Between February 20, 2020 and February 26, 2020, BioRestorative Therapies, Inc. (the “Company”) borrowed an aggregate of
$353,761.99 from John M. Desmarais. The promissory notes evidencing the loans (the “Notes”) provide for the payment of the principal amount, together with interest at the rate of 12% per annum, upon demand by Mr. Desmarais on or after March 10,
2020. The payment of the Notes is secured by the grant of a security interest in substantially all of the Company’s assets pursuant to a security agreement between the Company and Mr. Desmarais, as amended (the “Security Agreement”). Mr. Desmarais
previously served as a director of the Company until his resignation on January 10, 2020.
As disclosed in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019, as of
September 30, 2019, the Company had a working capital deficiency, a stockholders’ deficiency and outstanding debt of $13,514,377, $12,428,533 and $8,496,076, respectively. During
the three and nine months ended September 30, 2019, the Company incurred net losses of $5,056,973 and $13,097,335, respectively. Subsequent to September 30, 2019, the Company has continued to incur substantial losses and has received revenue of
only $32,000 and aggregate equity and debt financing proceeds of $520,000 and $2,167,387 (including the above loans from Mr. Desmarais), respectively. In addition, since September 30, 2019, of the $8,496,076 debt outstanding as of such date,
$1,174,020 of debt has been converted by the respective holders into common stock, and $1,358,000 of debt has been repaid. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern.
The foregoing descriptions of the Notes and the Security Agreement do not purport to be complete and are
qualified in their entirety by reference to the full text of the Notes and the Security Agreement filed as Exhibit 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K.
Reference is made to Item 1.01 hereof.