The commencement of the Chapter 11 Case described in Item 1.03 above may constitute an event of default
that may accelerate the Company’s obligations under outstanding promissory notes in the aggregate approximate principal amount of up to $7,669,020 (collectively, the “Notes”).
Any efforts to enforce the payment obligations under the Notes are automatically stayed as a result of the
filing of the Chapter 11 Case, and the creditors’ rights of enforcement in respect of the Notes are subject to the applicable provisions of the Bankruptcy Code.
(e) On March 16, 2020, the Company and Mark Weinreb, its Chief Executive Officer, entered into an agreement (the “Weinreb Agreement”) pursuant to which, among other matters, the term of his employment agreement with the Company was extended to the earlier of (i) September 30, 2020 or (ii) the effective
date of a plan of liquidation of the Company.
The foregoing description of the Weinreb Agreement does not purport to be complete and is qualified in its
entirety by reference to the text of the Weinreb Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Cautionary Information Regarding Trading in the Company’s Securities
The Company cautions that trading in the Company’s securities during the pendency of the Chapter 11 Case is highly speculative and poses substantial
risks. Trading prices for the Company’s securities may bear little or no relationship to the actual recovery, if any, by the holders of the Company’s securities in the Chapter 11 Case. Based on the values for the Company’s business contemplated by
the Asset Purchase Agreement referred to herein, the Company expects that existing Company stockholders will receive no recovery at the end of the Chapter 11 Case, consistent with legal priorities.
Coventry Action
On March 11, 2020, in the action entitled Coventry Enterprises, LLC vs. BioRestorative Therapies, Inc., pending in the United States District Court of the Eastern District of New York (the “Court”), the Court ordered that the Company (i) convene and hold a special meeting, immediately and by no later than March 18, 2020, of the Board of Directors of the Company (the “Board”), for approval of the certain changes to the shares of the Company, as set forth below; (ii) approve a reverse split and/or a stock consolidation, solely
of the Company’s outstanding shares, at a ratio of 1,000 to 1, as being in the best interest of the Company; and (iii) approve of the continuation of the Company’s current total authorized shares of common stock to remain at 2,000,000,000 shares; and
(iv) approve of the Company’s decision to call a special meeting of shareholders of the Company, within ten days of the special meeting of the Board and by not later than March 25, 2020, to approve: a) such 1,000 to 1 reverse stock split of the
outstanding shares of its common stock; and b) such continuation of the authorized total of 2,000,000,000 shares, as approved by the Board and as being in the best interest of the Company; and (v) approve, as expeditiously as practicable and at the
Company’s sole cost and expense, the filing of such necessary and appropriate papers and instruments as may be required by the Securities and Exchange Commission (“SEC”),
the State of Delaware and/or state securities regulatory authorities, and/or by the self-regulatory organizations, as may be required to immediately implement such changes in the shares as set forth by the order. On March 18, 2020, the Board
considered the matter, and, based upon the Court order, determined to approve the foregoing items, including the 1,000 to 1 reverse split, subject to the Company having available funds to effectuate such items.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, as amended, based on our current expectations, estimates and projections about our operations, financial condition, results of operations, and liquidity. Statements containing words such as “may,”
“believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “estimate,” or similar expressions constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding expectations about the
timing and execution of the Company’s strategic transactions (including the contemplated sale of substantially all of the Debtor’s assets), and the operating expectations during the pendency of the Chapter 11 Case. Potential factors that could
affect such forward-looking statements include, among others, risks and uncertainties relating to the Chapter 11 Case, including, but not limited to, the Company’s ability to obtain Bankruptcy Court approval of motions filed in the Chapter 11 Case
(including, but not limited to, the DIP Motion and the Bidding Procedures Motion), the effects of the Chapter 11 Case on the Company and on the interests of various constituents, Bankruptcy Court rulings in the Chapter 11 Case and the outcome of
the Chapter 11 Case in general, the length of time the Company will operate under the Chapter 11 Case, risks associated with third-party motions in the Chapter 11 Case, the conditions to which the Company’s DIP Financing is subject and the risk
that these conditions may not be satisfied for various reasons, including for reasons outside of the Company’s control; uncertainty associated with evaluating and completing any strategic or financial alternative as well as the Company’s ability to
implement and realize any anticipated benefits associated with any alternative that may be pursued; the consequences of the acceleration of the Company’s debt obligations; the trading price and volatility of the Company’s common stock and the risks
related to trading on the OTC Pink Market and the other factors disclosed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors that May Affect Future Results and Financial
Condition” in the Company’s most recent Annual Report on Form 10-K filed with the SEC, as updated from time to time in our subsequent filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which
reflect management’s analysis only as of the date hereof. Such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that may cause actual performance and results to differ materially
from those predicted. Reported results should not be considered an indication of future performance. Except as required by law, the Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements
that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
The information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. The filing of this Item 7.01
of this report shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.
(d) Exhibits
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* Certain schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the SEC. The Company agrees to furnish a
supplemental copy of any omitted schedule or exhibit to the SEC upon request.