Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of ~~August 12,~~November 14, 2022 ~~294,796~~477,610 shares of the registrant’s common stock were outstanding.

This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined under United States federal securities laws. These statements involve known and unknown risks, uncertainties, and other factors that may cause the Company’s actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these words. Although the Company believes that it has a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that these statements are based on a combination of facts and factors currently known by the Company and its projections of the future, about which it cannot be certain. As a result of these factors, the Company cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company, or any other person, that it will achieve its objectives and plans in any specified time frame, or at all. The Company does not undertake to update any of the forward-looking statements after the date of this Quarterly Report, except to the extent required by applicable securities laws.

	June 30, 2022			December 31, 2021
	(Unaudited)						(Unaudited)
	June 30, 2022			December 31, 2021			September 30, 2022			December 31, 2021
Assets

Current Assets
Cash	$	45,877		$	95,172		$	36,723		$	95,172
Accounts receivable		-			13,500			-			13,500
Patient financing receivable, current portion		40,299			43,900			32,111			43,900
Other receivables								2,981			-
Prepaid expenses		136,998			44,884			102,188			44,884
Total Current Assets		223,174			197,456			174,003			197,456

Property and equipment, net		23,641			38,374			22,018			38,374
Patient financing receivable, net of current portion		40,464			67,163			26,126			67,163
Other assets		18,412			18,412			18,412			18,412
Total assets	$	305,691		$	321,405		$	240,559		$	321,405

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable	$	699,358		$	585,291		$	842,767		$	585,291
Accrued liabilities		135,601			164,680			1,223,237			164,680
Other current liabilities		116,341			28,246			268,785			28,246
Notes payable, current portion		84,455			69,455			79,455			69,455
Convertible notes payable, related parties		1,969,174			1,969,174			1,969,174			1,969,174
Convertible notes payable		1,715,911			1,355,826			1,783,416			1,355,826
PPP Loan, current portion		-			66,275			-			66,275
Deferred revenue		-			414,025			-			414,025
Lease liability, current portion		99,369			94,805			87,828			94,805
Interest payable, related parties		200,371			98,055			242,648			98,055
Interest payable		155,138			75,048			195,725			75,048
Total Current Liabilities		5,175,718			4,920,880			6,693,035			4,920,880

Long-term Liabilities
Royalty obligation (see note 4)		1,697,000			-
Royalty liability								1,697,000			-
Lease liability, net of current portion		12,249			62,768			-			62,768
Total Long-term Liabilities		1,709,249			62,768			1,697,000			62,768

Total Liabilities		6,884,967			4,983,648			8,390,035			4,983,648

Stockholders’ Equity (Deficit)
Preferred Stock - $.001 par value: 1,000,000,000 shares authorized; Series A Preferred Stock - $.001 par value: 800,000,000 shares authorized, 494,579,119 and 501,887,534 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively.		494,578			501,887
Common stock - $.001 par value: 500,000,000 shares authorized, 257,282 and 166,394 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively.¹		257			164,199
Preferred Stock - $.001 par value: 1,000,000,000 shares authorized; Series A Preferred Stock - $.001 par value: 800,000,000 shares authorized, 438,776,170 and 501,887,534 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.								438,773			501,887
Common stock - $.001 par value: 500,000,000 shares authorized, 477,610 and 166,394 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively. ¹								477			164,199
Additional paid-in capital¹		48,481,350			43,700,084			49,246,179			43,700,084
Accumulated deficit		(55,555,461	)		(49,028,413	)		(57,834,905	)		(49,028,413	)
Total Stockholders’ Deficit		(6,579,276	)		(4,662,243	)		(8,149,476	)		(4,662,243	)

Total Liabilities and Stockholders’ Deficit	$	305,691		$	321,405		$	240,559		$	321,405

	2022			2021			2022			2021
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues	$	73,900		$	450,456		$	453,460		$	826,625		$	-		$	460,216		$	453,460		$	1,286,841
Cost of Sales		(30,097	)		(216,018	)		(116,602	)		(414,668	)		-			(138,786	)		(116,602	)		(553,454	)
Gross Profit		43,803			234,438			336,858			411,957			-			321,430			336,858			733,387

Operating Expenses
Salaries and related costs		279,513			586,119			626,732			1,247,894			221,304			534,752			848,036			1,782,646
Share based compensation		188,954			862,000			415,033			862,000			120,448			162,359			535,481			1,024,359
Loss on disposal of property and equipment		9,610			92,804			9,610			92,804			-			-			9,610			92,804
Acquired in process research and development														1,245,948			-			1,245,948			-
Other general and administrative		394,751			699,630			904,662			1,618,542			268,076			851,593			1,172,738			2,470,135
Total Operating Expenses		872,828			2,240,553			1,956,037			3,821,240			1,855,776			1,548,704			3,811,813			5,369,944

Operating Loss		(829,025	)		(2,006,115	)		(1,619,179	)		(3,409,283	)		(1,855,776	)		(1,227,274	)		(3,474,955	)		(4,636,557	)

Other Income (Expense)
Forgiveness of PPP loan														-			698,820			-			698,820
Warrant expense														(334,238	)		-			(334,238	)		-
Inducement expense		-			-			(3,024,872	)		-			-			-			(3,024,872	)		-
Loss on extinguishment of convertible notes payable		(2,196,100	)		-			(2,196,100	)		-			-			-			(2,196,100	)		-
Interest income		501,670			-			505,040			-			1,756			-			506,795			-
Interest expense		(111,758	)		(54,145	)		(187,480	)		(59,930	)		(91,186	)		(50,516	)		(278,665	)		(110,446	)
Other income (expense)		(52	)		2,255			(4,457	)		3,534
Other expense														-			(7,641	)		(4,457	)		(4,107	)
Total Other Income (Expense)		(1,806,240	)		(51,890	)		(4,907,869	)		(56,396	)		(423,668	)		640,663			(5,331,537	)		584,267

Net Loss	$	(2,635,265	)	$	(2,058,005	)	$	(6,527,048	)	$	(3,465,679	)	$	(2,279,444	)	$	(586,611	)	$	(8,806,492	)	$	(4,052,290	)

Net Loss attributable to common stockholders	$	(2,635,265	)	$	(2,058,005	)	$	(6,527,048	)	$	(3,465,679	)	$	(2,279,444	)	$	(586,611	)	$	(8,806,492	)	$	(4,052,290	)

Loss per share - Basic and Diluted¹	$	(11.97	)	$	(14.90	)	$	(29.87	)	$	(25.52	)
Loss per share - basic and diluted¹														(8.04	)		-			(34.07	)		(30.00	)
					��
Weighted average outstanding shares - basic and diluted		220,180			138,092			218,531			135,827
Weighted average outstanding shares -basic and diluted														283,579			142,408			258,483			140,074

For the three months and ~~six~~nine months ended ~~June~~September 30, 2021 and 2022

J	Shares			Amount			Shares		Amount		Capital		Deficit			Deficit
S																			Shares			Amount			Shares¹		Amount¹		Capital¹		Deficit			Deficit
Three months ended	Preferred Series A Stock						Common Stock¹				Additional Paid-in		Accumulated			Stockholders’			Preferred Series A Stock						Common Stock¹				Additional Paid-in		Accumulated			Stockholders’
June 30, 2021 and 2022	Shares			Amount			Shares		Amount		Capital¹		Deficit			Deficit
Balances - March 31, 2021		528,429,575		$	528,429			136,839	$	136,839	$	42,515,999	$	(45,636,780	)	$	(2,455,513	)
September 30, 2021 and 2022																			Shares			Amount			Shares		Amount		Capital¹		Deficit			Deficit
Balances - June 30, 2021																				520,305,884		$	520,305			144,963	$	144,963	$	43,377,999	$	(47,694,785	)	$	(3,651,518	)
Conversion of Series A Preferred Stock to Common Stock		(8,123,691	)		(8,124	)		8,124		8,124		-		-			-			(4,431,530	)		(4,431	)		4,431		4,431		-		-			-
Share based compensation		-			-			-		-		862,000		-			862,000			-			-			-		-		162,359		-			162,359
Net loss		-			-			-		-		-		(2,058,005	)		(2,058,005	)		-			-			-		-		-		(586,611	)		(586,611	)
Balances - June 30, 2021		520,305,884		$	520,305			144,963	$	144,963	$	43,377,999	$	(47,694,785	)	$	(3,651,518	)
Balances - September 30, 2021																				515,874,354		$	515,874			149,394	$	149,394	$	43,540,358	$	(48,281,396	)	$	(4,075,770	)

	2022			2021			2022			2021
	Six Months Ended June 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash Flows from Operating Activities
Net loss	$	(6,527,048	)	$	(3,465,679	)	$	(8,806,492	)	$	(4,052,290	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		5,958			13,559			10,086			13,859
Amortization of debt premium								(499,100	)		-
Inducement expense								3,024,872			-
Share based compensation expense		415,033			862,000			535,481			1,024,359
Inducement expense		3,024,872			-
Amortization of debt premium		(499,100	)		-
Loss on debt extinguishment								2,196,100			-
Gain on extinguishment of debt - PPP Loan								-			(698,820	)
Warrant expense								334,238			-
Bad debt expense		13,500			-			59,820			-
Loss on extinguishment of convertible notes payable		2,196,100			-
Expense of acquired IPR&D								1,245,948			-
Loss on disposal of property and equipment		9,610			92,804			9,610			92,804
Changes in operating assets and liabilities:
Accounts receivable		-			-			(46,320	)		(9,200	)
Patient financing receivable, current portion		3,601			(22,990	)		11,789			(35,080	)
Other receivables								(2,981	)		21,572
Prepaid expenses and other assets								(57,304	)		(968	)
Patient financing receivable, net of current portion		26,699			(42,470	)		41,037			(61,547	)
Prepaid expenses and other assets		(92,114	)		(30,445	)
Accounts payable		114,067			(51,277	)		235,876			37,759
Accrued liabilities		(29,079	)		(68,390	)		58,830			(89,296	)
Other liabilities		42,140			57,498
Other current liabilities								(24,739	)		(13,482	)
Deferred revenue		(414,025	)		(91,951	)		(414,025	)		(224,118	)
Interest payable, related parties								144,593			-
Interest payable		80,090			6,712			120,677			6,333
Interest payable, related party		102,316			-
Net Cash Used in Operating Activities		(1,527,380	)		(2,740,629	)		(1,822,004	)		(3,988,115	)

Cash Flows from Investing Activities
Purchase of property and equipment		-			(7,832	)		-			(7,832	)
Cash acquired in asset acquisition								469
Net Cash Used in Investing Activities		-			(7,832	)		469			(7,832	)

Cash Flows from Financing Activities
Proceeds from notes payable		15,000			1,554,220			67,500			-
Proceeds from convertible notes payable, related parties								-			1,584,665
Proceeds from convertible notes payable		372,500			1,070,118			437,500			1,091,080
Payment of debt financing costs		(13,250	)		-
Proceeds from warrants exercised related to inducement		1,170,110			-
Proceeds from warrants exercised								1,170,110			-
Proceeds from issuance of common stock								225,001			-
Payment on debt obligations								(57,500	)		-
Payment on debt financing costs								(13,250	)		-
Payment on PPP Loan		(66,275	)		-			(66,275	)		(13,230	)
Net Cash Provided by Financing Activities		1,478,085			2,624,338			1,763,086			2,662,515

Net Change in Cash		(49,295	)		(124,123	)		(58,449	)		(1,333,432	)

Cash - Beginning of period		95,172			1,640,645			95,172			1,640,645

Cash - End of period	$	45,877		$	1,516,522		$	36,723		$	307,213

Supplementary Cash Flow Information
Cash paid for interest	$	4,077		$	3,880		$	9,916		$	3,367

Non Cash Investing & Financing Activity
Non-cash investing and financing activities
Conversion of Series A Preferred Stock to Common Stock		7,309			17,804		$	63,114			22,235
Issuance of warrants pursuant to inducement agreements		2,993,872			-		$	2,993,872			-
Issuance of warrants for services rendered		31,000			-		$	31,000			-
Issuance of warrants pursuant to securities purchase agreement							$	334,238			-
Issuance of Common Stock pursuant to Jantibody acquisition							$	29,557			-

H-CYTE, Inc (“the Company”) is intended to continue as a hybrid-biopharmaceutical company dedicated primarily to developing new treatments for patients with chronic respiratory and pulmonary disorders. During the last three years, the Company has evolved into two separate divisions with its entrance into the biologics and device development space (“Biotech Division”). This division is complementary to the Company’s Lung Health Institute (LHI) autologous infusion therapy business (“Infusion Division”) and is focused on underserved disease states. H-CYTE is shiftingshifted its focus onto acquiring and developing early-stage companies or their technologies in the areas of therapeutics, medical devices, and diagnostics. The goal is to develop these companies and incubate their technologies to meaningful clinical inflection points.

On June 3, 2022, the Company closed its clinic in Scottsdale, Arizona. The Company has now closed all of its clinical operations in the autologous infusion therapy business which delivered treatments for patients with chronic respiratory and pulmonary disorders. The Company will continue to pursue regulatory approval of the device that was utilized in the treatment provided at the clinics. The Company also has a continued interest in the commercialization of the DenerveX device. The Company has begun to transform itself into a biologics and therapeutic device incubator company to bring new technologies to market.

The consolidated results for H-CYTE include the following wholly-owned subsidiaries: H-CYTE Management, LLC, Medovex Corp, Cognitive Health Institute, LLC, and Lung Institute Tampa, LLC and the results include Lung Institute Dallas, LLC (“LI Dallas”), Lung Institute Nashville, LLC (“LI Nashville”), Lung Institute Pittsburgh, LLC (“LI Pittsburgh”), and Lung Institute Scottsdale, LLC (“LI Scottsdale”), as Variable Interest Entities (“VIEs”). Additionally, H-CYTE Management, LLC was the operator and manager of the various Lung Health Institute (LHI) clinics: LI Dallas, LI Nashville, LI Pittsburgh, and LI Scottsdale. The LI Dallas and LI Pittsburgh clinics did not reopen in 2020 after the temporary closure of all LI clinics due to COVID-19. These two clinics will remain permanently closed. During the first quarter of 2022, the Company decided to close the LI Tampa and LI Nashville clinics. During the second quarter of 2022, the Company closed the LI Scottsdale clinic, the final LHI clinic.

On June 10, 2022, the Company amended (the “Amendment”) its Articles of Incorporation to effectuate a one-for-one thousand reverse stock split (the “Reverse Split”) of its common stock. The Reverse Split was approved by FINRA on June 10, 2022 and effectuated on June 13, 2022. Pursuant to the Amendment, the Company also reduced the authorized shares of common stock to 500,000,000. As a result of the Reverse Split, as of ~~June~~September 30, 2022, the Company has ~~257,282~~ 477,610shares of common stock outstanding and ~~494,579,119~~ 438,776,170shares of Series A Preferred Stock outstanding. As a result of the Reverse Stock Split, the Series A Preferred Stock conversion ratio is now one thousand shares of Series A Preferred Stock converts into one share of common stock. Accordingly, the ~~494,579,119~~ 438,776,170outstanding shares of Series A Preferred Stock are now convertible into an aggregate of ~~494,579~~ 438,776shares of common stock.

On September 7, 2022, the Company acquired all of the membership interests of Jantibody LLC (“Jantibody”), a Nevada limited liability company. Jantibody is focused on the development of novel proprietary immunotherapies targeted towards ovarian cancer, pancreatic cancer, and mesothelioma (see Note 9).

The coronavirus outbreak (“COVID-19”) has adversely affected the Company’s financial condition and results of operations. The impact of the COVID-19 outbreak on businesses and the economy in the United States is expected to continue to be significant. The extent to which the COVID-19 outbreak will continue to impact businesses and the economy is highly uncertain. Accordingly, the Company cannot predict the extent to which its financial condition and results of operation will be affected.

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency caused by a new strain of the coronavirus and advised of the risks to the international community as the virus spread globally. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The spread of COVID-19 coronavirus has caused public health officials to recommend precautions to mitigate the spread of the virus, especially as to travel and congregating in large numbers. In addition, certain states and municipalities have enacted quarantining regulations which severely limit the ability of people to move and travel.

In addition, the Company is uncertain of the full effect the pandemic will have on it for the longer term since the scope and duration of the pandemic is unknown, and evolving factors such as the level and timing of the distribution of efficacious vaccines across the world and the extent of any resurgences of the virus or emergence of new variants of the virus, such as the Delta variant and the Omicron variant, will impact the stability of economic recovery and growth. The Company may experience long-term disruptions to its operations resulting from changes in government policy or guidance; quarantines of employees, customers and suppliers in areas affected by the pandemic; and closures of businesses or manufacturing facilities critical to its business.

The Company’s Infusion Division develops and implements innovative treatment options in autologous cellular therapy (PRP-PBMC) to treat chronic lung disorders. Committed to an individualized patient-centric approach, this division consistently provides oversight and management of the highest quality care to the LHI clinics located in Tampa, Nashville, and Scottsdale, while producing positive medical outcomes following the strictest CDC guidelines. During the first quarter of 2022, the Company decided to close the clinics in Tampa and Nashville. During the second quarter of 2022, the Company closed its clinic in Scottsdale. The Company has now closed all of its clinical operations in the autologous infusion therapy division which delivered treatments for patients with chronic respiratory and pulmonary disorders.

During the year ended December 31, 2021, the Company completed a review of the R&D status regarding the exclusive product supply and services agreements with Rion, LLC (“Rion”) to develop and distribute (post U.S. Food & Drug Administration, the “FDA”, approval) a biologic combining its PRP-PBMC (“PRP”) technology with Rion’s exosomes (“EV”) technology for the treatment of chronic obstructive pulmonary disease (“COPD”). The Company has determined a single entity biologic from an alternative commercial source will be a more viable solution. The Company has decided to move away from Rion’s PRP technology and is progressing towards alternate biologics and therapeutic devices to meet the needs of the business.

As of June 30, 2022, the Company has closed all of the LHI clinics and has moved away from the Infusion Division as part of its future plans. The Company has also decided that the Biotech Division will begin to transform into a medical biosciences incubator ~~company~~division focusing on bringing new biologics and therapeutic device technologies to market for various health conditions.

The accompanying interim consolidated financial statements have been prepared based upon U.S. Securities and Exchange Commission rules that permit reduced disclosure for interim periods. Therefore, they do not include all information and footnote disclosures necessary for a complete presentation of the Company’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. The Company filed audited consolidated financial statements as of and for the fiscal years ended December 31, 2021 and 2020, which included all information and notes necessary for such complete presentation in conjunction with its 2021 Annual Report on Form 10-K.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

The results of operations for the interim period ended ~~June~~September 30, 2022 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021, which are contained in the Company’s 2021 Annual Report on Form 10-K. For further discussion refer to Note 2 – “Basis Ofof Presentation And Summary of Significant Accounting Policies” to the consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

The Company incurred net losses of approximately $~~2,635,000~~2,279,000 and $~~6,527,000~~8,806,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2022. The Company has historically incurred losses from operations and expects to continue to generate negative cash flows as it implements its plan around the Biosciences Division. The consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) as applicable to a going concern.

COVID-19 has adversely affected the Company’s financial condition and results of operations. The impact of the outbreak of COVID-19 on the economy in the U.S. and the rest of the world is expected to continue to be significant. The extent to which the COVID-19 outbreak will continue to impact the economy is highly uncertain and cannot be predicted. Accordingly, the Company cannot predict the extent to which its financial condition and results of operations will be affected.

The Company had cash on hand of approximately $~~46,000~~37,000 as of ~~June~~September 30, 2022, and approximately $~~3,000~~30,000, as of ~~August 12,~~November 14, 2022. The Company’s cash is insufficient to fund its operations over the next year and the Company is currently working to obtain additional debt or equity financing to help support working capital needs.

There can be no assurance that the Company will be able to raise additional funds or that the terms and conditions of any future financings will be workable or acceptable to the Company or its shareholders. If the Company is unable to fund its operations from existing cash on hand, operating cash flows, additional borrowings, or raising equity capital, the Company may not continue operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In January 2022, the Company offered certain warrant holders the opportunity to receive an additional warrant to purchase the Company’s Common Stock at $14.00 per share, for a period of five (5) years from issuance for the exercise of each existing warrant originally issued in April 2020 prior to March 31, 2021. As of ~~June~~September 30, 2022, the Company had eleven warrant holders exercise an aggregate of 83,579 warrants at $14.00 per share resulting in cash proceeds of approximately $1,170,000to the Company.

The Company filed a Registration Statement on Form S-1 registering the resale of the shares of common stock issuable upon exercise of the warrants issued in the April 2020 financing. The registration statement was declared effective on February 14, 2022.

On June 9, 2022, the Company entered into a securities purchase agreement for a total of $272,500 with two accredited investors. The notes issued are convertible into common stock at a 3535%% discount to the lowest trading price in the 20-day period prior to conversion. The notes bear interest at 1010%% and are due one year from issuance. For the first six (6) months, the Company has the right to prepay the notes at a premium of between 25% and 35% depending on when it is repaid.

On June 9, 2022, the Company also issued a promissory note for $100,000 to another accredited investor. This note bears interest at 15% (no matter when repaid) and converts at a discount of 25% of the price of a public offering or a 25% discount to the volume-weighted average price (VWAP) of the five (5) days prior to conversion.

On August 9, 2022, the Company entered into a securities purchase agreement for a total of $65,000 with an accredited investor. The note issued is convertible into common stock at a 35% discount to the lowest trading price in the 20-day period prior to conversion. The note bears interest at 10% and is due one year from issuance. For the first six (6) months, the Company has the right to prepay the notes at a premium of between 25% and 35% depending on when it is repaid.

On September 29, 2022, the Company entered into a securities purchase agreement with two accredited investors for the sale of shares of Common Stock and warrants (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the Company sold an aggregate of 112,500 shares of common stock and warrants to purchase 56,250 shares of Common Stock exercisable at $2.50 per share for gross proceeds of $225,001. All of the shares described in this Current Report on Form 8-K are being offered and issued to accredited investors in reliance upon exemptions from the registration requirements under Section 4(a)(2) under the Securities Act of 1933, as amended (“Securities Act”), and Rule 506 of Regulation D promulgated thereunder.

On January 12, 2021, Mr. Raymond Monteleone was appointed as Chairman of the Board, Audit Committee Chair, and Compensation Committee Chair. There are understandings between the Company and Mr. Monteleone for him to receive $5,000per month to serve on the Board of Directors and an additional $2,500per quarter to serve as Chairman of the Board, Audit Committee Chair, and Compensation Committee Chair. Effective January 1, 2022, Mr. Monteleone receives $7,500 per month to serve on the Board of Directors and an additional $2,500per quarter to serve as Chairman of the Board, Audit Committee Chair, and Compensation Committee Chair. Effective July 1, 2022, due to lack of working capital, Mr. Monteleone receives $3,750 per month to serve on the Board of Directors and to serve as Chairman of the Board, Audit Committee Chair, and Compensation Committee Chair. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company expensed $~~22,500~~ 13,750and $~~47,500~~63,750, respectively, for board of director fees to Mr. Monteleone. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company expensed $~~17,500~~18,000 and $~~35,000~~ 53,000respectively, for board of director fees to Mr. Monteleone.

Mr. Michael Yurkowsky entered into an oral agreement with the Company on October 1, 2020, in which Mr. Yurkowsky will receive $4,167per month to serve on the Board of Directors. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company expensed $~~12,500~~ 13,000and $~~25,000~~ 38,000respectively, for board of director fees to Michael Yurkowsky. On December 1, 2021, the Board of Directors of the Company appointed Michael Yurkowsky to serve as the Company’s Chief Executive Officer. Upon Mr. Yurkowsky’s appointment as CEO in December 2021, the Company terminated his payments for serving on the Board of Directors.

On January 12, 2021, Mr. William Horne stepped down as Chairman of the Board. Mr. Horne will remain a member of the Board. Effective March 1, 2021, the Company entered into an oral agreement with Mr. Horne in which Mr. Horne will receive $4,167 per month to serve on the Board of Directors. Mr. Horne agreed to continue to defer the $108,000 in base salary deferred by him in 2018 until such time as there is a positive cash flow to meet the Company’s financial obligations and then the Company and Mr. Horne will work together in good faith to negotiate a payment plan for such deferred salary. Effective December 1, 2021, Mr. Horne will receive $5,000 per month to serve on the Board of Directors. Effective July 1, 2022, due to lack of working capital, Mr. Horne receives $2,500 per month to serve on the Board of Directors. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company expensed $~~15,000~~7,500 and $~~35,000~~42,500, respectively, in board of director fees to Mr. Horne. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company expensed $~~12,500~~13,000 and $~~17,000~~29,000, respectively, for board of director fees to Mr. Horne.

Mr. Richard Rosenblum entered into an oral agreement with the Company effective January 17, 2022, in which Mr. Rosenblum will receive $5,000per month to serve on the Board of Directors. Effective July 1, 2022, due to lack of working capital, Mr. Rosenblum receives $2,500per month to serve on the Board of Directors. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company expensed $~~15,000~~7,500 and $~~27,500~~35,000, respectively. ~~respectively, in board of director fees to Mr. Rosenblum.~~

Mr. Matthew Anderer entered into an oral agreement with the Company effective January 17, 2022, in which Mr. Anderer will receive $5,000per month to serve on the Board of Directors. Effective July 1, 2022, due to lack of working capital, Mr. Anderer receives $2,500per month to serve on the Board of Directors. For the three months and ~~six~~nine months ended ~~June~~September 30, 2022, the Company expensed $~~15,000~~7,500 and $~~27,500~~35,000, respectively.~~, respectively, in board of director fees to Mr. Anderer.~~

On April 1, 2021, the Company, entered into a Secured Convertible Note Purchase Agreement (the “April 2021 Note Purchase Agreement”) with five (5) investors (the “Holders”). Pursuant to the terms of the April 2021 Note Purchase Agreement, the Company sold promissory notes in the aggregate principal amount of $2,575,000 maturing on June 30, 2022 with an annual interest rate of 8%. The Notes are convertible into shares of Common Stock at a discount of 20% to the price paid for such New Securities in the next round of financing that meets the definition of Qualified Financing as defined in the April 2021 Note Purchase Agreement. The Notes are secured by the assets of the Company under a security agreement with the Holders. The lead investor of the April 2021 Note Purchase Agreement, FWHC Bridge, LLC, advanced $1,500,000 of the total amount to the Company. FWHC Bridge, LLC is an affiliated entity of FWHC, LLC, which is a principal stockholder and related party of the Company. An additional affiliate of FWHC, LLC provided an additional $25,000 as part of the April 2021 Note Purchase Agreement.

On October 14, 2021, the Company entered into the Second Closing Bring Down Agreement (the “October 2021 Note Purchase Agreement”) whereby the five (5) investors who had entered into the April 2021 Note Purchase Agreement purchased new notes in the Company in the aggregate principal amount of $750,000. The Notes are due and payable on June 17, 2022 and bear interest at an annual rate of 8%. The Notes are convertible into shares of Common Stock at a discount of 20% to the price paid for such New Securities in the next financing that meets the definition of a Qualified Financing as defined in the Note Purchase Agreement. The Notes are secured by all of the assets of the Company under a security agreement with the Holders. The lead investor of the October 2021 Note Purchase Agreement, FWHC Bridge, LLC, advanced $437,000 of the total amount to the Company. FWHC Bridge, LLC is an affiliated entity of FWHC, LLC, which is a principal stockholder and related party of the Company. An additional affiliate of FWHC, LLC provided an additional $7,000 as part of the October 2021 Note Purchase Agreement. Management is currently working with the noteholders on the extension of the maturity of the outstanding notes.

On February 22, 2022, the Company entered into a Debt Conversion Agreement (the “Amendment Agreement”) which i) provided for an additional round of convertible debt financing (“Tranche 2 Notes”) of up to $500,000 and ii) amended the conversion price on the convertible notes issued April 1, 2021 and October 8, 2021 ~~(Tranche~~(“Tranche 1 Notes”) from 80% of the price paid in a Qualified Financing (proceeds of at least $15 million), to the lesser of (x) $0.002 and (y) the price paid in a Qualified Financing (proceeds of at least $10 million). The Amendment Agreement also provides the following Milestone Payments:

The Milestone Payments are not to exceed $2 million, and the Amendment Agreement also specifies that a Qualified Financing will not occur prior to the closing of the acquisition of Jantibody, LLC.

The Company evaluated the Amendment Agreement under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that probability of having to pay a Milestone payment was minimal and the change in the fair value of the conversion feature was not material. Since the Amendment did not cause a material change in cash flows, extinguishment accounting was not applicable.

On April 29, 2022, the Company entered into an Amended and Restated Note Conversion Agreement (the “Note Conversion Agreement”) with certain holders of its Tranche 1 Notes (i) providing for a conversion price equal to the lesser of (x) $0.002 per share (pre-split) and (y) the price per share paid by the investors in a Qualified Financing for such New Securities purchased for cash and not through conversion of Notes (as such terms are defined in the Note Conversion Agreement), in each case subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization, (ii) automatic conversion upon the occurrence of a Qualified Financing, and (iii) amendment of the maturity date from March 31, 2022 to June 17, 2022 (the “New Notes”). Upon the effectiveness of the Company’s 1,000-1 reverse split, the conversion price adjusted to the lesser of (a) the price in the Qualified Financing or (b) $2.00 per ~~share.~~share. The New Notes also provided the investors with Royalty Payments equal to 15% of all net sales generated by the Company with respect to the sale of products or services associated with the 510(k) Notification related to the Company’s autologous cellular therapy (PRP-PBMC) to treat chronic lung disorder. The Royalty Payments are in lieu of the Milestone payments but are perpetual and there is no limit to the aggregate amount of Royalty Payments that may be paid.

Due to changes in key provisions of the Tranche 1 Notes, the Company analyzed the before and after cash flows between the (i) fair value of the New Notes and (ii) reacquisition price of the Tranche 1 Notes prior to the (A) change in the maturity date from March 31, 2022 to June 17, 2022, (B) change in the conversion price to the lesser of (x) $2.00 and (y) the price paid in a Qualified Financing, and (C) the fair value of the potential Royalty Payments, to determine whether these changes resulted in a modification or extinguishment of the Tranche 1 Notes.

The Company used a discounted cash flow method with Monte Carlo Simulation to value the Royalty Payments. Future Royalty Payments were estimated based on management’s best estimate of future cash flows under various scenarios which were discounted to present value using a risk-adjusted rate of 65%.

Based on the before and after cash flows of each note, the change was considered significantly different. Consequently, the New Notes were accounted for as a debt extinguishment of the Tranche 1 Notes and a new debt issuance of the New Notes. The Company recorded a $~~2.1~~2.2 million loss upon extinguishment of debt in the ~~three~~nine months ended ~~June~~September 30, 2022, which was comprised of the following:

The Note Conversion Agreement also provided for the consummation of a Tranche 2 Financing (the “Tranche 2 Notes”) subject to (i) the aggregate principal amount of indebtedness represented by the Tranche 2 Notes being capped at $500,000 and (ii) Tranche 2 Notes’ being an unsecured obligation of the Company and expressly subordinate in all respects to all indebtedness of the Company under the Notes and including language in which the holders of such Tranche 2 Notes acknowledge, confirm and agree to the foregoing subordination terms. Pursuant to the terms of the Note Conversion Agreement, the Investors have agreed not to sell any capital stock of the Company for a period of 12 months following the Qualified Financing.

On June 9, 2022, the Company entered into a securities purchase agreement for a total of $272,500 with two accredited investors. The notes issued are convertible into common stock at a 35% discount to the lowest trading price in the 20-day period prior to conversion. The notes bear interest at 10% and are due one year from issuance. For the first six months, the Company has the right to prepay the notes at a premium of between 25% and 35% depending on when it is ~~repaid.~~repaid.

The Company also issued a promissory note for $100,000to another accredited investor. This note bears interest at 15% (no matter when repaid) and converts at a discount of 25% of the price of a public offering or a 25% discount to the VWAP of the five (5) days prior to ~~conversion.~~conversion.

The embedded features in the Tranche 2 Notes were analyzed under ASC 815 to determine if they required bifurcation as derivative instruments. To be a derivative, one of the criteria is that the embedded component must be net-settleable. While the Company’s Common Stock was traded on an exchange at the time of the transaction, the underlying shares are not readily convertible into cash since there is insufficient daily trading volume for the holders to convert the Tranche 2 Notes into Common Stock without significantly affecting the share price. Accordingly, the embedded derivatives, including the embedded conversion feature, did not meet the definition of a derivative, and therefore, did not require bifurcation from the host instrument. Certain default put provisions, including a default put and default interest, were not considered to be clearly and closely related to the host instrument but the Company concluded that the value of these provisions was de minimus at inception. The Company will reconsider the value of these provisions each reporting period to determine if the value becomes material to the financial statements.

The Company chose to early adopt effective January 1, 2021, ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contract in Entity’s Own Equity. Thus, the April 2021 and October 2021 Note Purchase Agreements did not require consideration of a beneficial conversion feature and were accounted for solely as debt on the balance sheets.

In January 2022, the Company offered certain warrant holders the opportunity to receive an additional warrant to purchase the Company’s Common Stock at $14.00 per share, for a period of five (5) years from issuance for the exercise by March 31, 2022 of each existing warrant originally issued in April 2020. As of ~~June~~September 30, 2022, the Company had eleven warrant holders exercise an aggregate of 83,579 warrants at $14.00 per share resulting in cash proceeds of approximately $1,170,000 to the Company.

On June 10, 2022, the Company amended (the “Amendment”) its Articles of Incorporation to effectuate a one-for-one thousand reverse stock split (the “Reverse Split”) of its common stock. The Reverse Split was approved by FINRA on June 10, 2022 and effectuated on June 13, 2022. Pursuant to the Amendment, the Company also reduced the authorized shares of common stock to 500,000,000. As a result of the Reverse Split, the Company has approximately ~~257,282~~477,610 shares of common stock outstanding and ~~494,579,119~~438,776,170 shares of Series A Preferred Stock outstanding. As a result of the Reverse Stock Split, the Series A Preferred Stock is convertible at a ratio of one thousand shares of Series A Preferred Stock into one share of common stock. Accordingly, the ~~494,579,119~~438,776,170 outstanding shares of Series A Preferred Stock are now convertible into an aggregate of ~~494,579~~438,776 shares of common stock.

The following table summarizes the Company’s common and preferred stock outstanding by class. The number of common stock shares has been adjusted to reflect a one-for-one thousand reverse stock split that became effective on June 13, 2022.

	June 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Common Stock		257,282		166,394		477,610		166,394
Series A Preferred Stock		494,579,119		501,887,534		438,776,170		501,887,534

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, ~~3,650,685~~55,802,949 and ~~7,308,415~~63,111,364 shares of Series A Preferred Stock were converted to ~~3,651~~55,805 and ~~7,309~~63,114 shares of Common Stock at the request of certain Series A Preferred Shareholders, respectively.

Holders of Series A Preferred Stock (“Series A Holders”) have the right to receive notice of any meeting of holders of common stock and to vote upon any matter submitted to a vote of the holders of common stock. Each Series A Holder shall vote on each matter on an as converted basis submitted to them with the holders of common stock.

Series A Preferred Stock converts to common stock at a one-for-one thousand ratio immediately upon request of the Series A Holder.

Series A Preferred Stock does not have preferential treatment over common stock shareholders if the Company liquidates or dissolves.

The Company utilizes the Black-Scholes valuation method to recognize stock-based compensation expense over the vesting period. The expected life represents the period that the stock-based compensation awards are expected to be outstanding.

On April 1, 2021, the Board of Directors of the Company approved and granted to certain directors and officers of the Company an aggregate of 54,750 stock options of which4,750 were immediately vested on the date of grant. Each option granted has an exercise price of $70.00 per share and an expiration date of ten years from the date of grant. These options are not included in the Company’s current stock option plan as they were granted outside of the plan.

The Board of Directors decided not to renew the former CEO’s (Robert Greif) employment contract; therefore, the unvested shares were forfeited resulting in a reduction of share-based compensation of approximately $205,000 for the period ended September 30, 2021 that was recognized during the period ended June 30, 2021.

On June 10, 2022, the Company amended its Articles of Incorporation to effectuate a one-for-one thousand reverse stock split of its common stock. The Reverse Split was approved by FINRA on June 10, 2022 and effectuated on June 13, 2022.

At ~~June~~September 30, ~~2021,~~2022, ~~55,135~~29,635 options were outstanding and ~~5,718~~20,510 were vested. At ~~June~~September 30, ~~2022,~~2021, 29,635options were outstanding and ~~19,364~~ 14,802were vested. For the three months and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recognized approximately $~~73,000~~ 61,000and $~~185,000~~ 246,000 in stock-based compensation expense, respectively, which is included in share based compensation. For ~~both~~ the three months and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recognized approximately $~~862,000~~162,000 and $1,024,000in stock-based compensation expense, respectively, which is included in share based compensation. At ~~June~~September 30, 2022, the Company has approximately $~~267,000~~ 206,000of unrecognized compensation costs related to non-vested stock options, which is expected to the recognized over a weighted average period of approximately ~~2.40~~2.17 years.

The following is a summary of stock option activity for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2022:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)		Shares			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)
Outstanding at December 31, 2020		410		$	1,390.00		6.72		410		$	1,390.00		6.72
Granted		54,750			70.00		9.75		54,750			70.00		9.50
Expired/Cancelled		(25	)		216.00		—		(25,525	)		70.00		—
Outstanding at June 30, 2021		55,135		$	80.00		9.73
Outstanding at September 30, 2021									29,635		$	100.00		9.41

Exercisable at June 30, 2021		5,718		$	160.00		9.52
Exercisable at September 30, 2021									14,802		$	100.00		9.41

Outstanding at December 31, 2021		29,635		$	86.48		9.20		29,635		$	86.48		9.20
Granted		-			-		-		—			—		—
Outstanding at June 30, 2022		29,635		$	86.48		8.71
Outstanding at September 30, 2022									29,635		$	86.48		8.46

Exercisable at June 30, 2022		19,364		$	95.22		8.69
Exercisable at September 30, 2022									20,510		$	93.81		8.44

The following is a summary of the Company’s non-vested shares for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2022:

	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2020		-		$	-		-		$	-
Granted		54,750			60.00		54,750			30.00
Vested		(5,333	)		50.00		(14,417	)		50.00
Non-vested at June 30, 2021		49,417		$	60.00
Forfeited							(25,500	)		70.00
Non-vested at September 30, 2021							14,833		$	110.00

Non-vested at December 31, 2021		14,250		$	60.00		14,250		$	60.00
Vested		(3,979	)		54.43		(5,125	)		54.56
Non-vested at June 30, 2022		10,271		$	55.54
Non-vested at September 30, 2022							9,125		$	55.61

Basic loss per share is computed on the basis of the weighted average number of shares outstanding for the reporting period. Diluted loss per share is computed on the basis of the weighted average number of common shares plus dilutive potential common shares outstanding using the treasury stock and if-converted methods, as applicable. Any potentially dilutive securities are antidilutive due to the Company’s net losses.

The Company excluded the following securities from the calculation of basic and diluted net loss per share as the effect would have been antidilutive:

	2022		2021		2022		2021
	For the Six Months Ended June 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Options to purchase common stock (in the money)		-		4,977
Warrants to purchase common stock (in the money)		384,694		386,908		56,250		385,033
Series A Preferred Stock convertible to common stock		494,579		520,306		438,776		515,874
Total		879,273		912,191		495,026		900,907

Excluded from the above table are ~~2,196~~ 384,788warrants and 29,635stock options for the ~~six~~nine months ended ~~June~~September 30, 2022 and ~~23,149~~ 22,608warrants and ~~385~~ 29,635stock options for the ~~six~~nine months ended ~~June~~September 30, 2021 as they are out of the money (exercise price greater than the stock price). Inclusion of such would be anti-dilutive. As a result of the Reverse Stock Split, the Series A Preferred Stock is convertible at a ratio of one thousand shares of Series A Preferred Stock into one share of common ~~stock.~~stock. Accordingly, the ~~494,579,119~~438,776,170 outstanding shares of Series A Preferred Stock are convertible into an aggregate of~~494,579~~ 438,776 shares of common stock at ~~June~~September 30, 2022.

On December 23, 2021, the Company entered into an employment agreement (the “Employment Agreement”) with Michael Yurkowsky, the Company’s Chief Executive Officer, to continue to serve as the Chief Executive Officer of the Company. Under the Employment Agreement, which commenced on December 1, 2021 (the “Effective Date”) and has a term of one year from the Effective Date (the “Employment Period”), Mr. Yurkowsky will receive a base salary of $180,000 per year. Upon the expiration of the Employment Period, Mr. Yurkowsky’s employment with the Company will be on an at-will basis.

In addition to his base salary, Mr. Yurkowsky may receive a one-time cash bonus in gross amount equal to $100,000 if (i) the Company’s stock is listed and quoted on the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, or the New York Stock Exchange; or (ii) the Company secures and receives financing of at least $10,000,000.

As additional compensation, Mr. Yurkowsky shall receive shares of common stock of the Company representing 1% of the Company’s fully diluted equity as of the grant date if the Company achieves a market capitalization of at least $250 million for 60 consecutive days during the Employment Period (the “Equity Award”). If the Company achieves a market capitalization of at least $500million for 60 consecutive days during the Employment Period, the executive shall receive an additional Equity Award of 1%, such that he has in the aggregate received shares of common stock of the Company representing 2% of the Company’s fully diluted equity as of the date of grant. These market conditions were reflected in the grant date fair value of the award as required under ASC 718 Compensation-Stock Compensation.

The Equity Award was measured at fair value on its grant date using a Monte Carlo simulation model. The Monte Carlo simulation model includes assumptions for the expected term, volatility, and dividend yield, each of which are determined in reference to the Company’s historical results. The Company will recognize aggregate stock-based compensation expense of approximately $328,000 related to the Equity Award on a straight-line basis over the derived service period determined by the Monte Carlo simulation model, which was 0.71 years. During the three and ~~six~~nine month period ending ~~June~~September 30, 2022, the Company recognized approximately $~~114,000~~60,000 and $~~116,000~~290,000, respectively, in compensation expense related to the Equity Award. If the market capitalization targets are met sooner than the derived service period, the Company will adjust its stock-based compensation to reflect the cumulative expense associated with the vested Equity Award. The Company will recognize expense if the requisite service is provided, regardless of whether the market conditions are achieved.

The Company entered into a consulting agreement with Tanya Rhodes of Rhodes & Associates, Inc, effective June 15, 2020, to serve as the Chief Science Officer of the Company. The agreement has a minimum term of six months with an average fee of $21,000 per month plus expenses which increases 5% per month on January 1 of each calendar year unless an alternative retainer amount is negotiated and agreed upon by both parties. The Company extended the contract on January 1, 2021, resulting in monthly expenses of $22,500 plus expenses for services rendered. As of January 1, 2022, Ms. Rhodes is continuing to receive $22,500 and is engaged on a ~~month to month~~month-to-month basis.

The Company entered into a consulting agreement with Alpha IR Group on March 1, 2022, to provide investor relations to the Company. The agreement is for twelve months with an average service fee of $9,750 per month.

From time to time, the Company may be involved in routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate amount of liability, if any, for any claims of any type (either alone or in the aggregate) may materially and adversely affect the Company’s financial condition, results of operations, and liquidity. In addition, the ultimate outcome of any litigation is uncertain. Any outcome, whether favorable or unfavorable, may materially and adversely affect the Company due to legal costs and expenses, diversion of management attention, and other factors. The Company expenses legal costs in the period incurred. The Company cannot assure that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against the Company in the future, and these matters could relate to prior, current or future transactions or events.

The Company is involved in a lawsuit with Sinclair Broadcast Group, Inc. (“Sinclair”) which was filed on September 8, 2020, in the Circuit Court for the Thirteenth Judicial Circuit in and for Hillsborough County, Florida. Sinclair has filed suit alleging breach of contract for advertising services in the amount of approximately $75,000 plus interest and costs. The Company has retained legal counsel for its defense against the suit. The amount is recorded in accounts payable as of ~~June~~September 30, 2022.

The Company is involved in a lawsuit with ITN Networks, LLC (“ITN”) which was filed on July 22, 2021, in the Circuit Court for the Thirteenth Judicial Circuit in and for Hillsborough County, Florida. ITN has filed suit alleging breach of contract for advertising services in the amount of approximately $75,000 plus interest and costs. The Company has retained legal counsel for its defense against the suit. The amount is recorded in accounts payable as of ~~June~~September 30, 2022.

Notes payable were assumed in the Merger (for further discussion, see Note 1 - “Overview” to the consolidated financial statements in the Company’s 2020 Annual Report on Form 10-K) and are due in aggregate monthly installments of approximately $5,800 and carry an interest rate of 5%. Each note originally had a maturity date of August 1, 2019. The Company finalized an eighteen-month extension to March 1, 2021. The promissory notes have an aggregate outstanding balance of approximately $69,000 at June 30, 2022 and December 31, 2021. The Company has not made payments on these notes since February 10, 2020, due to COVID-19. On April 19, 2022, the Company entered into a promissory note modification agreement with the Lender extending the maturity date of the notes to April 1, 2024. The modification agreement also reduces the interest rate from 5% to 3% and requires a monthly payment of $1,000 per month with a balloon payment at the end of the modified term.

On April 29, 2020, the Company issued a promissory note in the principal amount of $809,082 to the Bank of Tampa in connection with a loan in such amount made under the Paycheck Protection Program (“PPP Loan”). The PPP Loan bears an interest rate of 1% per annum and matures on April 29, 2022. The Company elected to use a 24-week Covered Period, per the SBA Paycheck Protection Program guidelines, which ended on October 14, 2020.

The Company did apply for loan forgiveness in an amount equal to the sum of the following costs incurred by the Company:

The Company received notification from the Small Business Administration (“SBA”), dated August 17, 2021, notifying it that $689,974 in principal and $8,847 in interest was forgiven under the guidelines of the Paycheck Protection Program. As of ~~June~~September 30, 2022, the PPP loan was paid in full.

A summary of the Company’s warrant issuance activity and related information for the ~~six~~nine months ended ~~June~~September 30, ~~2022~~2021 and ~~2021~~2022 is as follows:

	Shares			Weighted Average Exercise Price			Weighted Average Remaining Contractual Life		Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Outstanding and exercisable at December 31, 2020		413,424		$	15.00			10.30		413,424		$	15.00		10.30
Expired		(3,367	)		(315.16	)		-		(5,783	)		33.00		—
Outstanding and exercisable at June 30, 2021		410,057		$	15.12			8.63
Outstanding and exercisable at September 30, 2021										407,641			58.00		8.42

Outstanding and exercisable at December 31, 2021		406,301		$	34.88			8.17		406,301		$	34.88		8.17
Expired		(20,411	)		(372.12	)		-		(22,513	)		373.85		—
Exercised		(83,579	)		14.00			-		(83,579	)		14.00		—
Granted		84,579			14.00			4.64		140,829			9.41		4.63
Outstanding and exercisable at June 30, 2022		386,890		$	19.41			7.32
Outstanding and exercisable at September 30, 2022										441,038		$	12.52		6.84

The fair value of all warrants issued are determined by using the Black-Scholes valuation technique. The inputs used in the Black-Scholes valuation technique to value each of the warrants as of their respective issue dates are as follows:

The fair value of warrants issued during the ~~six~~three and nine months ended ~~June~~September 30, 2022 totaled approximately $~~3,000,000~~334,000 ~~which~~and is included in warrant expense. The fair value of warrants issued as a result of the warrant inducement during the three and nine months ended September 30, 2022 totaled approximately $0 and $3,024,000, respectively, and is included in inducement expense. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.

If an acquisition is determined to be a business combination as indicated in ASC 805, Business Combinations, the assets acquired, and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. The Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired.

If an acquisition is determined to be an asset acquisition, the Company accounts for the transaction under ASC 805-50, which requires the cost of the asset acquisition, including transaction costs, to be allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Assets acquired as part of an asset acquisition that are considered to be in-process research and development (IPR&D) are immediately expensed unless there is an alternative future use in other research and development projects. Goodwill is not recognized in an asset acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values (excluding non-qualifying assets). If the cost of the asset acquisition is less than the fair value of the net assets acquired, no gain is recognized in earnings.

Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired). Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.

Pursuant to the Jantibody Agreement, the Company issued the equity holders of Jantibody an aggregate of 52,023 shares of the Company’s common stock which represented 15% of the Company’s common stock on a fully diluted basis at the time of the transaction. In addition, for every share of the Company’s common stock issued as a result of the future conversion of the Company’s dilutive instruments, including Series A preferred stock, warrants, stock options, and convertible notes, the Jantibody members will receive 15% of the aggregate number of shares issued (the “Anti-Dilution” shares). The Anti-Dilution shares will be issued before the end of each fiscal quarter.

The Company has agreed to issue the Jantibody holders an additional 2.0% of the Company’s common stock then outstanding upon the enrollment of the first patient in a Phase I FDA trial and additional 3.0% of the Company’s then outstanding common stock on a fully diluted basis upon the enrollment of the first patient in a Phase [III] FDA trial. The Company determined the contingent consideration was not subject to derivative accounting and will be recognized when the contingency is resolved, and the consideration is paid or becomes payable as outlined in ASC 450, Contingencies.

The Company determined this transaction represented an asset acquisition as defined by ASC 805, Business Combinations, as substantially all of the value was in a single in-process research and development (“IPR&D”) group, which included the small molecule drug CXCR4 inhibitor, AMD3100, and/or checkpoint inhibitors (CPI) for anti-cancer immune modulation. As a result, the consideration transferred was allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their relative fair values resulting in approximately $1,240,000 being assigned to the IPR&D asset and approximately $1,000,000 to assumed liabilities. The liabilities assumed were current accounts payable and as such were recorded a book value.

The purchase price of approximately $247,000 represented 52,023 shares of the Company’s common stock, 344,159 Anti-Dilution shares, and direct transaction costs of $21,600. The purchase price was allocated, on a relative fair value basis, to the acquired intellectual property, and the acquired net assets as follows:

The IPR&D had not yet reached technological feasibility and had no alternative future use; thus, the purchased IPR&D asset and related costs were expensed immediately subsequent to the acquisition within the consolidated statements of operations.

~~On August 9, 2022,~~Pursuant to the Purchase Agreement, the Company ~~entered into a securities purchase agreement for a total~~sold an aggregate of $~~65,000~~15,000 ~~with two accredited investors. The notes issued are convertible into~~shares of common stock ~~at a~~and warrants to purchase ~~35%~~ ~~discount to the lowest trading price in the 20-day period prior to conversion. The notes bear interest at~~ ~~10%~~ ~~and are due one year from issuance.~~ ~~For the first six (6) months, the Company has the right to prepay the notes at a premium of between 25% and 35% depending on when it is repaid.~~

~~As of August 10, 2022, an additional~~ ~~37,514,299~~ ~~shares Series A Preferred Stock was converted into~~ ~~37,514~~7,250 shares of Common Stock exercisable at ~~the request~~$2.50 per share for gross proceeds of ~~certain Series A Preferred Stockholders.~~$30,000.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report. Historical results and trends that might appear in this Quarterly Report should not be interpreted as being indicative of future operations.

The consolidated results for H-CYTE include the following wholly-owned subsidiaries: H-CYTE Management, LLC, Medovex Corp, Cognitive Health Institute, LLC, and Lung Institute Tampa, LLC and the results include Lung Institute Dallas, LLC (“LI Dallas”), Lung Institute Nashville, LLC (“LI Nashville”), Lung Institute Pittsburgh, LLC (“LI Pittsburgh”), and Lung Institute Scottsdale, LLC (“LI Scottsdale”), as Variable Interest Entities (“VIEs”). Additionally, H-CYTE Management, LLC is the operator and manager of the various Lung Health Institute (LHI) clinics: LI Dallas, LI Nashville, LI Pittsburgh, and LI Scottsdale. The LI Dallas and LI Pittsburgh clinics did not reopen in 2020 after the temporary closure of all LI clinics due to COVID-19. These two clinics will remain permanently closed. During the first quarter of 2022, the Company decided to close the LI Tampa and LI Nashville clinics. During the second quarter of 2022, the Company closed the LI Scottsdale clinic, the final LHI clinic.

On June 10, 2022, the Company amended (the “Amendment”) its Articles of Incorporation to effectuate a one-for-one thousand reverse stock split (the “Reverse Split”) of its common stock. The Reverse Split was approved by FINRA on June 10, 2022 and effectuated on June 13, 2022. Pursuant to the Amendment, the Company also reduced the authorized shares of common stock to 500,000,000. As a result of the Reverse Split, as of ~~June~~September 30, 2022, the Company has ~~approximately 257,282~~477,610 shares of common stock outstanding and ~~494,579,119~~438,776,170 shares of Series A Preferred Stock outstanding. As a result of the Reverse Stock Split, the Series A Preferred Stock conversion ratio is ~~convertible at a ratio of~~now one thousand shares of Series A Preferred Stock converts into one share of common stock. Accordingly, the ~~494,579,119~~438,776,170 outstanding shares of Series A Preferred Stock are now convertible into an aggregate of ~~494,579~~438,776 shares of common stock.

COVID-19 has adversely affected the Company’s financial condition and results of operations. The impact of the COVID-19 outbreak on businesses and the economy in the United States is expected to continue to be significant. The extent to which the COVID-19 outbreak will continue to impact businesses and the economy is highly uncertain. Accordingly, the Company cannot predict the extent to which its financial condition and results of operation will be affected.

The Company’s discussion and analysis of its financial condition and results of operations are based on its consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods.

The Company bases our estimates on historical experience and on various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Results of Operations - Three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021

The Company recorded revenue of approximately ~~$74,000~~$0 and $453,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. The Company recorded revenue of approximately ~~$450,000~~$460,000 and ~~$827,000~~$1,287,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. The Company has closed all of the LHI Clinics as of ~~June~~September 30, 2022 which was the Company’s only current source of revenue. The Company has ~~begun~~continued to transform itself into a biologics and therapeutic device incubator company to bring new technologies to market.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company generated a gross profit totaling approximately ~~$44,000~~$0 and $337,000, respectively. The Company generated gross profit of approximately ~~$234,000~~$321,000 and ~~$412,000~~$733,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company incurred approximately ~~$280,000~~$221,000 and ~~$627,000~~$848,000 in salaries and related costs, respectively. The Company incurred salaries and related costs of approximately ~~$586,000~~$535,000 and ~~$1,248,000~~$1,783,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. The decrease in salaries and related costs, as compared to the prior year, is due to the adjustments to the Company’s corporate structure by reducing expenses in marketing, sales, and operations due to decreased patient volume and closing of the LHI clinics. As of September 30, 2022, due to lack of financial resources, the Company has incurred $79,000 in unpaid salaries and wages.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company incurred approximately, ~~$395,000~~$290,000 and ~~$905,000,~~$1,194,000, in other general and administrative costs, respectively. The Company incurred other general and administrative costs of approximately ~~$700,000~~$852,000 and ~~$1,619,000~~$2,470,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively. The Company ~~made adjustments to~~adjusted its corporate structure by reducing expenses in marketing, sales, and operations due to decreased patient volume and closing of the LHI clinics.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company incurred approximately ~~$0 and $3,025,000, respectively,~~$3,024,000 in inducement expense related to the warrant inducement (see Note 8). For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company incurred approximately ~~$2,196,000~~$334,000 in warrant expense related to the securities purchase agreements. For the three and nine months ended September 30, 2022, the Company incurred approximately $0 and $2,196,000, respectively, related to the loss on extinguishment of convertible notes payable (see Note 4).

On January 17, 2022, Mr. Richard Rosenblum was appointed as a member of the Board.

On January 17, 2022, Mr. Matthew Anderer was appointed as a member of the Board.

The Company has historically incurred losses from operations and expects to continue acquisitions and operations to generate negative cash flows as the Company implements its updated strategic business ~~plan to focus on the Biologics Division.~~plan. The Company will need to raise cash from debt and equity offerings to continue its operations. There can be no assurance that the Company will be successful in doing so.

The Company incurred net losses of approximately ~~$2,635,000~~$2,279,000 and ~~$6,527,000~~$8,806,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. The Company incurred net losses of approximately ~~$2,058,000~~$587,000 and ~~$3,466,000~~$4,052,000 for the three and ~~six~~nine months ended ~~June~~September 30, 2021. The Company has historically incurred losses from operations and expects to continue to generate negative cash flows as it implements its plan around the Biosciences Division. The consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) as applicable to a going concern.

The Company had cash on hand of approximately ~~$46,000~~$37,000 as of ~~June~~September 30, 2022 and approximately ~~$3,000,~~$30,000 as of ~~August 12,~~November 14, 2022. The Company’s cash is insufficient to fund its operations over the next year and the Company is currently working to obtain additional debt or equity financing to help support working capital needs.

There can be no assurance that the Company will be able to raise additional funds or that the terms and conditions of any future financings will be workable or acceptable to the Company or its shareholders. If the Company is unable to fund its acquisitions and operations from existing cash on hand, operating cash flows, additional borrowings, or raising equity capital, the Company may not continue operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

With the Company historically having experienced losses, the primary source of liquidity has been raising capital through debt and equity offerings, as described below.

On October 14, 2021, the Company entered into the Second Closing Bring Down Agreement (the “October 2021 Note Purchase Agreement”) whereby the five (5) investors who had entered into the April 2021 Note Purchase Agreement purchased new notes in the Company in the aggregate principal amount of $750,000. The Notes are due and payable on June 30, 2022 and bear interest at an annual rate of 8%. The Notes are convertible into shares of Common Stock at a discount of 20% to the price paid for such New Securities in the next financing that meets the definition of a Qualified Financing as defined in the Note Purchase Agreement. The Notes are secured by all of the assets of the Company under a security agreement with the Holders. The lead investor of the October 2021 Note Purchase Agreement, FWHC Bridge, LLC, advanced $437,000 of the total amount to the Company. FWHC Bridge, LLC is an affiliated entity of FWHC, LLC, which is a principal stockholder and related party of the Company. An additional affiliate of FWHC, LLC provided an additional $7,000 as part of the October 2021 Note Purchase Agreement.

On February 22, 2022, the Company entered into a Debt Conversion Agreement (the “Amendment Agreement”) which i) provided for an additional round of convertible debt financing (“Tranche 2 Notes”) of up to $500,000 and ii) amended the conversion price on the convertible notes issued April 1, 2021 and October 8, 2021 (Tranche 1 Notes”) from 80% of the price paid in a Qualified Financing (proceeds of at least $15 million), to the lesser of (x) $0.002 and (y) the price paid in a Qualified Financing (proceeds of at least $10 million). The Amendment Agreement also provides the following Milestone Payments:

The Milestone Payments are not to exceed $2 million, and the Amendment Agreement also specifies that a Qualified Financing will not occur prior to the closing of the acquisition of Jantibody, LLC.

On April 29, 2022, the Company entered into an Amended and Restated Note Conversion Agreement (the “Note Conversion Agreement”) with certain holders of its Tranche 1 Notes (i) providing for a conversion price equal to the lesser of (x) $0.002 per share (pre-split) and (y) the price per share paid by the investors in a Qualified Financing for such New Securities purchased for cash and not through conversion of Notes (as such terms are defined in the Note Conversion Agreement), in each case subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization, (ii) automatic conversion upon the occurrence of a Qualified Financing, and (iii) amendment of the maturity date from March 31, 2022 to June 17, 2022 (the “New Notes”). Upon the effectiveness of the Company’s 1,000-1 reverse split, the conversion price adjusted to the lesser of (a) the price in the Qualified Financing or (b) $2.00 per share. The New Notes also provided the investors with Royalty Payments equal to 15% of all net sales generated by the Company with respect to the sale of products or services associated with the 510(k) Notification related to the Company’s autologous cellular therapy (PRP-PBMC) to treat chronic lung disorder. The Royalty Payments are in lieu of the Milestone payments but are perpetual and there is no limit to the aggregate amount of Royalty Payments that may be paid.

Based on the before and after cash flows of each note, the change was considered significantly different. Consequently, the New Notes were accounted for as a debt extinguishment of the Tranche 1 Notes and a new debt issuance of the New Notes. The Company recorded approximately a ~~$2.1 million~~$2,200,000 loss upon extinguishment of debt in the ~~three~~nine months ended ~~June~~September 30, 2022, which was comprised of the following:

On June 9, 2022, the Company entered into a securities purchase agreement for a total of $272,500 with two accredited investors. The notes issued are convertible into common stock at a 35% discount to the lowest trading price in the 20-day period prior to conversion. The notes bear interest at 10% and are due one year from issuance. For the first six months, the Company has the right to prepay the notes at a premium of between 25% and 35% depending on when it is repaid.

The Company also issued a promissory note for $100,000 to another accredited investor. This note bears interest at 15% (no matter when repaid) and converts at a discount of 25% of the price of a public offering or a 25% discount to the VWAP of the five (5) days prior to conversion.

The embedded features in the Tranche 2 Notes were analyzed under ASC 815 to determine if they required bifurcation as derivative instruments. To be a derivative, one of the criteria is that the embedded component must be net-settleable. While the Company’s Common Stock was traded on an exchange at the time of the transaction, the underlying shares are not readily convertible into cash since there is insufficient daily trading volume for the holders to convert the Tranche 2 Notes into Common Stock without significantly affecting the share price. Accordingly, the embedded derivatives, including the embedded conversion feature, did not meet the definition of a derivative, and therefore, did not require bifurcation from the host instrument. Certain default put provisions, including a default put and default interest, were not considered to be clearly and closely related to the host instrument but the Company concluded that the value of these provisions was de minim us at inception. The Company will reconsider the value of these provisions each reporting period to determine if the value becomes material to the financial statements.

On September 29, 2022, H-CYTE, Inc. (the “Company”) entered into a securities purchase agreement with two accredited investors for the sale of shares of Common Stock and warrants (the “Purchase Agreement”). Pursuant to the Purchase Agreement, the Company sold an aggregate of 112,500 shares of common stock and warrants to purchase 56,250 shares of Common Stock exercisable at $2.50 per share for gross proceeds of $225,001. All of the shares described in this Current Report on Form 8-K are being offered and issued to accredited investors in reliance upon exemptions from the registration requirements under Section 4(a)(2) under the Securities Act of 1933, as amended (“Securities Act”), and Rule 506 of Regulation D promulgated thereunder.

Cash activity for the ~~three~~nine months ended ~~June~~September 30, 2022 and December 31, 2021 is summarized as follows:

	As Of						As Of
	June 30, 2022			December 31, 2021			September 30, 2022			December 31, 2021
Current Assets	$	223,174		$	197,456		$	174,003			197,456
Current Liabilities		5,175,718			4,920,880			6,693,035			4,920,880
Working Capital Deficit	$	(4,952,544	)	$	(4,723,424	)	$	(6,519,032	)		(4,723,424	)

Cash activity for the ~~three~~nine months ended ~~June~~September 30, 2022 and 2021 is summarized as follows:

	Six months Ended June 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash used in operating activities	$	(1,527,380	)	$	(2,740,629	)	$	(1,821,535	)		(3,988,115	)
Cash used in investing activities		-			(7,832	)		-			(7,832	)
Cash provided by financing activities		1,478,085			2,624,338			1,763,086			2,662,515
Net increase (decrease) in cash	$	(49,295	)	$	(124,123	)	$	(58,449	)		(1,333,432	)

As of ~~June~~September 30, 2022, the Company had approximately ~~$46,000~~$37,000 of cash on hand.

The Company does not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4) during the periods presented, investments in special-purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal accounting officer, as appropriate to allow timely decisions regarding disclosure.

The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of ~~June~~September 30, 2022. In designing and evaluating the Company’s disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired objectives, and the Company necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~June~~September 30, 2022, the Company’s disclosure controls and procedures were not as effective as desired because of the material weakness in our internal control over financial reporting, due to lack of financial resources to hire personnel, as discussed below, and as a result, the Company engaged consultants, implemented a number of new entity and process level controls and installed a new accounting software system to help mitigate this material weakness.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control over financial reporting as of ~~June~~September 30, 2022, we determined that internal control deficiencies relating to a lack of segregation of duties still exist. Management believes these deficiencies mainly relate to the Company employing a limited number of accounting and finance personnel. The aggregation of these deficiencies is considered to be a material weakness in internal control over financial reporting.

In light of the conclusion that our disclosure controls and procedures were ineffective as of ~~June~~September 30, 2022, we have applied additional procedures, engaged consultants, and processes as necessary to ensure the reliability of our financial reporting in regard to this quarterly report. Accordingly, the Company believes, based on its knowledge, that: (i) this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading with respect to the period covered by this report; and (ii) the financial statements, and other financial information included in this quarterly report, fairly present in all material respects our financial condition, results of operations and cash flows as of and for the periods presented in this quarterly report.

The Company is involved in a lawsuit with ITN Networks, LLC (“~~ITN)~~ITN”) which was filed on July 22, 2021, in the Circuit Court for the Thirteenth Judicial Circuit in and for Hillsborough County, Florida. ITN has filed suit alleging breach of contract for advertising services in the amount of approximately $75,000 plus interest and costs. The Company has retained legal counsel for its defense against the suit. The amount is recorded in accounts payable as of ~~June~~September 30, 2022.

We are a smaller reporting company as defined by 17 CFR 229.10(f)(1). Thus, we are not required to provide information under this item.

The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference as part of this Quarterly Report on Form 10-Q.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Nevada		46-3312262
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

2202 N. West Shore Blvd. Ste 200
Tampa, Florida		33607
(Address of principal executive offices)		(Zip Code)

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		HCYT		OTC Capital Markets

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☐

		Page
PART I – FINANCIAL INFORMATION

	Special Note Regarding Forward-looking Statements	3
Item 1.	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Stockholders’ Equity (Deficit)	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1721
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	2226
Item 4.	Controls and Procedures	2226

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	2327
Item 1A.	Risk Factors	2273
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2327
Item 3.	Defaults Upon Senior Securities	2327
Item 4.	Mine Safety Disclosures	2327
Item 5.	Other Information	2327
Item 6.	Exhibits	2327

SIGNATURES		2428

	●	the Company’s ability to market, commercialize, and achieve broader market acceptance for its products;

	●	the Company’s ability to successfully expand and achieve full productivity from its sales, clinical support, and marketing capabilities;

	●	the Company’s ability to successfully complete the development of, and obtain regulatory clearance or approval for its products; and

	●	the estimates regarding the sufficiency of the Company’s cash resources, the ability to obtain additional capital, or the ability to maintain or grow sources of revenue.

Nine months ended	Preferred Series A Stock						Common Stock¹				Additional Paid-in		Accumulated			Stockholders’
September 30, 2021 and 2022	Shares			Amount			Shares		Amount		Capital¹		Deficit			Deficit
Balances - December 31, 2020		538,109,409		$	538,109			127,159	$	127,159	$	42,515,999	$	(44,229,106	)	$	(1,047,839	)
Conversion of Series A Preferred Stock to Common Stock		(22,235,055	)		(22,235	)		22,235		22,235		-		-			-
Share based compensation		-			-			-		-		1,024,359		-			1,024,359
Net Loss		-			-			-		-		-		(4,052,290	)		(4,052,290	)
Balances - September 30, 2021		515,874,354		$	515,874			149,394	$	149,394	$	43,540,358	$	(48,281,396	)	$	(4,075,770	)

Six months ended	Preferred Series A Stock						Common Stock				Additional Paid-in		Accumulated			Stockholders’
June 30, 2021 and 2022	Shares			Amount			Shares		Amount		Capital¹		Deficit			Deficit
Balances - December 31, 2020		538,109,409		$	538,109			127,159	$	127,159	$	42,515,999	$	(44,229,106	)	$	(1,047,839	)
Conversion of Series A Preferred Stock to Common Stock		(17,803,525	)		(17,804	)		17,804		17,804		-		-			-
Share based compensation		-			-			-		-		862,000		-			862,000
Net Loss		-			-			-		-		-		(3,465,679	)		(3,465,679	)
Balances - June 30, 2021		520,305,884		$	520,305			144,963	$	144,963	$	43,377,999	$	(47,694,785	)	$	(3,651,518	)

	1)	$1,000,000 after filing a premarket notification pursuant to Section 510(k) of the Food, Drug and Cosmetic Act, of its intent to market its PRP cellular therapy
	2)	Following the closing of a Qualified financing, 25% of all proceeds raised in excess of $10 million (not to exceed $1 million)


Carrying value of Tranche 1 Notes	$	3,580,738
Less: Fair value of New Notes		(4,079,838	)
Less: Fair value of Royalty Payments		(1,697,000	)
Loss on Extinguishment	$	(2,196,100	)

2021 Grants
Option value	$	54.00		to	$	56.00
Risk Free Rate		0.90	%	to		1.37	%
Expected Dividend- yield		-		to		-
Expected Volatility		173.99	%	to		176.04	%
Expected term (years)		5		to		7

Event Description	Date	Number of Warrants		H-CYTE Stock Price		Exercise Price of Warrant		Grant Date Fair Value		Life of Warrant	Risk Free Rate of Return (%)		Annualized Volatility Rate (%)
Granted for inducement agreement	1/19/2022		3,732	$	63.25	$	14.00	$	0.062	5 years		1.62		187.79
Granted for inducement agreement	1/20/2022		372	$	64.50	$	14.00	$	0.064	5 years		1.62		187.85
Granted for inducement agreement	1/20/2022		187	$	64.50	$	14.00	$	0.064	5 years		1.62		187.85
Granted for inducement agreement	1/24/2022		374	$	48.00	$	14.00	$	0.047	5 years		1.53		188.01
Granted for inducement agreement	1/25/2022		3,744	$	49.10	$	14.00	$	0.048	5 years		1.56		188.00
Granted for inducement agreement	2/02/2022		3,741	$	44.55	$	14.00	$	0.044	5 years		1.60		188.25
Granted for inducement agreement	2/04/2022		6,935	$	44.38	$	14.00	$	0.043	5 years		1.78		188.33
Granted for inducement agreement	2/04/2022		13,870	$	44.38	$	14.00	$	0.043	5 years		1.78		188.33
Granted for services provided	2/09/2022		1,000	$	32.00	$	14.00	$	0.031	5 years		1.82		188.69
Granted for inducement agreement	2/22/2022		41,609	$	32.88	$	14.00	$	0.032	5 years		1.85		188.59
Granted for inducement agreement	2/22/2022		693	$	32.88	$	14.00	$	0.032	5 years		1.85		188.59
Granted for inducement agreement	3/21/2022		8,322	$	28.00	$	14.00	$	0.027	5 years		2.33		194.01

Consideration:
Common stock	$	29,557
Common stock (anti-dilution shares, to be issued – included in other current liabilities)		195,532
Direct transaction costs		21,600
Total costs of the asset acquisition	$	246,689
Assets acquired
Cash	$	469
Liabilities assumed – legal and administrative costs		(999,728	)
Intangible assets: IPR&D		1,245,948
Net identifiable assets acquired	$	246,689

	H-CYTE, INC

	By:	/s/ Michael Yurkowsky
		Michael Yurkowsky
		Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Jeremy Daniel
		Jeremy Daniel
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

31.1		Section 302 Certification of Principal Executive Officer*
31.2		Section 302 Certification of Principal Financial Officer*
32.1		Section 906 Certification of Principal Executive Officer and Principal Financial Officer***
101.INS		Inline XBRL Instance Document **
101.SCH		Inline XBRL Taxonomy Extension Schema Document **
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document **
101.LAB		Inline XBRL Taxonomy Labels Linkbase Document **
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document **
101.DEF		Inline XBRL Definition Linkbase Document **
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith.

**	Pursuant to Rule 406T of Regulation S-T adopted by the SEC, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise are not subject to liability under these sections.

***	This certification is being furnished solely to accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, and it is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.