{"url_path":"/sec/brtx/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1505497/0001493152-26-023126-index.html","accession_number":"0001493152-26-023126","cik":"0001505497","ticker":"BRTX","issuer_name":"BioRestorative Therapies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1505497/0001493152-26-023126-index.html","primary_entity_key":"0001505497","primary_entity_name":"BioRestorative Therapies, Inc."},"word_count":7285,"has_tables":true,"body_markdown":"**Item\n1. Financial Statements**\n\n \n\n**BIORESTORATIVE\nTHERAPIES, INC.**\n\n**CONDENSED\nCONSOLIDATED BALANCE SHEETS**\n\n \n\n  \nMarch 31,  \nDecember 31, \n\n  \n2026  \n2025 \n\n  \n(unaudited)  \n  \n\nAssets \n    \n   \n\n  \n    \n   \n\nCurrent Assets: \n    \n   \n\nCash and cash equivalents \n$3,112,679  \n$1,511,188 \n\nInvestments held in marketable securities \n 479,351  \n 1,441,734 \n\nAccounts receivable \n 13,300  \n 15,500 \n\nPrepaid expenses and other current assets \n 194,378  \n 168,440 \n\nTotal Current Assets \n 3,799,708  \n 3,136,862 \n\nDeferred offering costs \n -  \n 49,808 \n\nProperty and equipment, net \n 328,810  \n 358,767 \n\nIntangible assets, net \n 511,761  \n 534,198 \n\nTotal Assets \n$4,640,279  \n$4,079,635 \n\n  \n    \n   \n\nLiabilities and Stockholders’ Equity \n    \n   \n\n  \n    \n   \n\nCurrent Liabilities: \n    \n   \n\nAccounts payable \n$666,898  \n$1,341,495 \n\nAccrued expenses and other current liabilities \n 947,739  \n 982,047 \n\nWarrant liabilities \n -  \n 1,399,349 \n\nTotal Current Liabilities \n 1,614,637  \n 3,722,891 \n\n  \n    \n   \n\nCommitments and contingencies \n    \n - \n\n  \n    \n   \n\nStockholders’ Equity: \n    \n   \n\nPreferred stock, $0.01 par value; 20,000,000 shares authorized; Series B Convertible Preferred Stock;\n1,543,158 shares designated, 0 and 1,398,158 shares issued and outstanding at March 31, 2026 and December 31, 2025,\nrespectively \n -  \n 13,982 \n\nCommon stock, $0.0001 par value; 75,000,000 shares authorized; 25,478,170 and 8,876,242\nshares issued and outstanding at March 31, 2026 and December 31, 2025, respectively \n 2,548  \n 887 \n\nAdditional paid-in capital \n 175,098,189  \n 170,262,565 \n\nAccumulated deficit \n (172,075,095) \n (169,920,690)\n\nTotal Stockholders’ Equity \n 3,025,642  \n 356,744 \n\nTotal Liabilities and Stockholders’ Equity \n$4,640,279  \n$4,079,635 \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n3\n\n \n\n \n\n**BIORESTORATIVE THERAPIES, INC.**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF\nOPERATIONS**\n\n**(unaudited)**\n\n \n\n  \n    \n   \n\n  \nFor the Three Months Ended \n\n  \nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nRevenues \n$23,170  \n$25,000 \n\nCost of goods sold \n 7,385  \n 2,909 \n\nGross profit \n 15,785  \n 22,091 \n\n  \n    \n   \n\nOperating Expenses: \n    \n   \n\nResearch and development \n 1,926,311  \n 2,646,900 \n\nGeneral and administrative \n 1,475,207  \n 2,182,725 \n\nTotal Operating Expenses \n 3,401,518  \n 4,829,625 \n\nLoss From Operations \n (3,385,733) \n (4,807,534)\n\nOther Income (Expense): \n    \n   \n\nDividend and interest income, net \n 5,479  \n 100,608 \n\nOther income \n 5,728  \n 1,246 \n\nChange in fair value of warrant liabilities \n 1,220,121  \n (634,119)\n\nTotal Other Income (Expense) \n 1,231,328  \n (532,265)\n\nNet Loss \n$(2,154,405) \n$(5,339,799)\n\n  \n    \n   \n\nNet Loss Per Share - Basic and Diluted \n$(0.12) \n$(0.64)\n\n  \n    \n   \n\nWeighted Average Common Shares Outstanding - Basic and\nDiluted \n 17,727,747  \n 8,357,143 \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n4\n\n \n\n \n\n**BIORESTORATIVE THERAPIES, INC.**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’\nEQUITY**\n\n**(unaudited)**\n\n \n\n  \nShares  \nAmount  \nShares  \nAmount  \nCapital  \nDeficit  \nTotal \n\n  \nFor the Three Months Ended March 31, 2026 \n\n  \nSeries B Convertible  \n   \n   \nAdditional  \n   \n  \n\n  \nPreferred Stock  \nCommon Stock  \nPaid-In  \nAccumulated  \n  \n\n  \nShares  \nAmount  \nShares  \nAmount  \nCapital  \nDeficit  \nTotal \n\n  \n   \n   \n   \n   \n   \n   \n  \n\nBalance - January 1, 2026 \n 1,398,158  \n$13,982  \n 8,876,242  \n$887  \n$170,262,565  \n$(169,920,690) \n$356,744 \n\nConversion of Series B Preferred Stock into common stock \n (1,398,158) \n (13,982) \n 1,398,158  \n 140  \n 13,842  \n -  \n - \n\nIssuance and sale of common stock, net of issuance costs [1] \n -  \n -  \n 12,560,715  \n 1,256  \n 4,352,431  \n -  \n 4,353,687 \n\nExercise of pre-funded warrants [1] \n -  \n -  \n 1,725,000  \n 173  \n -  \n -  \n 173 \n\nCommon stock issued in connection with abeyance shares \n -  \n -  \n 918,055  \n 92  \n (92) \n -  \n - \n\nReclassification of warrant liabilities to equity [2] \n -  \n -  \n -  \n -  \n 179,228  \n -  \n 179,228 \n\nStock-based compensation: \n    \n    \n    \n    \n    \n    \n   \n\nOptions \n -  \n -  \n -  \n -  \n 290,215  \n -  \n 290,215 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n (2,154,405) \n (2,154,405)\n\nBalance - March 31, 2026 \n -  \n$-  \n 25,478,170  \n$2,548  \n$175,098,189  \n$(172,075,095) \n$3,025,642 \n\n \n\n  \nFor the Three Months Ended March 31, 2025 \n\n  \nSeries B Convertible  \n   \n   \nAdditional  \n   \n  \n\n  \nPreferred Stock  \nCommon Stock  \nPaid-In  \nAccumulated  \n  \n\n  \nShares  \nAmount  \nShares  \nAmount  \nCapital  \nDeficit  \nTotal \n\n  \n   \n   \n   \n   \n   \n   \n  \n\nBalance - January 1, 2025 \n 1,398,158  \n$13,982  \n 6,919,919  \n$692  \n$164,195,434  \n$(155,678,715) \n$8,531,393 \n\nExercise of stock options \n -  \n -  \n 29,249  \n 3  \n 42,408  \n -  \n 42,411 \n\nIssuance and sale of common stock, net of issuance costs [3] \n -  \n -  \n 492,087  \n 49  \n 901,561  \n -  \n 901,610 \n\nCommon stock issued in connection with abeyance shares \n -  \n -  \n 63,525  \n 6  \n (6) \n -  \n - \n\nStock-based compensation: \n    \n    \n    \n    \n    \n    \n   \n\nOptions \n -  \n -  \n -  \n -  \n 2,009,126  \n -  \n 2,009,126 \n\nNet loss \n -  \n -  \n -  \n -  \n -  \n (5,339,799) \n (5,339,799)\n\nBalance - March 31, 2025 \n 1,398,158  \n$13,982  \n 7,504,780  \n$750  \n$167,148,523  \n$(161,018,514) \n$6,144,741 \n\n \n\n[1]Represents the\ngross proceeds of $5,000,000, less issuance costs of $646,140, resulting in net proceeds of $4,353,860. See Note 4 - Stockholders’\nEquity - Rodman Offering for additional details.\n\n \n\n[2]On February 24,\n2026, upon the conversion in full of the Company’s Series B Convertible Preferred Stock, the Company reassessed and concluded that\nwarrants previously classified as derivative liabilities met the criteria for equity classification under ASC 815-40. The warrants were\nremeasured to fair value on that date and reclassified from warrant liabilities to additional paid-in capital. See Note 4 — Stockholders’\nEquity for additional details.\n\n \n\n[3]Represents the\ngross proceeds of $1,083,915, less issuance costs of $182,305, resulting in net proceeds of $901,610. See Note 4 - Stockholders’\nEquity - ATM Sales for additional details.\n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n5\n\n \n\n \n\n**BIORESTORATIVE\nTHERAPIES, INC.**\n\n**CONDENSED\nCONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n**(unaudited)**\n\n \n\n  \n    \n   \n\n  \nFor the Three Months Ended \n\n  \nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nCash Flows From Operating Activities: \n    \n   \n\nNet loss \n$(2,154,405) \n$(5,339,799)\n\nAdjustments to reconcile net loss to net cash used in operating activities: \n    \n   \n\nDepreciation and amortization \n 52,394  \n 51,781 \n\nDividend and interest income \n (6,064) \n (102,799)\n\nStock-based compensation \n 290,215  \n 2,009,126 \n\nChange in fair value of warrant liabilities \n (1,220,121) \n 634,119 \n\nChanges in operating assets and liabilities: \n    \n   \n\nAccounts receivable \n 2,200  \n 163,400 \n\nPrepaid expenses and other current assets \n (25,938) \n 5,830 \n\nAccounts payable \n (682,003) \n 116,431 \n\nAccrued expenses and other current liabilities \n (64,070) \n (466,875)\n\nDeferred revenue \n -  \n 150,000 \n\nNet Cash Used In Operating Activities \n (3,807,792) \n (2,778,786)\n\nCash Flows From Investing Activities: \n    \n   \n\nSale of marketable securities \n 1,043,367  \n 3,456,535 \n\nPurchase of marketable securities \n (74,920) \n (1,053,168)\n\nPurchases of equipment \n -  \n (36,400)\n\nNet Cash Provided By Investing Activities \n 968,447  \n 2,366,967 \n\nCash Flows From Financing Activities: \n    \n   \n\nProceeds from issuance of common stock in at-the-market offering \n -  \n 1,083,915 \n\nProceeds from issuance of common stock and pre-funded warrants in registered direct offering \n 5,000,000  \n - \n\nPayment of issuance costs \n (559,164) \n (33,608)\n\nExercise of stock options \n -  \n 42,411 \n\nNet Cash Provided By Financing Activities \n 4,440,836  \n 1,092,718 \n\nNet Increase In Cash and Cash Equivalents \n 1,601,491  \n 680,899 \n\nCash and Cash Equivalents - Beginning of the Period \n 1,511,188  \n 547,890 \n\nCash and Cash Equivalents - End of the Period \n$3,112,679  \n$1,228,789 \n\n  \n    \n   \n\nSupplemental Disclosures of Cash Flow Information: \n    \n   \n\nCash paid during the period for: \n    \n   \n\nInterest \n$983  \n$- \n\nIncome taxes \n$- \n$- \n\n  \n    \n   \n\nNon-cash investing and financing activities: \n    \n   \n\nConversion of Series B Convertible Preferred Stock into Common Stock \n$13,982  \n$- \n\nIssuance of common stock held in abeyance \n$92  \n$6 \n\nReclassification of deferred offering costs to equity \n$49,808  \n$148,697 \n\nIssuance costs included in accounts payable \n$7,406  \n$- \n\nIssuance costs included in accrued expenses \n$29,762  \n$- \n\nReclassification of warrant liabilities to equity \n$179,228  \n$- \n\n \n\nThe accompanying notes are an integral part of these unaudited condensed consolidated financial statements.\n\n \n\n6\n\n \n\n** **\n\n**BIORESTORATIVE\nTHERAPIES, INC.**\n\n**NOTES\nTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**\n\n**(Unaudited)**\n\n** **\n\nNOTE\n1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS, BASIS OF PRESENTATION AND LIQUIDITY\n\n \n\n*Corporate\nHistory*\n\n \n\nBioRestorative\nTherapies, Inc. has one wholly-owned subsidiary, Stem Pearls, LLC (“Stem Pearls”). BioRestorative Therapies, Inc. and its\nsubsidiary are referred to collectively as “BRT” or the “Company”.\n\n \n\nOn\nDecember 23, 2022, the Company reincorporated from Delaware to Nevada by filing Articles of Incorporation with the state of Nevada. The\nreincorporation was structured as a statutory merger.\n\n \n\n*Business\nOperations*\n\n* *\n\nBRT\ndevelops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells. BRT’s\nwebsite is at www.biorestorative.com. The information contained in the website or connected thereto is not intended to be incorporated\nby reference into this Quarterly Report. BRT is currently developing a Disc/Spine Program referred to as “brtxDISC”. Its\nlead cell therapy candidate, *BRTX-100*, is a product formulated from autologous (or a person’s own) cultured mesenchymal\nstem cells collected from the patient’s bone marrow. The product is intended to be used for the non-surgical treatment of painful\nlumbosacral disc disorders or as a complimentary therapeutic to a surgical procedure. BRT is also engaging in research efforts with respect\nto a platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other metabolic\ndisorders and has labeled this initiative its ThermoStem Program. In addition, in continuation of BRT’s mission of developing and\ncommercializing cell-based biologics, BRT has developed a biologics-based cosmetic products business through which it formulates, manufactures\nand sells products designed for cosmetic and aesthetic uses. The Company’s biocosmeceutical product offerings consist of two product\nlines: ExoCR, which is sold pursuant to a supply agreement with Cartessa Aesthetics, LLC, and BioX, which the Company commenced selling\ncommercially during the three months ended March 31, 2026 to multiple customers in the ordinary course of business. Further, BRT has\nlicensed a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or material\nto the spine and discs or other potential sites.\n\n** **\n\n*Basis\nof Presentation*\n\n \n\nThe\naccompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally\naccepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form\n10-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\ncomplete financial statements. The December 31, 2025 consolidated balance sheet data were derived from audited financial statements but\ndo not include all disclosures required by U.S. GAAP. In the opinion of management, such statements include all adjustments (consisting\nonly of normal recurring items) that are considered necessary for a fair presentation of the unaudited condensed consolidated financial\nstatements of the Company as of March 31, 2026 and for the three months then ended. The results of operations for the three months ended\nMarch 31, 2026 are not necessarily indicative of the operating results for the full year ending December 31, 2026 or any other period.\nThese unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements\nand related disclosures of the Company as of December 31, 2025 and for the year then ended, which were filed with the Securities and\nExchange Commission (“SEC”) on March 26, 2026 (the “Form 10-K”).\n\n \n\n7\n\n \n\n \n\n*Liquidity*\n\n \n\nThe\naccompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as\na going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business. For the three\nmonths ended March 31, 2026, the Company had a net loss of $2.2 million, and negative cash flows from operations of $3.8 million, and\nas of March 31, 2026, the Company had working capital of $2.2 million. The Company anticipates that it will continue to incur net losses\nand negative cash flows from operations as it executes its development plans during 2026 and beyond, as well as other potential strategic\nand business development initiatives. These conditions raise substantial doubt about the Company’s ability to continue as a going\nconcern for at least twelve months after the issuance date of these financial statements.\n\n \n\nThe\nCompany has previously funded, and plans to continue funding, these losses primarily through current cash on hand, investments in marketable\nsecurities and additional infusions of cash from equity and debt financing. During the three months ended March 31, 2026, the Company\nsold 12,560,715 shares of its Common Stock, pre-funded warrants to purchase 1,725,000 shares of its common stock (which have been exercised\nin full) and warrants for the purchase of 14,285,715 shares of its Common Stock in a public offering. The Company received net proceeds\nof approximately $4.4 million from the offering.\n\n \n\nThe\nCompany’s current funds will not be sufficient to enable the Company to fully complete its development activities or attain profitable\noperations. If the Company is unable to obtain such needed additional financing on a timely basis, the Company may have to curtail its\ndevelopment, marketing and promotional activities, which would have a material adverse effect on the Company’s business, financial\ncondition and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate.\n\n \n\nThe\naccompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate\ncontinuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of\nbusiness. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not\nnecessarily purport to represent realizable or settlement values. The accompanying unaudited condensed consolidated financial statements\ndo not include any adjustments that might be necessary should the Company be unable to continue as a going concern.\n\n \n\n*Nasdaq\nListing Requirements*\n\n \n\nOn\nMarch 26, 2026, the Company received a notice from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because\nthe closing bid price for the Company’s shares of Common Stock was less than $1.00 per share for 30 consecutive business days,\nthe Company was no longer in compliance with the minimum bid price requirement for continued listing on Nasdaq under Nasdaq Listing Rule\n5550(a)(2).\n\n \n\nIn\naccordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or\nuntil September 22, 2026, to regain compliance with the minimum bid price requirement. To regain compliance, the Company’s Common\nStock must have a minimum closing bid price of at least $1.00 per share for a minimum of ten consecutive business days during the 180\ncalendar day grace period. If the Company does not regain compliance by September 22, 2026, the Company may be eligible for a second\n180 calendar day grace period, subject to meeting the continued listing requirements (other than the minimum bid price) for the Nasdaq\nCapital Market and providing written notice to Nasdaq of its intention to cure the deficiency, including by effecting a reverse stock\nsplit, if necessary.\n\n \n\n8\n\n \n\n \n\nIf\nthe Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted by\nNasdaq, Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting, which the Company may appeal\nto a Nasdaq Hearings Panel. Delisting from the Nasdaq Capital Market may adversely affect the Company’s ability to raise\nadditional financing through the public or private sale of equity securities, may significantly affect the ability of investors to\ntrade the Company’s securities and may negatively affect the value and liquidity of the Company’s Common Stock.\n\n \n\nThe\nCompany intends to monitor the closing bid price of its Common Stock and consider its available options to resolve the noncompliance\nwith the minimum bid price requirement, including effecting a reverse split of its Common Stock. There can be no assurance that the\nCompany will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with the other\nNasdaq listing criteria.\n\n** **\n\nNOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\n* *\n\n*Reclassifications*\n\n* *\n\nCertain\nprior period statement of operations amounts have been reclassified to conform to the Company’s fiscal 2025 presentation. The\nreclassifications consist of a change in the grouping of certain other income items on the condensed consolidated statements of\noperations. These reclassifications and adjustments were not material to any prior period and had no impact on the Company’s\npreviously reported net loss.\n\n \n\n*Voluntary\nrevision to previously issued financial statements*\n\n \n\nIn\nconnection with the preparation of the Company’s interim condensed consolidated financial statements for the three months\nended March 31, 2026, the Company noted certain stock-based compensation expense were\nnot allocated properly for the prior three months ended March 31, 2025. As a result, the Company has voluntarily revised its\nunaudited condensed consolidated statement of operations for the three months ended March 31, 2025 by reclassifying $932,573\nof stock-based compensation expense from general and administrative expense to research and\ndevelopment expense. The Company appropriately allocated the stock-based compensation expense in its Annual Report on Form 10-K for\nthe year ended December 31, 2025 and for the interim periods ended June 30, 2025 and September 30, 2025. The voluntary revision had\nno effect on the Company’s financial position, results of operations, cash flows or loss per share.\n\n \n\n*Cash\nand Cash Equivalents*\n\n \n\nFinancial\ninstruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution.\nThe Company maintains deposits in its accounts that hold cash and cash equivalents in excess of the Federal Depository Insurance Corporation\n(“FDIC”) coverage of $250,000 per banking institution. The Company had deposits in excess of FDIC coverage of $2,841,774\nand $1,180,853 as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, the Company has not experienced losses\non this account.\n\n \n\n*Investments\nHeld in Marketable Securities*\n\n \n\nAs\nof March 31, 2026 and December 31, 2025, investments held in marketable securities consists of U.S. Treasury securities held in a\ntrust account. The Company’s investments held in the trust account are presented on the unaudited condensed consolidated\nbalance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these\nsecurities are included in dividend and interest income, net in the accompanying unaudited condensed consolidated statements of\noperations. U.S. Treasury notes held in the trust account are short-term in nature and are carried at fair value. As of March 31,\n2026, the Company has not experienced any credit losses or other-than-temporary impairments on these investments\n\n \n\n9\n\n \n\n \n\nThe\nfollowing tables summarize the Company’s investments held in marketable securities:\n\nSCHEDULE OF INVESTMENTS HELD IN\nMARKETABLE SECURITIES  \n\n  \nAs of March 31, 2026 \n\n  \nAmortized Cost  \nGross Unrealized Gains  \nGross Unrealized Losses  \nFair Value \n\nU.S. Treasury notes \n$475,438  \n$476  \n$(429) \n$475,485 \n\nAccrued interest \n -  \n -  \n -  \n 3,866 \n\nInvestments held in marketable securities \n$475,438  \n$476  \n$(429) \n$479,351 \n\n \n\n  \nAs of December 31, 2025 \n\n  \nAmortized Cost  \nGross Unrealized Gains  \nGross Unrealized Losses  \nFair Value \n\nU.S. Treasury notes \n$1,421,503  \n$8,177  \n$-  \n$1,429,680 \n\nAccrued interest \n -  \n -  \n -  \n 12,054 \n\nInvestments held in marketable securities \n$1,421,503  \n$8,177  \n$-  \n$1,441,734 \n\n* *\n\n*Customer\nand Revenue Concentrations*\n\n* *\n\nAll\nof the Company’s royalty revenue is derived from one customer pursuant to a sublicense agreement. The Company’s product sales\nrevenue is generated from two product lines, ExoCR and BioX. ExoCR product sales are made to a single customer, and BioX product sales\nare made to multiple customers in the ordinary course of business.\n\n \n\n*Accounts\nReceivable*\n\n \n\nAccounts\nreceivable are carried at their contractual amounts, less an estimate for credit losses. As of March 31, 2026 and December 31, 2025,\nno allowances for credit losses were determined to be necessary. Management estimates the allowance for credit losses based on existing\neconomic conditions, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered\npast due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance\nfor credit losses only after all collection attempts have been exhausted.\n\n \n\n10\n\n \n\n \n\n*Deferred\nOffering Costs*\n\n \n\nDeferred\noffering costs, which primarily consist of direct, incremental professional fees incurred in connection with a financing, are capitalized\nas non-current assets on the balance sheet. Upon consummation of a financing, the deferred offering costs would be offset against the\noffering proceeds. If the completion of a contemplated financing was no longer probable, the related deferred offering costs would be\ncharged to general and administrative expense in the unaudited condensed consolidated financial statements. The Company had $0 and $49,808\nof deferred offering costs as of March 31, 2026 and December 31, 2025, respectively.\n\n \n\n*Derivative\nFinancial Instruments*\n\n \n\nThe\nCompany evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded\nderivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded\nat its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated\nstatements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes option\npricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments,\nincluding whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.\n\n* *\n\n*Fair\nValue of Financial Instruments*\n\n \n\nFair\nvalue is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction\nbetween market participants at the measurement date and is measured using inputs in one of the following three categories:\n\n \n\nLevel\n1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to\naccess. Valuation of these items does not entail a significant amount of judgment.\n\n \n\nLevel\n2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar\nassets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.\n\n \n\nLevel\n3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value\nof the assets or liabilities.\n\n \n\nThe\nCompany considers cash and cash equivalents, investments held in marketable securities, accounts receivable, accounts payable and warrant\nliabilities to meet the definition of financial instruments. As of March 31, 2026 and December\n31, 2025, the carrying amount of cash and cash equivalents, investments held in marketable securities, accounts receivable, and accounts\npayable approximate their fair value due to the relatively short period of time between their origination and their expected realization\nor payment. The warrant liabilities are measured at fair value (see Note 5 – Fair Value Measurement for additional details).\n\n \n\n11\n\n \n\n* *\n\n*Revenue\nRecognition*\n\n \n\nThe\nCompany recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts\nwith Customers” (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the\ntransfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled\nin 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\nmore judgment and estimates may be required within the revenue recognition process, including identifying performance obligations in\nthe contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price\nto each separate performance obligation. The Company recognizes revenue primarily from the following different types of contracts:\n\n \n\n \n●\n**Product\nsales** - Revenue is recognized at the point in time the customer obtains control of the goods and the Company satisfies its performance\nobligation. The Company’s product sales are generated from two product lines: ExoCR, sold to a single customer pursuant to\na bill-and-hold arrangement as described below, and BioX, sold to multiple customers with control transferring upon shipment.\n\n \n\n \n●\n**Royalty\nrevenue** - Revenue is recognized as a usage-based royalty from customers’ usage of intellectual property pursuant to a license\nagreement at the point in time in which the underlying sale occurs.\n\n \n\nThe\nCompany recognizes bill-and-hold revenue from its sale of ExoCR cosmetic vials warehoused at a Company location for a specified period\nof time in accordance with directions received from the Company’s customer. Even though the vials are held at a Company location,\na sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in\na bill-and-hold arrangement when: (i) customer acceptance specifications have been met, (ii) legal title has transferred, (iii) the customer\nhas a present obligation to pay for the product and (iv) the risks and rewards of ownership have transferred to the customer. Additionally,\nall the following bill-and-hold criteria have to be met in order for control to be transferred to the customer:\n\n \n\n●the\nreason for the bill-and-hold arrangement is substantive\n\n   \n\n●the\ncustomer has requested the product be warehoused\n\n   \n\n●the\nproduct has been identified as separately belonging to the customer\n\n   \n\n●the\nproduct is currently ready for physical transfer to the customer\n\n   \n\n●the\nCompany does not have the ability to use the product or direct it to another customer.\n\n \n\nThe\nfollowing table summarizes the Company’s revenue recognized in its unaudited condensed consolidated statements of operations:\n\nSCHEDULE\nOF REVENUE RECOGNIZED  \n\n  \n2026  \n2025 \n\n  \nFor the Three Months Ended \n\n  \nMarch 31, \n\n  \n2026  \n2025 \n\nProduct revenue \n$11,870  \n$- \n\nRoyalty revenue \n 11,300  \n 25,000 \n\nRevenue \n$23,170  \n$25,000 \n\n \n\n*Net\nLoss Per Common Share*\n\n \n\nNet\nloss per share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the year.\nAll outstanding options and warrants are considered potential Common Stock. For the three months ended March 31, 2026 and 2025, the Company\nhad 0 and 1,138,055 shares of Common Stock respectively, held in abeyance included in basic loss per share given that they were issuable\nfor no additional consideration (see Note 4 – Stockholders’ Equity for additional details). The dilutive effect, if any,\nof stock options and warrants are calculated using the treasury stock method. All outstanding convertible preferred stock is considered\ncommon stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect\nof common stock equivalents is anti-dilutive with respect to losses, options, warrants and\nconvertible preferred stock have been excluded from the Company’s computation of diluted net loss per common share for the three\nmonths ended March 31, 2026 and 2025.\n\n \n\n12\n\n \n\n \n\nThe\nfollowing table summarizes the securities that were excluded from the diluted per share calculation because the effect of including\nthese potential shares was antidilutive due to the Company’s net loss position even though the exercise or conversion price\ncould be less than the average market price of the Common Stock. All outstanding shares of the Company’s Series B Convertible\nPreferred Stock have been converted into Common Stock; therefore, there were no shares of Convertible Preferred Stock presented as\nbeing antidilutive for the three months ended March 31, 2026:\n\nSCHEDULE\nOF WEIGHTED AVERAGE DILUTIVE COMMON SHARES   \n\n  \nFor the Three Months Ended \n\n  \nMarch 31, \n\n  \n2026  \n2025 \n\nStock options \n 5,213,390  \n 5,237,973 \n\nWarrants \n 19,780,753  \n 3,951,384 \n\nConvertible Preferred Stock \n -  \n 1,398,158 \n\n  \n 24,994,143  \n 10,587,515 \n\n \n\n*Segment\nReporting*\n\n* *\n\nOperating\nsegments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief\noperating decision-maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance.\nThe Company has one operating and reporting segment (BioRestorative Therapies, Inc.) which develops therapeutic products and medical\ntherapies using cell and tissue protocols, primarily involving adult stem cells. The Company’s Chief Executive Officer serves as\nthe CODM and reviews financial information presented on a consolidated basis to make operational decisions and evaluate financial performance.\nThe CODM reviews profit and loss information on a consolidated basis, as presented in the statement of operations. Disaggregated expense\ndata beyond what is included in the unaudited condensed consolidated statements of operations is not provided to the CODM. Since the\nCompany’s operations consist of a single reporting segment, the segment assets are presented on the accompanying unaudited condensed\nconsolidated balance sheets as total assets.\n\n \n\n*Recently\nAdopted Accounting Pronouncements*\n\n \n\nIn\nJuly 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025-05, “Measurement of Credit Losses for Accounts\nReceivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 amends ASC Subtopic 326-20 to provide a practical expedient\nfor all entities and an accounting policy election for all entities, other than public business entities, that elect the practical expedient\nrelated to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions\naccounted for under ASC 606. ASU 2025-05 is effective for all business entities for annual periods beginning after December 15, 2025,\nwith early adoption permitted. The Company adopted ASU 2025-05 effective January 1, 2026. There was no material impact to the Company’s\nunaudited condensed consolidated financial statements as a result of adopting ASU 2025-05.\n\n \n\n*Recently\nIssued Accounting Pronouncements*\n\n \n\nIn\nNovember 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures\n(Subtopic 220-40): Disaggregation of Income Statement Expenses,” (“ASU 2024-03”), which is intended to require more\ndetailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included\nin certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after\nDecember 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The\namendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU\n2024-03 or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the potential\nimpact of this update on its consolidated financial statements and related disclosures.\n\n \n\n13\n\n \n\n \n\nNOTE\n3 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES\n\n \n\nAccrued\nexpenses and other current liabilities consist of:\n\nSCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES \n\n  \n\nMarch 31,\n\n2026\n  \n\nDecember 31,\n\n2025\n \n\nAccrued bonuses \n$746,000  \n$713,500 \n\nInsurance financing arrangement \n 28,774  \n 42,282 \n\nAccrued credit card payable \n 34,515  \n 143,073 \n\nAccrued consulting fees \n 137,122  \n 55,829 \n\nOther accrued expenses \n 1,328  \n 27,363 \n\nTotal accrued expenses and other current liabilities \n$947,739  \n$982,047 \n\n \n\nNOTE\n4 - STOCKHOLDERS’ EQUITY\n\n \n\n*Warrant\nExercise and Issuance*\n\n \n\nOn\nFebruary 6, 2024, the Company entered into agreements with certain holders of its existing warrants exercisable for an aggregate of 3,351,580\nshares of its Common Stock (collectively, the “Existing Warrants”), to exercise their warrants at a reduced exercise\nprice of $2.33\nper share, in exchange for the issuance of new warrants (the “New Warrants”) as described below (the “Warrant\nExercise and Issuance”). The reduction of the exercise price of the Existing Warrants and the issuance of the New Warrants was\nstructured as an at-market transaction under Nasdaq rules. Of the 3,351,580\nshares of Common Stock underlying the Existing Warrants, 918,055\nshares issuable to Auctus Fund, LLC (“Auctus”) were held in abeyance as of December 31, 2025, due to Auctus’\nmaximum beneficial ownership limitation (the “Abeyance Shares”). On February 10, 2026, the Company issued 170,000\nshares of Common Stock to Auctus in partial satisfaction of Abeyance Shares. On February 13, 2026, the Company issued the remaining 748,055\nshares of Common stock in full satisfaction of Abeyance Shares. Following such issuances, there are no remaining Abeyance\nShares.\n\n \n\nIn\nconsideration for the immediate exercise of the Existing Warrants for cash and the payment of $0.125 per share underlying the New Warrants,\nthe exercising holders received the New Warrants to purchase shares of Common Stock in a private placement pursuant to Section 4(a)(2)\nof the Securities Act of 1933, as amended (the “Securities Act”). The New Warrants are exercisable until February 8, 2029\ninto 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\nplacement have not been registered under the Securities Act or applicable state securities laws. Accordingly, the securities may not\nbe offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration\nrequirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company filed a resale\nregistration statement with the SEC to register the resale of the shares of Common Stock underlying the New Warrants, which was declared\neffective by the SEC on April 18, 2024.\n\n \n\n14\n\n \n\n \n\nPrior to the\nWarrant Exercise and Issuance, the Existing Warrants were classified as derivative liabilities. Additionally, the Company analyzed\nthe form of the New Warrants and determined that they should be classified as derivative liabilities in accordance with ASC 815-40,\nDerivatives and Hedging - Contracts in Entity’s Own Equity. Under the Existing Warrants and New Warrants, the Company did not\ncontrol the occurrence of events, such as a tender offer or exchange, that may have triggered cash settlement of the New Warrants\nand not have resulted in a change of control of the Company. As a result, the Existing Warrants and New Warrants did not meet the criteria for equity\ntreatment.\n\n \n\nOn\nFebruary 24, 2026, in connection with the conversion of all outstanding shares of the Company’s Series B Preferred Stock (see “*Series\nB Preferred Stock Conversion*” below), the Company reassessed the classification of the derivative liability classified Existing\nWarrants and New Warrants under ASC 815-40. Following the Series B Preferred Stock conversion, the Company’s voting equity capital\nstructure consists of a single class of Common Stock, such that a tender offer or exchange, that may trigger cash settlement of the Existing\nWarrants or New Warrants, will now result in a change of control of the Company. Accordingly,\nthe Company concluded that, as of February 24, 2026, the conditions previously precluding equity classification were no longer present.\n\n \n\nOn\nFebruary 24, 2026, the Company remeasured the Existing Warrants and New Warrants to fair value, recognized a gain on change in fair value\nof $1,220,121 within the unaudited condensed consolidated statements of operations for the three months ended March 31, 2026, and reclassified\nthe remaining aggregate fair value of $179,228 from warrant liabilities to additional paid-in capital. Following the reclassification,\nthe Existing Warrants and New Warrants are classified as equity and no further fair value remeasurement will be performed. See Note 5\n— Fair Value Measurement for additional details.\n\n \n\n*Warrants*\n\n \n\nSee\nNote 5 – Fair Value Measurement for details regarding the valuation of the Existing Warrants and New Warrants on the date of reclassification.\n\n \n\nThe Company estimated\nthe grant-date fair value of the Placement Agent Warrants to be $200,405\nusing the Black-Scholes option pricing model. The following table shows the detail of the valuation assumptions used:\n\nSCHEDULE\nOF FAIR VALUE VALUATION ASSUMPTIONS \n\n  \nFebruary 13, 2026\n\nRisk free interest rate \n3.61%\n\nExpected term (years) \n5.00\n\nExpected volatility \n100%\n\nExpected dividends \n0.00%\n\n \n\nA\nsummary of the Company’s warrant activity and related information follows:\n\nSCHEDULE OF WARRANT ACTIVITY  \n\n  \n   \n   \nWeighted \n \n \n \n\n  \n   \nWeighted  \nAverage \n \n \n \n\n  \n   \nAverage  \nRemaining \n \n \n \n\n** **** **\n**Number of**** **** **\n**Exercise**** **** **\n**Life**** **\n** **\n**Intrinsic**\n** **\n\n** **** **\n**Warrants**** **** **\n**Price**** **** **\n**In\nYears**** **\n** **\n**Value**\n** **\n\nOutstanding, January 1, 2026 \n 4,495,038  \n$4.94  \n   \n \n \n      \n \n\nGranted \n 17,010,715  \n 0.32  \n   \n \n \n \n \n\nExercised \n (1,725,000) \n 0.00  \n   \n \n \n \n \n\nExpired \n -  \n -  \n   \n \n \n \n \n\nOutstanding, March 31, 2026 \n 19,780,753  \n$1.40  \n 4.30 \n \n$\n-\n \n\n  \n    \n    \n   \n \n \n \n \n\nExercisable, March 31, 2026 \n 19,780,753  \n$1.40  \n 4.30 \n \n$\n-\n \n\n \n\n15\n\n \n\n \n\n*Stock\nOptions*\n\n \n\nOn\nFebruary 14, 2025, the Company granted options to purchase an aggregate 2,152,908 shares of the Company’s Common Stock at an exercise\nprice of $2.46 per share to employees, the Company’s board of directors and a member of the Company’s Scientific Advisory\nBoard. The options had an aggregate grant date fair value of $4,044,250 and vest as follows: (i) options to purchase an aggregate 323,459\nshares of Common Stock vest monthly over one year, and (ii) options to purchase an aggregate of 1,829,449 shares of Common Stock vest\nto the extent of 50% immediately with the remainder vesting quarterly over two years commencing one year from the date of grant. The\nCompany is recognizing the grant date fair value of the options on a straight-line basis over the vesting period.\n\n \n\nIn\napplying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions:\n\nSCHEDULE\nOF STOCK OPTION GRANTED ASSUMPTIONS  \n\n  \nFor the Three Months Ended\n\n  \nMarch 31,\n\n  \n2026 \n2025\n\nRisk free interest rate \nN/A \n4.31 - 4.40%\n\nExpected term (years) \nN/A \n2.77 - 5.38\n\nExpected volatility \nN/A \n98.65 - 99.10%\n\nExpected dividends \nN/A \n0.00%\n\n \n\nThere\nwere no stock options granted during the three months ended March 31, 2026. Stock options granted during the three months ended March\n31, 2025 had a weighted-average grant date fair value of $1.88 per share.\n\n \n\nA\nsummary of the stock option activity during the three months ended March 31, 2026 is presented\nbelow:\n\nSCHEDULE\nOF STOCK OPTION ACTIVITY  \n\n  \n   \n   \nWeighted  \n  \n\n  \n   \nWeighted  \nAverage  \n  \n\n  \n   \nAverage  \nRemaining  \n  \n\n  \nNumber of  \nExercise  \nLife  \nIntrinsic \n\n  \nOptions  \nPrice  \nIn Years  \nValue \n\nOutstanding, January 1, 2026 \n 5,266,600  \n$2.57  \n    \n   \n\nGranted \n -  \n -  \n    \n   \n\nExercised \n -  \n -  \n    \n   \n\nForfeited \n (53,210) \n 1.82  \n    \n   \n\nOutstanding, March 31, 2026 \n 5,213,390  \n$2.58  \n 7.3  \n$    - \n\n  \n    \n    \n    \n   \n\nExercisable, March 31, 2026 \n 4,195,500  \n$2.67  \n 6.9  \n$- \n\n \n\n16\n\n \n\n \n\n**\n\n*Stock-Based\nCompensation Expense*\n\n \n\nThe\nfollowing table presents information related to stock-based compensation expense:\n\nSCHEDULE OF STOCK OPTION EXPENSE  \n\n  \n   \n   \n   \n  \n\n  \nFor the Three Months Ended  \nUnrecognized at  \n\nWeighted Average\n\nRemaining\n \n\n  \nMarch 31,  \nMarch 31,  \nAmortization Period \n\n  \n2026  \n2025  \n2026  \n(Years) \n\nResearch and development \n$132,590  \n$932,573  \n    \n   \n\nGeneral and administrative \n 157,625  \n 1,076,553  \n    \n   \n\nTotal \n$290,215  \n$2,009,126  \n$1,178,846  \n 1.51 \n\nStock-based compensation expense \n$290,215  \n$2,009,126  \n$1,178,846  \n 1.51 \n\n \n\n*ATM\nSales*\n\n \n\nDuring\nFebruary 2025, the Company sold 492,087\nshares of its Common Stock under an at-the-market (the “ATM”) program with a weighted-average gross price of\napproximately $2.20\nper share and raised $1,083,915\nof gross proceeds. During the three months ended March 31, 2025, the total commissions and related legal and accounting fees\nincurred from the ATM Offering were $33,608\nand the Company received net proceeds of $1,050,307.\nDuring the three months ended March 31, 2025, the Company reclassified previously capitalized deferred offering costs of $148,697\nto additional paid-in capital.\n\n* *\n\n*Rodman\nOffering*\n\n \n\nOn\nFebruary 13, 2026, the Company completed a public offering through Rodman & Renshaw LLC (“Rodman”), as placement\nagent (the “Rodman Offering”), of an aggregate of (a) 12,560,715 units\n(the “Common Units”), consisting of (i) 12,560,715 shares\n(the “Shares”) of Common Stock, and (ii) five5-year\nwarrants to purchase up to 12,560,715 shares\nof Common Stock (the “Common Stock Warrants”), at an offering price of $0.35 per\nCommon Unit, and (b) 1,725,000 units\n(the “Pre-Funded Units”), consisting of (i) pre-funded warrants to purchase up to 1,725,000 shares\nof Common Stock at an exercise price of $0.0001 per\nshare (the “Pre-Funded Warrants”) and (ii) Common Stock 5 Warrants\nto purchase up to 1,725,000 shares\nof Common Stock at an offering price of $0.3499 per\nPre-Funded Unit. Immediately upon the closing of the Rodman Offering, certain holders of Pre-Funded Warrants exercised their\nPre-Funded Warrants for the purchase of an aggregate of 1,325,000 shares\nof Common Stock. On March 13, 2026, the remaining individual holder exercised its Pre-Funded Warrant for the purchase of 400,000 shares\nof Common Stock.\n\n \n\nThe\nCommon Stock Warrants (i.e., warrants for the purchase of an aggregate of 14,285,715\nshares of Common Stock) have an exercise price of $0.35\nper share, were immediately exercisable upon issuance and expire\nfive years after the date of issuance. The Pre-Funded Warrants had an exercise price of $0.0001\nper share and were exercised in full during the three months\nended March 31, 2026. The gross proceeds of the Rodman Offering were approximately $5.0\nmillion, before deducting placement agent fees and expenses\nand offering expenses payable by the Company. In connection with the Rodman Offering, the Company entered into a securities purchase\nagreement (the “Securities Purchase Agreement”) with certain institutional investors. Pursuant to the Securities Purchase\nAgreement, the Company agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares\nof Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock or file any registration\nstatement or prospectus, or any amendment or supplement thereto for 90 days after the closing date of the Rodman Offering, subject to\ncertain exceptions. In addition, the Company has agreed not to effect or enter into an agreement to effect any issuance of Common Stock\nor any securities convertible into or exercisable or exchangeable for shares of Common Stock involving a variable rate transaction (as\ndefined in the Securities Purchase Agreement) until the nine-month anniversary of the closing date of the Rodman Offering, subject to\ncertain exceptions.\n\n \n\nIn\nconnection with the Rodman Offering, the Company entered into a placement agency agreement, dated February 11, 2026, with Rodman pursuant\nto which the Company engaged Rodman as the exclusive placement agent in connection with the Rodman Offering. The Company agreed to pay\nRodman a cash fee equal to 7% of the aggregate gross proceeds received in the Rodman Offering. The Company also agreed to reimburse Rodman\nfor up to $100,000 for out-of-pocket expenses for legal fees and other expenses. In addition, the Company agreed to issue to Rodman,\nat the closing of the Rodman Offering, warrants, exercisable from the date of issuance until the five year anniversary of the commencement\nof sales, to purchase up to 1,000,000 shares of Common Stock (which represents 7% of the aggregate number of shares of Common Stock,\ninclusive of shares of Common Stock issuable upon the exercise of Pre-Funded Warrants, sold in the Rodman Offering), at a per share exercise\nprice of $0.4375 (which represents 125% of the public offering price per Common Unit) (the “Placement Agent Warrants”).\n\n \n\n*Series\nB Preferred Stock Conversion*\n\n \n\nOn\nFebruary 24, 2026, Auctus converted its remaining 1,398,158 shares of Series B Preferred Stock into 1,398,158 shares of Common Stock.\nFollowing this conversion, no shares of Series B Preferred Stock remain outstanding as of March 31, 2026.\n\n \n\n \n\n \n\n \n\n*Common\nStock Repurchase Program*\n\n \n\nOn\nJune 16, 2025, the Company’s Board of Directors authorized a Common Stock repurchase program under which the Company may repurchase\nup to $2,000,000 of its outstanding Common Stock through June 16, 2026. No repurchases have been made as of March 31, 2026.\n\n \n\n*Common\nStock Issuances*\n\n \n\nDuring the three months ended March 31, 2025, the Company issued 63,525 shares of Common Stock to Auctus Fund, LLC\nin partial satisfaction of shares held by abeyance.\n\n \n\nDuring the three months ended March 31, 2025, the Company issued 29,249 shares of Common Stock related to the exercise\nof an option at an exercise price of $1.45 per share, which resulted in gross cash proceeds to the Company of $42,411.\n\n \n\nDuring\nthe three months ended March 31, 2026, the Company issued 918,055 shares of Common Stock to Auctus in full satisfaction of shares held\nby abeyance.\n\n \n\nIn\naddition, during the three months ended March 31, 2026, the Company issued: (i) 12,560,715 shares of Common Stock, and 1,725,000 shares\nof Common Stock upon the exercise of all outstanding Pre-Funded Warrants, in connection with the Rodman Offering (see “*Rodman\nOffering”* above); and (ii) 1,398,158 shares of Common Stock upon the conversion of the remaining outstanding shares of Series\nB Preferred Stock (see “*Series B Preferred Stock Conversion”* above).\n\n \n\nNOTE\n5 – FAIR VALUE MEASUREMENT\n\n \n\nOn\nFebruary 24, 2026, the Company estimated the aggregate fair value of the Existing Warrants and New Warrants to be $179,228 using the\nBlack-Scholes option price model (Level 3 inputs). The change in fair value of $1,220,121 from January 1, 2026 through February 24, 2026\nis included in gain on change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations for\nthe three months ended March 31, 2026. On that date, the Existing Warrants and New Warrants were reclassified from warrant liabilities\nto additional paid-in capital, and no warrant liability remains outstanding as of March 31, 2026. The following table shows the detail\nof the valuation assumptions used:\n\nSCHEDULE\nOF FAIR VALUE VALUATION ASSUMPTIONS \n\n  \nFebruary 24, 2026\n\nRisk free interest rate \n3.47%-3.57%\n\nExpected term (years) \n0.71 - 2.96\n\nExpected volatility \n109% - 129%\n\nExpected dividends \n0.00%\n\n \n\nThe\nfollowing 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\nbasis during the three months ended March 31, 2026 and three months ended March 31, 2025:\n\n SCHEDULE\nOF FAIR VALUE MEASURED ON RECURRING BASIS \n\n  \nFor the Three Months Ended March 31, \n\n  \n2026  \n2025 \n\nBalance, January 1, \n$1,399,349  \n$2,520,851 \n\nChange in fair value of warrant liability \n (1,220,121) \n 634,119 \n\nReclassification of warrant liability \n (179,228) \n - \n\nBalance, March 31, \n$-  \n$3,154,970 \n\n \n\nAssets\nand liabilities measured at fair value on a recurring basis are as follows:\n\n SCHEDULE\nOF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS  \n\n  \nFair value measurements at reporting date using: \n\n  \n\nQuoted prices in\n\nactive\nmarkets for\n\nidentical liabilities\n\n(Level 1)\n  \n\nSignificant other observable inputs\n\n(Level 2)\n  \n\nSignificant unobservable inputs\n\n(Level 3)\n  \nTotal Fair Value \n\nAssets: \n    \n    \n    \n   \n\nMarketable securities as of March 31, 2026 \n$479,351  \n$      -  \n$-  \n$479,351 \n\nMarketable securities as of December 31, 2025 \n$1,441,734  \n$-  \n$-  \n$1,441,734 \n\n  \n    \n    \n    \n   \n\nLiabilities: \n    \n    \n    \n   \n\nWarrant liabilities as of March 31, 2026 \n$-  \n$-  \n$-  \n$- \n\nWarrant liabilities as of December 31, 2025 \n$-  \n$-  \n$1,399,349  \n$1,399,349 \n\n \n\nNOTE\n6 – SUBSEQUENT EVENTS\n\n \n\n*Authorized\nCapital*\n\n \n\nOn\nApril 2, 2026, the Company’s Board of Directors approved an increase in the number of authorized shares of Common Stock to 1,500,000,000,\nsubject to stockholder approval.\n\n* *\n\n17"}