Case 8-20-71757-reg Doc 74 Filed 07/09/20 Entered 07/09/20 01:10:53
Hearing Date: August 3, 2020 At: 10:00 a.m.
JOINT MOTION FOR ORDER: (A) APPROVING ADEQUACY OF DISCLOSURE STATEMENT FOR THE DEBTOR’S AND AUCTUS FUND, LLC’S JOINT PLAN OF REORGANIZATION; (B) ESTABLISHING PROCEDURES FOR SOLICITATION AND TABULATION OF VOTES TO ACCEPT OR REJECT THE PLAN; (C) SCHEDULING A HEARING ON CONFIRMATION OF THE PLAN; (D) SHORTENING TIME FOR THE HEARING ON APPROVAL OF THE DISCLOSURE STATEMENT AND CONFIRMATION OF THE PLAN AND (E) APPROVING RELATED NOTICE PROCEDURES
To: THE HONORABLE ROBERT E. GROSSMAN UNITED STATES BANKRUPTCY JUDGE
BioRestorative Therapies, Inc. (the “Debtor”), the above-captioned debtor and debtor-in possession, and Auctus Fund, LLC (“Auctus,” and collectively with the Debtor, the “Proponents”) submit this joint motion (the “Motion”) seeking entry of an order under section 1121(d) of title 11, United States Code (the "Bankruptcy Code") for entry of an order (the “Disclosure Statement Order”):
(a) approving the adequacy of the Disclosure Statement for their Plan of Reorganization, dated July 8, 2020 [ECF Doc. No. 73] (the “Disclosure Statement”);
(b) establishing procedures for solicitation and tabulation of votes to accept or reject the Joint Plan of Reorganization, dated July 8, 2020 [ECF Doc. No. 72] (the “Plan”);
(c) scheduling hearings on shortened notice for the approval of the Disclosure Statement (the “Disclosure Statement
Hearing”) and confirmation of the Plan (the “Confirmation Hearing”); and
(d) approving related notice procedures. In support of the Motion, the
Proponents respectfully state as follows:
JURISDICTION
1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b).
2. The statutory predicates for the relief requested herein are Bankruptcy Code § 1125, Rules 3017, 3018 and 3020 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and Rules 3017-1 and 9077-1 of the Local Bankruptcy Rules for the Eastern District of New York.
BACKGROUND
3. On March 20, 2020 (the “Petition Date”), the Debtor commenced a case in this Court by the filing of a voluntary petition for relief under chapter 11 of the Bankruptcy Code.
4. The Debtor is a publicly traded company (Stock Symbol: BRTX) that develops therapeutic products and medical therapies using cell and tissue protocols, primarily involving adult stem cells. The Debtor’s website is at www.biorestorative.com. The Debtor is currently developing a Disc/Spine Program referred to as “brtxDISC”. Its lead cell therapy
candidate, BRTX-100, is a product formulated from autologous (or a person’s own) cultured mesenchymal stem cells collected from the patient’s bone marrow. The product is intended to be used for the non-surgical treatment of painful lumbosacral disc disorders. In developing BRTX 100, the Debtor obtained a license to use patent-pending technology for investigational adult stem cell treatment of disc and spine conditions, including protruding and bulging lumbar discs. The technology is an advanced stem cell injection procedure that may offer relief from lower back pain, buttock and leg pain, and numbness and tingling in the leg and foot. Moreover, that license also includes a patented investigational curved needle device that is a needle system
designed to deliver cells and/or other therapeutic products or materials to the spine and discs. Also as part of that license, the Debtor sublicenses a part of the licensed intellectual property back to the licensor which results in yearly revenues. In 2019, that revenue totaled
approximately $130,000.
5. In February 2017, the Debtor received authorization from the Federal Drug Administration to commence a Phase 2 clinical trial investigating the use of BRTX-100, the Debtor’s lead cell therapy candidate, in the treatment of chronic lower back pain arising from degenerative disc disease.
6. The Debtor is also engaging in research efforts with respect to a platform technology utilizing brown adipose (fat) for therapeutic purposes to treat type 2 diabetes, obesity and other metabolic disorders and has labeled this initiative its ThermoStem™ Program. Further,
the Debtor has licensed a patented curved needle device that is a needle system designed to deliver cells and/or other therapeutic products or material to the spine and discs or other potential sites. Patents related to the ThermoStem™ Program were issued, or are scheduled to be issued, to the Debtor by (i) the United States in September 2015, January 2019 and March 2020; (ii) Australia in April 2017 and October 2019; (iii) Japan in December 2017; and (iv) Israel in August 2019. Additionally, the Debtor was advised in April 2020 that a patent from the European Union was issued, with the company filing validations of that patent in the United Kingdom and eight different EU countries, including, but not limited Germany, Italy and France.
7. Additional information about the Debtor’s business and the events leading up to the Petition Date can be found in the “Declaration of Mark Weinreb Under Local Rule 1007-4 in Connection with Chapter 11 Filing, and Local Rule 9077-1 in Support of Certain ‘First Day’ Motions,” dated March 20, 2020 [ECF Doc. No. 3].
8. The Debtor is authorized to remain in possession of its property and to continue in the operation and management of its business as a debtor in possession under Bankruptcy Code §§ 1107 and 1108.
9. To date, no committee, trustee or examiner has been appointed in this case.
