financial instruments. As of June 30, 2024 and December 31, 2023, the carrying amount of cash and cash equivalents, investments held in marketable securities, accounts receivable, and accounts payable approximate their fair value due to the relatively short period of time between their origination and their expected realization or payment. The warrants classified as derivative liabilities are measured at fair value (see Note 6 – Fair Value Measurement for additional details).

 
Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company recognizes revenue primarily from the following different types of contracts:

 

  ● Product sales - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance obligation.

 

  ● Royalty revenue - Revenue is recognized as a usage-based royalty from customers’ usage of intellectual property pursuant to a license agreement at the point in time in which the underlying sale occurs.

 

The Company recognizes bill-and-hold revenue from its sale of cosmetic vials warehoused at a Company location for a specified period of time in accordance with directions received from the Company’s customer. Even though the vials are held at a Company location, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in a bill-and-hold arrangement when: (i) customer acceptance specifications have been met, (ii) legal title has transferred, (iii) the customer has a present obligation to pay for the product and (iv) the risks and rewards of ownership have transferred to the customer. Additionally, all the following bill-and-hold criteria have to be met in order for control to be transferred to the customer:

 

●the reason for the bill-and-hold arrangement is substantive
●the customer has requested the product be warehoused
●the product has been identified as separately belonging to the customer
●the product is currently ready for physical transfer to the customer
●the Company does not have the ability to use the product or direct it to another customer.

 

 

The following table summarizes the Company’s revenue recognized in its unaudited condensed consolidated statements of operations:

 

   2024   2023   2024   2023 
   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Product revenue  $69,300   $-   $69,300   $- 
Royalty revenue   19,800    64,500    54,800    95,800 
Revenues  $89,100   $64,500   $124,100   $95,800 

 
Net Loss Per Common Share

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 outstanding options and warrants are considered potential common stock. The Company has 1,201,580 shares held in abeyance included in basic loss per share given that they are issuable for no additional consideration (see Note 4 – Stockholders’ Equity for additional details). The dilutive effect, if any, of stock options and warrants are calculated using the treasury stock method. All outstanding convertible preferred stock is considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, options, warrants, restricted stock units (“RSUs”) and convertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three and six months ended June 30, 2024 and 2023.

 

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 or conversion price could be less than the average market price of the common shares:

 

   For the Three and Six Months Ended 
   June 30, 
   2024   2023 
Stock options   3,401,608    1,466,890 
Warrants   3,952,511    4,791,072 
Unvested RSUs   -    97,827 
Convertible Preferred Stock   1,398,158    1,398,158 
    8,752,277    7,753,947 

 
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segments Disclosures (Topic 280), which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant (“ASU 2023-07”) segment expenses on both an annual and interim basis. The guidance becomes effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Since this new ASU addresses only disclosures, the Company does not expect the adoption of this ASU to have any material effects on its financial condition, results of operations or cash flows. The Company is currently evaluating any new disclosures that may be required upon adoption of ASU 2023-07.

 

 

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU 2023-09”). The amendments in ASU 2023-09 are designed to enhance the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
SCHEDULE OF REVENUE RECOGNIZED

 

   2024   2023   2024   2023 
   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Product revenue  $69,300   $-   $69,300   $- 
Royalty revenue   19,800    64,500    54,800    95,800 
Revenues  $89,100   $64,500   $124,100   $95,800 
SCHEDULE OF WEIGHTED AVERAGE DILUTIVE COMMON SHARES

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 or conversion price could be less than the average market price of the common shares:

 

   For the Three and Six Months Ended 
   June 30, 
   2024   2023 
Stock options   3,401,608    1,466,890 
Warrants   3,952,511    4,791,072 
Unvested RSUs   -    97,827 
Convertible Preferred Stock   1,398,158    1,398,158 
    8,752,277    7,753,947 
v3.24.2.u1
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)
 6 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of:

  

   June 30,   December 31, 
   2024   2023 
Accrued bonuses  $389,500   $638,000 
Accrued general and administrative expenses   58,122    73,686 
Total accrued expenses and other current liabilities  $447,622   $711,686 
v3.24.2.u1
STOCKHOLDERS’ EQUITY (Tables)
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
SCHEDULE OF WARRANT ACTIVITY

A summary of the Company’s warrant activity and related information follows:

  

           Weighted 
       Weighted   Average 
       Average   Remaining 
   Number of   Exercise   Life 
   Warrants   Price   In Years 
Outstanding, January 1, 2024   4,791,019   $10.57      
Granted   2,513,686    2.43      
Exercised   (3,351,580)   2.33      
Expired   (614)   3,136.85      
Outstanding, June 30, 2024   3,952,511   $3.85    3.8 
                
Exercisable, June 30, 2024   3,952,511   $3.85    3.8 
SCHEDULE OF STOCK OPTION GRANTED ASSUMPTIONS

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

  

   For the Six Months Ended 
   June 30, 
   2024   2023 
Risk free interest rate   4.14 - 4.30%    4.22%
Expected term (years)   2.77 - 5.27    3.5 
Expected volatility   101 - 102%    175%
Expected dividends   0.00%   0.00%
SCHEDULE OF STOCK OPTION ACTIVITY

A summary of the stock option activity during the six months ended June 30, 2024 is presented below:

 

           Weighted     
       Weighted   Average     
       Average   Remaining     
   Number of   Exercise   Life   Intrinsic 
   Options   Price   In Years   Value 
Outstanding, January 1, 2024   1,466,892   $4.11                    
Granted   1,934,716    1.45           
Exercised   -    -           
Forfeited   -    -           
Outstanding, June 30, 2024   3,401,608   $2.60    8.0   $- 
                     
Exercisable, June 30, 2024   2,189,947   $3.12    7.6   $- 
SCHEDULE OF UNVESTED RESTRICTED STOCK UNITS

A summary of the Company’s unvested RSUs as of June 30, 2024 is as follows:

 

   Number of Shares 
Non-vested at January 1, 2024   97,827 
Granted   - 
Vested   (97,827)
Forfeited   - 
Non-vested at June 30, 2024   - 
SCHEDULE OF STOCK OPTION EXPENSE

The following table presents information related to stock-based compensation expense:

 

            Weighted Average  
  

For the Three Months Ended

June 30,

  

For the Six Months Ended

June 30,

  

Unrecognized at

June 30,

  

Remaining

Amortization Period

 
   2024   2023   2024   2023   2024   (Years) 
General and administrative  $324,322   $1,485,668   $2,352,696   $4,864,166   $1,344,375    1.86 
Total  $324,322   $1,485,668   $2,352,696   $4,864,166   $1,344,375    1.86 
SCHEDULE OF STOCK COMPENSATION BY AWARD TYPE

The following table presents stock-based compensation by award type:

 

SCHEDULE OF STOCK COMPENSATION BY AWARD TYPE

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2024   2023   2024   2023 
Options  $324,322   $321,534   $1,367,658   $2,511,962 
RSUs   -    1,164,134    985,038    2,352,204 
Total  $324,322   $1,485,668   $2,352,696   $4,864,166 
v3.24.2.u1
LEASES (Tables)
 6 Months Ended
Jun. 30, 2024
Leases  
SCHEDULE OF NET LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION

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

 

   2024   2023 
   For the Six Months Ended 
   June 30, 
   2024   2023 
Lease Costs          
Operating lease cost (cost resulting from lease payments)  $86,530   $84,014 
Net lease costs  $86,530   $84,014 
           
Operating lease - operating cash flows (fixed payments)  $86,530   $84,014 
Operating lease - operating cash flows (liability reduction)  $78,737   $67,585 
Non-current leases - right of use assets  $78,146   $183,738 
Current liabilities - operating lease liabilities  $83,580   $150,480 
Non-current liabilities - operating lease liabilities  $-   $83,580 
SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER NON-CANCELABLE LEASES FOR OPERATING LEASES

Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases as of June 30, 2024:

 

Fiscal Year  Operating Leases 
2024  $86,530 
Total future minimum lease payments   86,530 
Amount representing interest   (2,950)
Present value of net future minimum lease payments  $83,580 
v3.24.2.u1
FAIR VALUE MEASUREMENT (Tables)
 6 Months Ended
Jun. 30, 2024
Investments, All Other Investments [Abstract]  
SCHEDULE OF FAIR VALUE VALUATION ASSUMPTIONS

   February 8, 2024 
Risk free interest rate   4.20 - 4.28%
Expected term (years)   2.75 - 2.76 
Expected volatility   102%
Expected dividends   0.00%

The following table shows the detail of the valuation assumptions used:

 

   February 8, 2024 
Risk free interest rate   4.12%
Expected term (years)   5.00 
Expected volatility   101%
Expected dividends   0.00%
  
   June 30, 2024 
Risk free interest rate   4.37 - 4.62%
Expected term (years)   2.36 - 4.61 
Expected volatility   103% - 106%
Expected dividends   0.00%
 
SCHEDULE OF FAIR VALUE MEASURED ON RECURRING BASIS

The following table sets forth a summary of the changes in the fair value of Level 3 liabilities that are measured at fair value on a recurring basis during the six months ended June 30, 2024:

 

Balance, January 1, 2024 (as restated)  $1,543,953 
Issuance of warrants   2,189,420 
Exercise of warrants   (1,115,334)
Change in fair value of derivative liability   1,873,930 
Balance, June 30, 2024  $4,491,969 
SCHEDULE OF FAIR VALUE RECURRING BASIS

 

   Fair value measurements at reporting date using: 
   Quoted prices in active markets for identical liabilities (Level 1)   Significant other observable inputs (Level 2)   Significant unobservable inputs (Level 3)   Total Fair Value 
Assets:                    
Marketable securities as of June 30, 2024  $12,428,218   $-   $-   $12,428,218 
Marketable securities as of December 31, 2023  $10,181,618   $-   $-   $10,181,618 
                     
Liabilities:                    
Marketable securities as of June 30, 2024  $-   $-   $4,491,969   $4,491,969 
Derivative liabilities as of December 31, 2023 (as restated)  $-   $-   $1,543,953   $1,543,953 
v3.24.2.u1
BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]            
Net Income (Loss) Attributable to Parent $ (4,028,562) $ (2,223,255) $ (5,709,399) $ (7,172,572) $ (6,251,817) $ (12,881,971)
Net Cash Provided by (Used in) Operating Activities         (4,182,945) $ (3,662,831)
Working capital $ 9,700,000       9,700,000  
Proceeds from warrant exercise         $ 7,500,000  
v3.24.2.u1
SCHEDULE OF REVENUE RECOGNIZED (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Product Information [Line Items]        
Revenues $ 89,100 $ 64,500 $ 124,100 $ 95,800
Product [Member]        
Product Information [Line Items]        
Revenues 69,300 69,300
Royalty [Member]        
Product Information [Line Items]        
Revenues $ 19,800 $ 64,500 $ 54,800 $ 95,800
v3.24.2.u1
SCHEDULE OF WEIGHTED AVERAGE DILUTIVE COMMON SHARES (Details) - shares
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 8,752,277 7,753,947
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 3,401,608 1,466,890
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 3,952,511 4,791,072
Restricted Stock Units (RSUs) [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 97,827
Convertible Preferred Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 1,398,158 1,398,158
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Accounting Policies [Abstract]      
FDIC insured limit $ 250,000    
FDIC amount 1,964,341   $ 604,226
Deferred revenue 80,700  
Revenues recognized $ 0    
Shares held in abeyance 1,201,580 1,201,580  
v3.24.2.u1
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Payables and Accruals [Abstract]    
Accrued bonuses $ 389,500 $ 638,000
Accrued general and administrative expenses 58,122 73,686
Total accrued expenses and other current liabilities $ 447,622 $ 711,686
v3.24.2.u1
SCHEDULE OF WARRANT ACTIVITY (Details) - Warrant [Member]
 6 Months Ended
Jun. 30, 2024
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of Warrants, Outstanding Beginning | shares 4,791,019
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares $ 10.57
Number of Warrants, Granted | shares 2,513,686
Weighted Average Exercise Price, Granted | $ / shares $ 2.43
Number of Warrants, Exercised | shares (3,351,580)
Weighted Average Exercise Price, Exercised | $ / shares $ 2.33
Number of Warrants, Expired | shares (614)
Weighted Average Exercise Price, Expired | $ / shares $ 3,136.85
Number of Warrants, Outstanding Ending | shares 3,952,511
Weighted Average Exercise Price, Outstanding ending balance | $ / shares $ 3.85
Weighted Average Remaining Life In Years, Outstanding 3 years 9 months 18 days
Number of Warrants, Exercisable Ending | shares 3,952,511
Weighted Average Exercise Price, Exercisable | $ / shares $ 3.85
Weighted Average Remaining Life In Years, Exercisable 3 years 9 months 18 days
v3.24.2.u1
SCHEDULE OF STOCK OPTION GRANTED ASSUMPTIONS (Details) - Equity Option [Member]
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Offsetting Assets [Line Items]    
Risk free interest rate   4.22%
Expected term (years)   3 years 6 months
Expected volatility   175.00%
Expected dividends 0.00% 0.00%
Minimum [Member]    
Offsetting Assets [Line Items]    
Risk free interest rate 4.14%  
Expected term (years) 2 years 9 months 7 days  
Expected volatility 101.00%  
Maximum [Member]    
Offsetting Assets [Line Items]    
Risk free interest rate 4.30%  
Expected term (years) 5 years 3 months 7 days  
Expected volatility 102.00%  
v3.24.2.u1
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Equity [Abstract]      
Number of Options, Outstanding beginning     1,466,892
Weighted Average Exercise Price, Outstanding Beginning     $ 4.11
Number of Options, Granted 0 0 1,934,716
Weighted Average Exercise Price, Granted     $ 1.45
Number of Options, Exercised    
Weighted Average Exercise Price, Exercised    
Number of Options, Forfeited    
Weighted Average Exercise Price, Forfeited    
Number of Options, Outstanding ending 3,401,608   3,401,608
Weighted Average Exercise Price, Outstanding Ending $ 2.60   $ 2.60
Weighted Average Remaining Life in Years Outstanding Ending     8 years
Intrinsic Value, Outstanding Ending  
Number of Options, Exercisable Ending 2,189,947   2,189,947
Weighted Average Exercise Price Exercisable Ending $ 3.12   $ 3.12
Weighted Average Remaining Life in Years Exercisable Ending     7 years 7 months 6 days
Intrinsic Value, Outstanding Ending  
v3.24.2.u1
SCHEDULE OF UNVESTED RESTRICTED STOCK UNITS (Details) - Restricted Stock Units (RSUs) [Member]
 6 Months Ended
Jun. 30, 2024
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of shares outstanding beginning 97,827
Number of shares granted
Number of shares vested (97,827)
Number of shares forfeited
Number of shares outstanding ending
v3.24.2.u1
SCHEDULE OF STOCK OPTION EXPENSE (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Stock-based compensation expense $ 324,322 $ 1,485,668 $ 2,352,696 $ 4,864,166
Unrecognized expense 1,344,375   $ 1,344,375  
Weighted average remaining amortization period (years)     1 year 10 months 9 days  
Share-Based Payment Arrangement, Option [Member]        
Stock-based compensation expense 324,322 321,534 $ 1,367,658 2,511,962
General and Administrative Expense [Member] | Share-Based Payment Arrangement, Option [Member]        
Stock-based compensation expense 324,322 $ 1,485,668 2,352,696 $ 4,864,166
Unrecognized expense $ 1,344,375   $ 1,344,375  
Weighted average remaining amortization period (years)     1 year 10 months 9 days  
v3.24.2.u1
SCHEDULE OF STOCK COMPENSATION BY AWARD TYPE (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Stock-based compensation award $ 324,322 $ 1,485,668 $ 2,352,696 $ 4,864,166
Share-Based Payment Arrangement, Option [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Stock-based compensation award 324,322 321,534 1,367,658 2,511,962
Restricted Stock Units (RSUs) [Member]        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Stock-based compensation award $ 1,164,134 $ 985,038 $ 2,352,204
v3.24.2.u1
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Feb. 13, 2024
Feb. 06, 2024
Feb. 05, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Warrants exercisable               3,351,580
Proceeds from issuance of warrants           $ 2,189,420    
Issuance costs           $ 595,364    
Shares held in abeyance       1,201,580   1,201,580   1,201,580
Stock issued during period value new issues         $ 411,710      
Gain on exchange of warrants       $ 1,711,698  
Warrants exercisable and outstanding       $ 0   $ 0    
Stock options granted       0 0 1,934,716    
Equity Option [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Grant options shares $ 2,140,000              
Weighted average grant date fair value of stock options granted           $ 1.11 $ 2.77  
Equity Option [Member] | Monthly Over One Year [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Purchase of common shares 513,663              
Equity Option [Member] | Quarterly Over Two Years [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Purchase of common shares 1,421,053              
Purchase of common shares 50.00%              
Employees [Member] | Equity Option [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Purchase of common shares 1,934,716              
Exercise price $ 1.45              
Existing Warrants [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Warrants exercisable   3,351,580   3,351,580   3,351,580    
New Warrants [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Exercise price   $ 2.33            
Proceeds from issuance of warrants   $ 8,100,000       $ 314,211    
Issuance costs   $ 595,364            
New Warrants [Member] | Investor [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Issuance costs           595,364    
Stock issued during period value warrants           2,189,420    
Gain on exchange of warrants           $ 1,711,698    
New Warrants [Member] | Private Placement [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Warrants exercisable   2,513,686            
Exercise price   $ 2.43            
Warrants for cash and the payment   $ 0.125            
Common Stock [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Warrants exercisable       2,150,000   2,150,000   2,150,000
Stock issued during period shares new issues         93,551      
Stock issued during period value new issues         $ 9      
Warrant [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Shares held in abeyance   1,201,580            
Warrant [Member] | Roth Capital Partners LLC [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Issuance costs     $ 528,000     $ 595,364    
Existing Warrant [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Proceeds from issuance of warrants           7,809,181    
Existing Warrant [Member] | Investor [Member]                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Proceeds from issuance of warrants           8,123,392    
Fair value of adjustment           $ 1,115,334    
Stock issued during period shares new issues           3,351,580    
Stock issued during period value new issues           $ 4,742,244    
v3.24.2.u1
SCHEDULE OF NET LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION (Details) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Leases      
Operating lease cost (cost resulting from lease payments) $ 86,530 $ 84,014  
Net lease costs 86,530 84,014  
Operating lease - operating cash flows (fixed payments) 86,530 84,014  
Operating lease - operating cash flows (liability reduction) 78,737 67,585  
Non-current leases - right of use assets 78,146 183,738 $ 151,447
Current liabilities - operating lease liabilities 83,580 150,480 $ 162,317
Non-current liabilities - operating lease liabilities $ 83,580  
v3.24.2.u1
SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER NON-CANCELABLE LEASES FOR OPERATING LEASES (Details)
Jun. 30, 2024
USD ($)
Leases  
2024 $ 86,530
Total future minimum lease payments 86,530
Amount representing interest (2,950)
Present value of net future minimum lease payments $ 83,580
v3.24.2.u1
LEASES (Details Narrative)
 1 Months Ended 6 Months Ended
Jun. 30, 2019
USD ($)
Jun. 30, 2024
USD ($)
ft²
Weighted average incremental borrowing rate   12.00%
Melville Lease [Member]    
Area of land | ft²   6,800
Lease extension description 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.  
Melville Lease [Member] | Minimum [Member]    
Rent expense $ 153,748 $ 132,600
Melville Lease [Member] | Maximum [Member]    
Rent expense $ 173,060 $ 149,260
v3.24.2.u1
SCHEDULE OF FAIR VALUE VALUATION ASSUMPTIONS (Details)
 6 Months Ended
Feb. 08, 2024
Jun. 30, 2024
Measurement Input, Risk Free Interest Rate [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Risk free interest rate 4.20% 4.37%
Risk free interest rate 4.28% 4.62%
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Risk free interest rate 4.12%  
Measurement Input, Expected Term [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected term (years) 5 years  
Measurement Input, Expected Term [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected term (years) 2 years 9 months 2 years 4 months 9 days
Measurement Input, Expected Term [Member] | Minimum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected term (years) 2 years 9 months 3 days 4 years 7 months 9 days
Measurement Input, Price Volatility [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected volatility 102.00% 106.00%
Measurement Input, Price Volatility [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected volatility 101.00%  
Measurement Input, Price Volatility [Member] | Minimum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected volatility   103.00%
Measurement Input, Expected Dividend Rate [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected dividends 0.00% 0.00%
Measurement Input, Expected Dividend Rate [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected dividends 0.00%  
v3.24.2.u1
SCHEDULE OF FAIR VALUE MEASURED ON RECURRING BASIS (Details) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Investments, All Other Investments [Abstract]    
Balance, January 1, 2024 $ 1,543,953  
Issuance of warrants 2,189,420  
Exercise of warrants (1,115,334)  
Change in fair value of derivative liability 1,873,930 $ 4,217,197
Balance, June 30, 2024 $ 4,491,969  
v3.24.2.u1
SCHEDULE OF FAIR VALUE RECURRING BASIS (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Platform Operator, Crypto Asset [Line Items]    
Derivative liabilities as of June 30, 2024 $ 12,428,218 $ 10,181,618
Marketable securities 12,428,218 10,181,618
Derivative liabilities as of December 31, 2023
Derivative liabilities 4,491,969 1,543,953
Fair Value, Inputs, Level 2 [Member]    
Platform Operator, Crypto Asset [Line Items]    
Derivative liabilities as of June 30, 2024
Derivative liabilities as of December 31, 2023  
Fair Value, Inputs, Level 3 [Member]    
Platform Operator, Crypto Asset [Line Items]    
Derivative liabilities as of June 30, 2024
Derivative liabilities as of December 31, 2023 $ 4,491,969 $ 1,543,953
v3.24.2.u1
FAIR VALUE MEASUREMENT (Details Narrative) - USD ($)
 6 Months Ended
Feb. 08, 2024
Jun. 30, 2024
Derivative liabilities $ 2,189,420  
Black Scholes Option [Member]    
Fair value of adjustment   $ 4,491,969
Fair value of derivative liabilitiy   $ 1,873,930
Existing Warrant [Member] | Black Scholes Option [Member]    
Fair value of adjustment $ 1,115,334  
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