BRTX

Greetings. Welcome to the BioRestorative Therapies Third Quarter 2025 Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer, Investor Relations. You may begin.

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on BioRestorative Therapies' current beliefs, assumptions, and expectations. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. For details on factors, among others, that could affect expectations, see Part 1, Item 1A of our annual report on Form 10-K for the year ended 12/31/2024 filed with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. BioRestorative Therapies undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law. On the call today representing the company are Lance Alstodt, BioRestorative Therapies' President, Chairman, and Chief Executive Officer; Francisco J. Silva, Vice President of Research and Development; and Robert Eugene Kristal, the company's Chief Financial Officer. With that said, I'll now turn the call over to Lance.

Thanks, Stephen, and good afternoon, everyone. Welcome. On behalf of the management team and everyone at BioRestorative Therapies, I would like to thank you for your interest in our company. For those of you who are shareholders, we appreciate your continued support. As you can see from the press release we issued just a short time ago, we continue to execute well across all areas of our business in the third quarter. We have a lot of exciting things to look forward to as we move through the last couple of months of the year. With that said, I'd like to ask Robert Eugene Kristal, our CFO, to provide a brief overview of our third-quarter financial results.

Thanks, Lance. Good afternoon, everyone. To streamline the presentation of the financial results, all the numbers I will refer to have been rounded, so they are approximate. Third-quarter 2025 revenues were $11,800 and consisted entirely of royalty revenue. This compares to revenues of $233,600 in Q3 2024, the vast majority of which came from biocosmeceutical sales in connection with our exclusive supply agreement with Cartessa. The overall year-over-year decrease in Q3 2025 revenues was driven by the timing of orders for the developing biocosmeceutical revenue stream. The company's third-quarter 2025 loss from operations was $3.7 million compared to $2.3 million for the comparable period of 2024. The company's third-quarter 2025 net loss was $3 million or $0.33 a share compared to a net loss of $1 million or $0.13 per share for 2024. The company ended the quarter with cash, cash equivalents, and marketable securities of $4.5 million with no outstanding debt. This did not include the gross proceeds of approximately $1.1 million from the company's recent financing, which we completed subsequent to the quarter end. With that, I'll now turn the call over to Francisco.

Thanks, Rob. For the benefit of those who are new to BioRestorative Therapies, I would like to take a moment to summarize our development programs. Our lead clinical-stage candidate, BRTX-100, is a novel cell-based therapeutic engineered to target areas of the body that have little blood flow. The product is formulated using autologous, or your own, cultured mesenchymal stem cells collected from a patient's bone marrow. The safety and efficacy of BRTX-100 in treating chronic lumbar disc disease is being evaluated in our ongoing Phase II prospective, randomized, double-blinded, and sham-controlled study. A total of up to 99 eligible subjects will be enrolled at up to 16 clinical sites across the United States. Subjects included in the trial will be randomized two to one to receive either BRTX-100 or placebo. Enrollment in the Phase II study is starting to accelerate, and we expect to be able to share more data as appropriate. In February, we announced that the BRTX-100 program for chronic lumbar disc disease was granted Fast Track designation by the FDA. This was a major milestone achievement, which has enabled us to work more collaboratively with the FDA as we continue to advance our lead clinical program towards a Biologic License Application (BLA) approval. In that regard, through the Fast Track designation, we are anticipating that the FDA will grant us a Type B meeting to discuss a potential accelerated BLA approval pathway for the BRTX-100 program for the treatment of chronic lumbar disc disease. Moving to our core preclinical metabolic program, ThermoStem, we are developing a cell-based therapy candidate to target obesity and related metabolic disorders using brown adipose tissue-derived stem cells, which are then used to generate brown adipose tissue (BAT) as well as exosomes secreted by the brown adipose stem cells. BAT is intended to mimic naturally occurring brown adipose depots that have been found to regulate metabolic homeostasis in humans and is involved in weight loss. The global obesity market is projected to exceed $100 billion annually by the end of the decade, driven by unprecedented demand for GLP-1 therapies. BioRestorative Therapies' ThermoStem program is uniquely designed to address this demand by, one, providing an alternative to chronic GLP-1 injections through a regenerative cell-based solution; two, mitigating tolerability issues such as muscle mass loss or potential cardiovascular risk, some of the most pressing concerns associated with GLP-1 therapies; and three, creating licensing and partnership opportunities. With respect to the last point, we are pleased that our previously reported substantial discussions with an undisclosed commercial-stage regenerative medicine company regarding a potential license agreement for our ThermoStem metabolic disease program are continuing. While we cannot provide interim progress updates nor provide any assurances that this will come to a mutually acceptable agreement, we are committed to closing the loop as soon as practical. As awareness of the promise that our ThermoStem-derived brown adipose-derived stem cells hold for the treatment of obesity-related metabolic disorders continues to grow, it is important that this potentially game-changing opportunity is well protected, both for us and any current or future potential licensing partners. Accordingly, we have been methodically building a comprehensive patent portfolio with issued patents that cover both U.S. and international markets. The most recent example of that came this past October when we announced a major intellectual property milestone. The Japanese Patent Office issued a notice of allowance for our ThermoStem platform. The newly allowed patent provides broad protection terms for allogeneic, off-the-shelf brown adipose-derived stem cell technology. These claims are materially stronger than previously granted patents, covering not only the therapeutic cells themselves but also multiple methods of encapsulation and delivery, including alginate microcapsules, cellulose hydrogels, polymer membranes, and advanced scaffolding systems. With that, I will turn the call back over to Lance.

Thanks, Francisco. As you can see from what Francisco and Rob just reviewed, we had an exciting and productive third quarter. While the progress continues, we are carefully managing our resources as we advance our two core development programs. Before I close, I want to highlight two transformative developments that we believe reshape BioRestorative Therapies' commercial and clinical trajectory. First, our biocosmeceuticals business continues to gain a lot of momentum. Over the last several months, we have rebuilt and strengthened our commercial infrastructure, including supply chain, sales coverage, distribution, and customer engagement. A major part of that strategy was bringing in the right commercial leader. As many of you saw in a recent press release, we welcomed Crystal Romano as our Global Head of Commercial Operations. Crystal is a known commodity to us and to the aesthetics community. She helped lead commercial execution efforts as President of Cartessa, and she understands the physician office and medical spa channels exceptionally well. Having someone with her product experience, account relationships, and hands-on operating background gives us tremendous confidence in her ability to execute and drive scalable revenue growth. The enthusiasm that we are seeing and that from what I am seeing in the field, combined with Crystal's leadership, positions this business for meaningful revenue contribution as we scale. For a company in our position, having a commercial business capable of generating revenue alongside our clinical programs is strategically important, and we believe it can become a very material contributor in 2026 and beyond. Second, and equally as exciting, we believe that enrollment in our Phase II BRTX-100 clinical trial is approaching completion. Each month, we move closer to a fully enrolled study and a more statistically powerful data set. While the data remain blinded, the initial trends continue to mirror our earlier clinical signals, including significant improvement in pain and function for patients suffering from chronic lumbar disc disease. Completing enrollment would be a major milestone for the company, and it positions us exceptionally well heading into a potential Type B FDA meeting in December. As enrollment completes, we intend to present additional data from a larger patient population, and we are optimistic that the results will be consistent with the encouraging trends observed so far. Simply put, the pathway to a potential Phase III and ultimately a BLA has never been more visible. In addition, I want to highlight the strength of our recent financing. Following the end of the quarter, we closed a fully subscribed financing that was priced above market. Senior leadership, including myself and several of our existing investors, participated in the round. We believe that level of participation reflects continued confidence in the direction of the company, belief in the value of our clinical and commercial strategy, and alignment with long-term shareholder interests. Importantly, the financing strengthened our balance sheet and ensures we have the resources needed to advance our short-term clinical and commercial milestones while continuing to manage our cash efficiently. We also remain, as Francisco said, in subsequent discussions with a commercial-stage regenerative medicine company regarding a potential license of our ThermoStem metabolic program. As you mentioned, we are not providing interim updates on that. We remain committed to closing the loop on that process as soon as practical. We believe that the strength of our expanding intellectual property portfolio further enhances the value of that platform. We have also been able to access that cell line and that platform for use in our biocosmeceuticals, so we are starting to cross-fertilize our cell-based therapy technology into commercially developed products as well. Taken together, accelerating our clinical progress, a growing commercial engine, ongoing licensing discussions, and a strengthened balance sheet, we believe BioRestorative Therapies is well-positioned to deliver meaningful value creation in the quarters ahead. I thank you for your time. With that, concluding our introductory remarks, we are happy to take any questions you may have. Holly, if you wanted to open it up for some questions, I would be happy to do that.

Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one to ask a question. One moment, please, while we poll for questions. Your first question for today is from Michael Okunewitch with Maxim Group.

Hey, guys. Thank you for taking my questions today. Congrats on all the great progress.

Thanks, Michael.

I guess just with the changes to your leadership and seeming increased focus on this biocosmeceuticals business, just talk a little bit about how significant that overall cosmeceuticals opportunity is? And then is this something that you would be able to tap on your own, or would you need more Cartessa-like deals to penetrate this market? I would just like to get a better understanding of how you view the market dynamics here.

Sure. No, I appreciate the question. It is going to be a substantial focus for us going forward. We are really positioning the company as a hybrid where we are taking opportunity and advantage of near-term revenue opportunities along with the longer-term clinical outcomes. I think there is no one like us in the MicroCap biotech space, which I think provides for a very differentiated profile and one that is extremely interesting for both investors as well as success to shareholders. In terms of the opportunity, this is a $63 billion market opportunity. This is a huge and growing market, the biocosmeceutical space. We are a biotech company, and there are not many biotech companies that are fully focused on developing this market. Many companies are marketing companies that are sourcing material that I would describe as low dilution, low quality. We are able to manufacture, formulate, test, quality test, and release products coming directly from our lab using different cell lines and different variabilities. We are approaching this market originally with an exclusive distribution agreement with Cartessa. We have been working with Cartessa to broaden that scope outside of Cartessa's distribution capabilities. That is part of the reason for having Crystal in place. We have more of a three-pronged approach. We are going to add additional distributors on board, so not just Cartessa, but many others. Those distributors we have relationships with through Crystal's large rolodex of account relationships. We will also be selling directly into the med spas and aestheticians, that professional channel, where we will be able to capture that margin that we would have otherwise not been able to capture by selling directly into Cartessa. So that is an exciting accretive opportunity for us. Crystal has a tremendous amount of relationships within that professional channel as that was her calling effort as part of Cartessa. So we are excited to really get that underway. I will tell you, based on some of the calls that I have had with her, I am very confident and optimistic that this is a business that we are going to put the wheels on track very soon and be able to demonstrate some meaningful wins within the first couple of quarters of her being here. I would also like to discuss potentially the idea of going direct to consumer with a branded product that we have been discussing and talking about from a business plan perspective, understanding the logistics and the resources that are required in order to do that. I think this three-pronged approach gives us a really broad approach to this large and growing market with probably one of the best, if not the best, most potent exosome-based secretomes that are out there. The beauty about our business and our manufacturing capabilities is the ability to work with the customer to customize, whether it is a branded product or a white label product, to their specifications and to their customer networks. Dialing up and dialing down the potency, adding different types of peptides, adding different types of growth factors, etcetera. This is going to be something that we should all keep our eyes on. Obviously, it is a little bit too early to give specific guidance in terms of the revenue ramp. I still maintain the idea that we will see some lumpiness in this business as we are starting out. There may be quarters where we have an outsized revenue number and some quarters in the very beginning where it looks like a miss, but it is really just about the developing business and reaching a broader group of customers. We are excited about this, and we will talk more about this going forward.

And then I would like to follow up on that, just talking a little bit about how this impacts the overall business strategy, how you are balancing these now two sides of the business, and also some potential synergy there. So is your focus on biocosmeceuticals shifting any resources away from clinical development, or is this truly additive? And then are there any potential synergies in biocosmeceuticals from having the credibility of a legitimate biotechnology company?

Yes. So the cross synergies, I would describe, have to do with the cell lines that we are using for clinical purposes. As you know, we are not commercializing our cell lines domestically as they are governed under the FDA from a BLA license perspective. But we are able to use aspects of those cell lines to develop products for topical use only, for cosmetic use only. I expect that the end users will use these products for topical use only. I do not know whether or not they will use it off-label for regenerative purposes. We do not condone that, but I believe that will be also an aspect of the end user's application. In terms of resources, we can manage the resources within this space entirely with the people that we have today. We may add some additional folks on the quality side and on the manufacturing side. We are going to see a lull in the utilization of our lab as we fulfill our enrollment obligation under our Phase II protocol. Then there will be some time of delay between a Phase II and a Phase III. Our expectation is that during that time frame, we can really capitalize on full utilization and focus within the biocosmeceutical program.

Alright. Thank you for the additional color, Lance. I really appreciate the update.

Thanks, Michael.

Your next question for today is from Jonathan Matthew Aschoff with ROTH Capital.

Hi. How are you doing? I was wondering on BRTX-100, can you help us understand when we may see the subsequent data release? Will it still be blinded, or will it be the final data since it sounds like you are almost enrolled? Also, can you help us out with any maybe numerical enrollment update?

On the numerical side, I will say we are more than three-quarters enrolled. We have more than 10 patients in late-stage screening, which could come in for harvest within the next couple of weeks. If you do the math, we are getting really close. I do not know if we are going to get it just under the wire in terms of the year-end, but to the extent that it is built into January, I think that is a very realistic and pragmatic target for us to hit from an enrollment perspective. As far as data, we are going to keep the data blinded because we have a strategy as it relates to communication with the FDA under our Fast Track designation, looking to accelerate the BLA process. Our hope would be to get directly into a Phase III study from a pivotal perspective as opposed to doing two Phase III studies, as most companies do two Phase III studies. We have such a large and robust data set in connection with our Phase II with 99 patients. The idea would be to keep that data blinded and report on higher numbers with more data on a blinded perspective as we continue to attend and ask to present our material at certain conferences, certain industry-related conferences. In terms of the FDA and regulatory strategy, I think it is important that people understand that getting a Phase III pivotal while we are still completing the Phase II, which is kind of part of the ask in this upcoming Type B meeting, is game-changing for us. It would basically shave off about three years of time on the calendar and significant costs related to doing another Phase III. If that were the case, then we would want to keep our data related to our Phase II blinded and do the appropriate follow-up in our protocol to a 24-month follow-up. That being said, it is really important to note that if the FDA does give us that green light, what they are doing is they are saying our safety profile is pristine. They are not going to allow us to move forward with a bad safety profile. Today, we have no material adverse events, no dose-limiting toxicities. Everything is really clean. It is an autologous product. We are very comfortable with that. They will be looking at a subset of data with respect to efficacy. That green light from them would be tremendous. It would be a major value-enhancing inflection point and would be sort of an acknowledgment that we do not have to unblind the data; we are going to go forward in this pivotal study. If for some reason they decide, like many other biotech companies, we have to do two Phase III studies, that would put us in a position where we would consider unblinding the data after a 12-month follow-up and then report on that data effectively 12 months from the last patient that was enrolled. Like I said, we are expecting enrollment to be complete in the very near term.

Alright. So it is enrollment completion, then a Type B meeting where you will figure out if it is one or two Phase III studies. That Type B looks like...

I think we are going to continue to enroll patients. In December, we hope and expect, you know, the FDA has been a little bit slow to react just given the shutdown. We expect that we will get on the calendar sometime before the end of the year and have that Type B meeting. It is unclear whether we are going to have a definitive response from the FDA. We will be able to learn a lot. We will be able to review what a Phase III protocol looks like and get some buy-in. Part of the Fast Track designation process is to really sit down with the FDA and explore ways in which we can accelerate that BLA.

Okay. And what is going on with the cervical trial?

Getting that clearance is important. I think that is very meaningful in terms of keeping our pipeline robust. We have not dedicated resources to developing it. We have a protocol. We have an agreed-upon protocol with the FDA, but it is not as if we are starting to go out and recruit sites and recruit patients just given the financial constraints. I think this is something that we want to mark, that we have experience getting multiple INDs approved. It is my belief that our focus should really be around the lumbar spine. If we can get the BLA approved, then it is our expectation that people will be really taking advantage of the broad application of that product in a variety of different avascular zones. But I think we tie that more to a company that has more robust capital resources down the road. I think it shows and demonstrates our strong regulatory capabilities and clinical capabilities by getting approved INDs in a variety of different applications.

Okay. You know, lastly, do you think you are done booking biocosmeceutical revenues this year, or do you think we might have a recurrence of something in April that might look a little like the second quarter was?

I do not know about the second quarter because it could be. I mean, now, I do not have the visibility. I know that some products have been sold since Crystal has been on board, but it is probably nascent relative to what I think the opportunity looks like as we begin to scale and she gets her feet under her.

Okay. Thank you very much, guys.

Thank you.

Once again, if you would like to ask a question, please press 1 on your keypad. We have reached the end of the question and answer session. I will now turn the call over to Lance for closing remarks.

Thank you, Holly. I appreciate everyone's time. I think this is a really positive quarter for the company in terms of our clinical progress. Again, I am really excited about the development and some of the very meaningful changes that we have made in terms of bolstering our commercial program. I think there is more to talk about next quarter in that regard. Obviously, this upcoming discussion that we hope to have with the FDA should provide us with additional clarity on the regulatory pathway. Thanks again for your participation. We look forward to talking to you soon.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Greetings. Welcome to the BioRestorative Therapies Second Quarter 2025 Results and Business Update Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer, Investor Relations. You may begin.

Thank you, Ali. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on BioRestorative Therapies' current beliefs, assumptions and expectations, and such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. For details on factors, among others, that could affect our expectations, see Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. BioRestorative undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, other than as required by law. On the call today representing the company are Lance Alstodt, BioRestorative's Chairman and Chief Executive Officer; Francisco Silva is Vice President of Research and Development; and Robert Kristal, the company's Chief Financial Officer. With that said, I'll now turn the call over to Lance.

Thanks, Steve. Good afternoon, everyone, and welcome. On behalf of the management team and everyone at BioRestorative, I'd like to thank you for your interest in the company. And for those of you who are shareholders, we appreciate your support. As you can see from the press release, we executed very well across all areas of the business in the second quarter, a continuation really from Q1, and we have a lot of exciting things to look forward to as we move through the second half of the year. With that said, I'd like to ask Rob Kristal, our CFO, to provide a brief overview of our second quarter financial results.

Thanks, Lance. Good afternoon, everyone. To streamline the presentation of the financial results, all the numbers I will refer to have been rounded, so they are approximate. Second quarter 2025 revenues were $303,000 compared to $89,000 in the same period last year. This represents an increase of 240%, primarily resulting from our contract manufacturing agreement on BioCosmeceuticals. The company's second quarter 2025 loss from operations was $3.3 million compared to $2.5 million for the comparable period of 2024. The company's second quarter 2025 net loss was $2.7 million or $0.30 per share compared to a net loss of $4 million or $0.50 per share for the second quarter of 2024. The company ended the quarter in a strong financial position with cash, cash equivalents and marketable securities of $7.4 million and no outstanding debt. With that, I'll now turn the call over to Francisco.

Thanks, Rob. For the benefit of those who are new to the BioRestorative story, I would like to take a moment to summarize our developmental programs. Our lead clinical stage candidate BRTX-100, is a novel cell-based therapeutic engineered to target areas of the body that have little blood flow. The product is formulated from autologous or a person's own cultured mesenchymal stem cells collected from the patient's bone marrow. The safety and efficacy of BRTX-100 in treating chronic lumbar disc disease, or CLDD, is being evaluated in an ongoing Phase II prospective randomized, double blinded and controlled study. A total of up to 99 eligible subjects will be enrolled at up to 16 clinical sites across the United States. Subjects included in the trial will be randomized 2:1 to receive either BRTX-100 or placebo. In a recent presentation that I gave a few weeks ago as part of the Clinical Innovations track at the International Society for Stem Cell Research or ISSCR 2025 Annual Meeting in Hong Kong, I reviewed very promising blinded data from the first 36 subjects enrolled in the Phase II trial. By the way, that number of subjects was up more than twofold since my previous presentation at ISCT back just in May. To help put the preliminary binding results in perspective, the FDA is requiring at least a greater than 30% improvement in function in the Oswestry Disability Index, or ODI, and a greater than 30% reduction in pain on the visual analog scale, or VAS, in determining whether the clinical trial will be allowed to proceed and ultimately gain BLA approval. Thus far, BRTX-100 is doing much better than that as I presented at ISSCR. Over 74% of the subjects showed greater than 50% improvement in function by 52 weeks. Over 72% of the subjects reported greater than 50% reduction in pain by 52 weeks. And combined, greater than 50% improvement in both ODI and VAS measures was achieved by a meaningful portion of subjects across all time points. From a safety perspective, again, no serious adverse events or dose-limiting toxicities were reported between 26 and 104 weeks at the target dose of 40 million cells. The data presented at ISSCR was meaningful and demonstrated a strong signal towards safety and efficacy and has helped us in connection with an increased enrollment rate. In fact, I am pleased to report that we are now more than halfway through enrollment of our 99 subject enrollment goal. In addition, again, based on the positive preliminary data, we intend to meet with the FDA in connection with a proposed Type B meeting in order to accelerate the regulatory pathway towards the BLA license of our BRTX-100 candidate. This is really exciting news, and we hope to be in a position to discuss further in the coming weeks. Moving to our core preclinical metabolic program, ThermoStem, we are developing cell-based therapy candidates to target obesity and metabolic disorders using brown fat or fat-derived stem cells to generate brown adipose tissue or BAT as well as exosomes secreted by the BAT cells. BAT is intended to mimic naturally occurring brown adipose depots that regulate metabolic homeostasis in humans and is involved in weight loss. While further work is needed to fully understand the mechanism of action of thermostat and its impact on weight loss, we have not seen nor do we expect the same negative secondary effects of GLP-1 pharmaceuticals, such as loss of muscle mass and negative cardiovascular effects. As awareness of the promise that our ThermoStem-based BAT holds for the treatment of obesity and related metabolic disorders continues to grow, it is important that this potentially game-changing opportunity is well protected, both for us and any current and our future potential licensing partners. Accordingly, we have been methodically building a comprehensive portfolio of issued patents that cover the U.S. and international markets. And we are pleased to see our previously reported substantive discussions with an undisclosed commercial stage regenerative medicine company with regard to a potential license agreement for our ThermoStem metabolic disease programs are continuing. While we cannot provide interim progress updates and will provide any assurances that we will come to a mutually acceptable agreement, we are committed to closing the loop on this as soon as practical. With that, I will turn the call over back to Lance.

Thanks, Francisco. As you can see from what Francisco and Rob just reviewed, we've had an exciting and productive second quarter. And while that progress continues, we're carefully managing our resources as we advance our 2 core clinical development programs, BRTX-100 and ThermoStem, while ramping our commercial opportunities on regenerative biologic secretome products. With respect to the latter, we're in advanced discussions with key partners and influencers to help accelerate the growth of this program and look forward to reporting more catalysts and news from it going forward. So to summarize, we're making great progress with our Phase II trial for BRTX-100 to treat cLDD. And while the data is still blinded, the initial trends continue to be very encouraging. We have great safety profile and also highlighted by a 50 -- greater than 50% improvement in pain and function in a significant portion of cLDD subjects. We intend to present more data from this trial with a larger patient population, and we are very optimistic that this data will be consistent with the previous trends. In addition, and as highlighted by Francisco, we are very optimistic about our regulatory pathway now that we have gotten very close to about 3/4 of the trial enrolled. So we look forward to having that upcoming meeting with the FDA. Francisco, we are very optimistic about our regulatory pathway now that we have gotten very close to about 3/4 of the trial enrolled. So we look forward to having that upcoming meeting with the FDA. We continue to be in substantive discussions with regard to a potential license of the ThermoStem metabolic IP, and we are also in substantive discussions with partners on the commercial BioCosmeceutical platform to help expand our contract manufacturing business opportunities. And finally, we ended the second quarter in a very strong financial position with cash, cash equivalents and marketable securities of $7.4 million as of June 30, 2025. We will continue to efficiently manage our cash reserves while executing upon our strategic goals. With that, I thank you all with -- given some of our introductory comments, and we're happy to take any questions you may have.

At this time, we will be conducting a question-and-answer session. [Operator Instructions] Your first question for today is from Jonathan Aschoff with ROTH Capital Partners.

Could you say anything about the timing for the start of the cCDP trial and the size of that trial?

No, we did not comment on the cervical trial. Our goal, we could effectively pursue a variety of different indications. As everyone knows, our cervical trial has been approved to initiate a Phase II. And we probably could get the same sort of status on a variety of other avascular zones being hips, knees and shoulders. And I think what we really want to focus and laser focus in on is our lumbar trial and getting that into a BLA. So we're really encouraged by the tremendous growth that we've seen in enrollment over the quarter. I'm very proud of the team and our service providers in assisting us in that process. And our goal right now is to drive that into a Phase III. And hopefully, we'll have some really good insight in terms of how the FDA is thinking about it given how much we've enrolled recently.

Okay. On the revenue side with Cosmeceutical driving it, do you think that versus the last couple of quarters that this is pretty much up and up from here? Or is it too lumpy to say that?

I think it's a little early. Up and up is a difficult comment to react to because it's somewhat of a growing business. I think what we'll see is a tremendous increase in visibility. As you know, we've hired Sandy Lipkins, who is an innovator and a pioneer within the space and he's been doing a lot of the groundwork, making sure that some of the meaningful consumers of these products are aware of us. And from a back-office perspective, we've been making sure that we're appropriately documented and qualified and validated in order to commercialize these programs at a rate that would be consistent with some of our expectations. So we think it's up and up from the standpoint of starting at a certain base. But I don't have a whole lot of guidance for you in terms of what we should expect quarterly going forward.

Okay. Lastly, should we -- this is probably more for Rob. Should we expect the same SG&A expense trend this year like last year, heavy in the first quarter, similar but lighter, much lighter quarters 2 through 4?

Yes, that would be appropriate.

And I would also -- I would just add to that, just to give you a little bit more insight, Jonathan, is as we turn the corner and get into 2026 and if our enrollment continues to tick at the pace at which it is, and we have some of these very positive developments with the FDA in terms of our regulatory pathway, we could expect sort of a cool down in SG&A as it relates to not having to enroll the amount of patients in the first couple of quarters of 2026 as we sort of gear up for a Phase III.

Okay. Lastly, the COGS looked really kind of low for $303,000 in that revenue. Is that what it's going to kind of look like going forward? I kind of a lot higher COGS than that.

Yes. I think our margin related to some of the secretome products are -- without giving specific numbers, I think this is -- it's not by coincidence that this is a business that we want to be in, not only is it a huge market, and we don't need much of a penetration rate to put up some pretty big revenue numbers, but it's at quite a high margin as well.

And Jonathan, I would add to the COGS specifically that we improved some -- we improved our efficiencies a little bit in terms of making product and then the packaging costs as well. We improved some pricing there by shopping really some different vendors for particular things we need in the packaging.

Your next question is from Michael Okunewitch with Maxim.

Thank you so much for taking my question today. Congrats on all the great progress. So I guess just to kick things off, we have seen some vocal support from FDA leadership for stem cells. You have a controlled study in Phase 2. You previously mentioned the desire to bring this as a registrational. And now that Type B meeting is planned. So have there been any new recent interactions with FDA suggesting there may be further support for that expedited pathway?

I can tell you anecdotally, what we've heard, which would imply that there is a lot of wind at our backs with respect to an accelerated pathway. However, we have not learned directly through our conversations with the FDA that we have been designated other than just our Fast Track designation, anything more than what we've disclosed.

All right. And then with regards to Phase 2, the threshold with FDA is 30% on pain and function, but that's from baseline, correct? So what would you need to show versus placebo? Is that a comparison based on the proportion of responders, magnitude? Can you just give a bit more color on that?

Yes. So that's -- it's based on 30% -- minimum of at least 30% in both pain and function as compared to baseline. And then that cohort is compared to the control group that is not undergoing any type of intradiscal injection. It's a sham and then comparing both cohorts and looking at our responder rate.

And Michael, I would also add, just in case there's any ambiguity, our primary endpoint is safety. And we've not had -- as Francisco mentioned, we've not had any material adverse events or dose-limiting toxicity. So to use our CRO's words, not our own, this is probably the best safety profile that they've ever seen. So the FDA doesn't even look at some of the secondary efficacy endpoints unless you have a pretty clean bill of health from a safety perspective. So we feel like based on the data that we've talked about and that we've analyzed at least on a blinded basis, not only is this product extremely safe, but we are seeing tremendous signal from an effectiveness perspective.

Yes. No, what we've seen so far is certainly encouraging. I'd like to actually just follow up on that. And do you have a sense of when we could start to see some unblinded data? Is there a potential for an unblinded interim? Are we going to have to wait for the full 99? Or is this something that will be better asked on the back end of that Type B meeting?

I think it's better asked on the back half because it will really help shape what the regulatory strategy will be. We may be in a position to through blinded data, get to the next stage and maybe even get to the next stage prematurely, which would be phenomenal news and would be a huge cost savings and put us in a position of really driving the Phase 3. And if that is the decision and if that is the nature of the conversation, and remember, the tides have turned at least from the administration's perspective on cell-based therapies. So we feel like this wind at our back could drive to that potential outcome. And if so, we wouldn't want to give up the alpha associated with an interim analysis.

Yes. No, that makes a lot of sense, and it's certainly an encouraging time. I'm going to be looking forward to hearing the results of that.

I'll tell you, for as long as we've been here, we've never been so encouraged about where we are as it relates to the enrollment, the results, the regulatory environment and some of these upcoming conversations as well as all cylinders kind of hitting on BioCosmeceuticals. So I think you're going to see a big change in our profile and what the opportunity set looks like going forward into the back half of the year.

We have reached the end of the question-and-answer session, and I will now turn the call over to Lance Alstodt for closing remarks.

Yes. Again, I appreciate everyone's attention to the company following us diligently. Great questions as usual from the analyst community. And thank you again to our investors for your continued interest and support. We look forward to talking to you all soon. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.