Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 19, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | H-CYTE, INC. | |
Entity Central Index Key | 0001591165 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,878,079 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | |
Current Assets | |||
Cash | $ 122,400 | $ 1,424,096 | |
Accounts receivable | 11,333 | 22,667 | |
Other receivables | 11,701 | 18,673 | |
Prepaid expenses | 216,048 | 810,143 | |
Total Current Assets | 361,482 | 2,275,579 | |
Right-of-use asset | 606,897 | 738,453 | |
Property and equipment, net | 197,596 | 219,703 | |
Other assets | 36,042 | 36,877 | |
Total Assets | 1,202,017 | 3,270,612 | |
Current Liabilities | |||
Interest payable | 92,561 | 53,198 | |
Accounts payable | 1,676,532 | 1,471,688 | |
Accrued liabilities | 393,499 | 324,984 | |
Other current liabilities | 357,689 | 189,035 | |
Short-term notes, related parties | 2,135,000 | 1,635,000 | |
Short-term convertible note payable | 424,615 | 424,615 | |
Notes payable, current portion | 67,444 | 66,836 | |
Dividend payable | 126,941 | 108,641 | |
Deferred revenue | 770,031 | 1,046,156 | |
Lease liability, current portion | 402,876 | 453,734 | |
Total Current Liabilities | 6,447,188 | 5,773,887 | |
Long-Term Liabilities | |||
Lease liability, net of current portion | 221,710 | 302,175 | |
Notes payable, net of current portion | 11,545 | ||
Derivative liability - warrants | [1] | 140,877 | 315,855 |
Redemption put liability | [1] | 79,045 | 267,399 |
Total Long-Term Liabilities | 441,632 | 896,974 | |
Total Liabilities | 6,888,820 | 6,670,861 | |
Commitments and Contingencies (Note 10) | |||
Mezzanine Equity | |||
Total Mezzanine Equity | 6,281,433 | 6,060,493 | |
Stockholders' Deficit | |||
Common stock - $.001 par value: 199,000,000 shares authorized. 99,878,079 and 99,768,704 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 99,878 | 99,769 | |
Additional paid-in capital | 28,117,978 | 28,172,146 | |
Accumulated deficit | (39,815,966) | (37,362,531) | |
Non-controlling interest | (370,132) | (370,132) | |
Total Stockholders' Deficit | (11,968,236) | (9,460,742) | |
Total Liabilities, Mezzanine Equity and Stockholders' Deficit | 1,202,017 | 3,270,612 | |
Series D Convertible Preferred Stock [Member] | |||
Mezzanine Equity | |||
Total Mezzanine Equity | 6,281,433 | 6,060,493 | |
Series A Convertible Preferred Stock [Member] | |||
Stockholders' Deficit | |||
Preferred Stock, value | |||
Series B Convertible Preferred Stock [Member] | |||
Stockholders' Deficit | |||
Preferred Stock, value | 6 | 6 | |
Series C Convertible Preferred Stock [Member] | |||
Stockholders' Deficit | |||
Preferred Stock, value | |||
[1] | The Company did not have any assets or liabilities measured at fair value using Level 1 or 2 of the fair value hierarchy as of March 31, 2020 and December 31, 2019. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ .001 | $ .001 |
Common stock, shares authorized | 199,000,000 | 199,000,000 |
Common stock, shares issued | 99,878,079 | 99,768,704 |
Common stock, shares outstanding | 99,878,079 | 99,768,704 |
Series D Convertible Preferred Stock [Member] | ||
Mezzanine equity, par value | $ .001 | $ .001 |
Mezzanine equity, shares authorized | 238,871 | 238,871 |
Mezzanine equity, shares issued | 149,448 | 146,998 |
Mezzanine equity, shares outstanding | 149,448 | 146,998 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 6,100 | 6,100 |
Preferred stock, shares outstanding | 6,100 | 6,100 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock, shares authorized | 45,000 | 45,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 1,016,776 | $ 1,324,240 |
Cost of Sales | (376,816) | (559,319) |
Gross Profit | 639,960 | 764,921 |
Operating Expenses | ||
Salaries and related costs | 1,224,353 | 1,532,789 |
Other general and administrative | 1,230,135 | 1,487,720 |
Research and development | 750,000 | |
Advertising | 144,618 | 1,135,546 |
Depreciation and amortization | 22,108 | 211,218 |
Total Operating Expenses | 3,371,214 | 4,367,273 |
Operating Loss | (2,731,254) | (3,602,352) |
Other Income (Expense) | ||
Other income (expense) | 2,538 | (205) |
Interest expense | (56,149) | (92,259) |
Change in fair value of redemption put liability | 193,659 | |
Change in fair value of derivative liability - warrants | 174,978 | |
Total Other Income (Expense) | 315,026 | (92,464) |
Net Loss | (2,416,228) | (3,694,816) |
Accrued dividends on outstanding Series B Convertible Preferred Stock | 18,300 | 24,639 |
Deemed dividend on adjustment to exercise price on certain warrants | 404,384 | |
Deemed dividend on Series D Convertible Preferred Stock | 158,147 | |
Deemed dividend on Beneficial Conversion Features | 32,592 | |
Net loss attributable to common stockholders | $ (2,592,675) | $ (4,156,431) |
Loss per share - Basic and Diluted | $ (0.03) | $ (0.05) |
Weighted average outstanding shares - basic and diluted | 99,839,617 | 85,513,024 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Non-controlling Interest [Member] | Total |
Beginning Balance at Dec. 31, 2018 | $ 33,661 | $ 3,566,339 | $ (9,296,408) | $ (370,132) | $ (6,066,540) | |
Beginning Balance, Shares at Dec. 31, 2018 | 33,661,388 | |||||
Purchase Accounting entries due to the purchase transaction | $ 9 | $ 24,717 | 6,442,182 | 6,466,908 | ||
Purchase Accounting entries due to the purchase transaction, shares | 9,250 | 24,717,217 | ||||
Adjustment for assets and liabilities not included in purchase transaction | 5,244,780 | 5,244,780 | ||||
Issuance of common stock in connection with private placement offering from January 8, 2019 through March 31, 2019 | $ 17,000 | 4,200,946 | 4,217,946 | |||
Issuance of common stock in connection with private placement offering from January 8, 2019 through March 31, 2019, shares | 17,000,000 | |||||
Issuance of warrants in connection with private placement offering from January 8, 2019 through March 31, 2019 | 2,565,638 | 2,565,638 | ||||
Issuance of common stock pursuant to conversion of short-term debt | $ 750 | 225,187 | 225,937 | |||
Issuance of common stock pursuant to conversion of short-term debt, shares | 750,000 | |||||
Issuance of warrants pursuant to conversion of short-term debt in January 2019 | 74,063 | 74,063 | ||||
Issuance of additional exchange shares | $ 17,264 | (17,264) | ||||
Issuance of additional exchange shares, shares | 17,263,889 | |||||
Issuance of common stock pursuant to conversion of Preferred Series B Stock conversions | $ (2) | $ 513 | (511) | |||
Issuance of common stock pursuant to conversion of Preferred Series B Stock conversions, shares | (2,050) | 512,500 | ||||
Issuance of common stock pursuant to conversion of short-term debt and accrued interest | $ 2 | 665 | 667 | |||
Issuance of common stock pursuant to conversion of short-term debt and accrued interest, shares | 1,667 | |||||
Issuance of common stock in exchange for consulting fees incurred | $ 130 | 51,904 | 52,034 | |||
Issuance of common stock in exchange for consulting fees incurred, shares | 130,085 | |||||
Adjustment of exercise price on certain warrants | 404,384 | (404,384) | ||||
Beneficial conversion on Preferred Series B Stock | 32,592 | (32,592) | ||||
Stock based compensation | 89,043 | 89,043 | ||||
Dividends payable | (24,639) | (24,639) | ||||
Issuance of warrants pursuant to short-term notes, related party | ||||||
Net loss | (3,694,816) | (3,694,816) | ||||
Ending Balance at Mar. 31, 2019 | $ 7 | $ 94,037 | 17,610,529 | (8,183,420) | (370,132) | 9,151,021 |
Ending Balance, shares at Mar. 31, 2019 | 7,200 | 94,036,746 | ||||
Beginning Balance at Dec. 31, 2018 | $ 33,661 | 3,566,339 | (9,296,408) | (370,132) | (6,066,540) | |
Beginning Balance, Shares at Dec. 31, 2018 | 33,661,388 | |||||
Ending Balance at Dec. 31, 2019 | $ 6 | $ 99,769 | 28,172,146 | (37,362,531) | (370,132) | (9,460,742) |
Ending Balance, shares at Dec. 31, 2019 | 6,100 | 99,768,704 | ||||
Issuance of common stock in exchange for consulting fees incurred | $ 109 | 34,891 | 35,000 | |||
Issuance of common stock in exchange for consulting fees incurred, shares | 109,375 | |||||
Stock based compensation | 643 | 643 | ||||
Issuance of warrants pursuant to short-term notes, related party | 17,636 | 17,636 | ||||
Deemed dividend on Series D Convertible Preferred Stock | (120,940) | (37,207) | (158,147) | |||
Issuance of warrants pursuant to private placement of Series D Convertible Preferred Stock | 31,902 | 31,902 | ||||
Accrued dividends on Series B Convertible Preferred Stock | (18,300) | (18,300) | ||||
Net loss | (2,416,228) | (2,416,228) | ||||
Ending Balance at Mar. 31, 2020 | $ 6 | $ 99,878 | $ 28,117,978 | $ (39,815,966) | $ (370,132) | $ (11,968,236) |
Ending Balance, shares at Mar. 31, 2020 | 6,100 | 99,878,079 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (2,416,228) | $ (3,694,816) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 22,108 | 211,218 |
Amortization of debt discount | 912 | 63,578 |
Issuance of warrants pursuant to short-term notes, related party | 17,636 | |
Stock based compensation | 643 | 89,043 |
Loss on write-off of inventory | 2,191 | |
Common stock issued for consulting services | 35,000 | 52,032 |
Change in fair value of derivative liability - warrants and redemption put liability | (368,637) | |
Bad debt expense | 3,000 | 8,025 |
Changes in operating assets and liabilities, net of purchase transaction: | ||
Accounts receivable | 8,334 | 76,811 |
Other receivables | 6,972 | (76,504) |
Prepaid expenses and other assets | 594,251 | (260,065) |
Interest payable | 39,363 | (78,987) |
Accounts payable | 204,843 | (187,697) |
Accrued liabilities | 211,221 | (202,412) |
Other current liabilities | 25,948 | 49,696 |
Deferred revenue | (276,125) | 69,750 |
Net Cash Used in Operating Activities | (1,890,759) | (3,878,137) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (4,730) | |
Purchase of business, net of cash acquired | (302,710) | |
Cash excluded in Merger | (69,629) | |
Net Cash Used in Investing Activities | (377,069) | |
Cash Flows from Financing Activities | ||
Proceeds from short-term notes, related parties | 500,000 | |
Payment of dividends | (6,137) | |
Payment on debt obligations | (10,937) | |
Proceeds from common stock, net of issuance costs | 4,217,946 | |
Proceeds from warrants, net of issuance costs | 2,565,638 | |
Proceeds from issuance of Series D Convertible Preferred stock | 100,000 | |
Net Cash Provided by Financing Activities | 589,063 | 6,777,447 |
Net (Decrease) Increase in Cash | (1,301,696) | 2,522,241 |
Cash - Beginning of period | 1,424,096 | 69,628 |
Cash - End of period | 122,400 | 2,591,869 |
Supplementary Cash Flow Information | ||
Cash paid for interest | 15,874 | 9,320 |
Non-cash investing and financing activities | ||
Deemed dividend on adjustment to exercise price on certain warrants | 404,384 | |
Deemed dividend on beneficial conversion features | 32,592 | |
Issuance of common stock pursuant to conversion of debt obligations | 225,937 | |
Issuance of warrants pursuant to conversion of short-term debt | 74,063 | |
Deemed dividend on Series D Convertible Preferred Stock | 158,147 | |
Issuance of Warrants in connection with Series D Convertible Preferred Stock | 31,902 | |
Dividends accrued on Series B Convertible Preferred Stock | 18,300 | 24,638 |
Right-of-use asset additions | 1,092,102 | |
Right-of-use liability additions | $ 1,113,646 |
Description of the Company
Description of the Company | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of the Company | Note 1 - Description of the Company On July 11, 2019, MedoveX Corp. (“MedoveX”) changed its name to H-CYTE, Inc. (“H-CYTE” or the “Company”) by filing a Certificate of Amendment (the “Amendment”) to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) with the Secretary of the State of Nevada. The name change and the Company’s new symbol, HCYT, became effective with FINRA on July 15, 2019. H-CYTE was incorporated in Nevada on July 30, 2013 as SpineZ Corp. On October 18, 2018, H-CYTE (formerly named MedoveX) entered into an Asset Purchase Agreement (“APA”) with Regenerative Medicine Solutions, LLC, RMS Shareholder, LLC (“Shareholder”), Lung Institute LLC (“LI”), RMS Lung Institute Management LLC (“RMS LI Management”) and Cognitive Health Institute Tampa, LLC (“CHIT”), (collectively “RMS”). On January 8, 2019, the APA was amended, and the Company acquired certain assets and assumed certain liabilities of RMS as reported in the 8-K/A filed in March of 2019. Based on the terms of the APA and its amendment (collectively the “APA”), the former RMS members had voting control of the combined company as of the closing of the RMS acquisition. For accounting purposes, the acquisition transaction has been treated as a reverse acquisition whereby the Company is deemed to have been acquired by RMS and the historical financial statements prior to the acquisition date of January 8, 2019 now reflect the historical financial statements of RMS. As of the merger, the consolidated results for H-CYTE include the following wholly-owned subsidiaries: H-CYTE Management, LLC (formerly Blue Zone Health Management, LLC), MedoveX Corp, Cognitive Health Institute, LLC, and Lung Institute Tampa, LLC (formerly Blue Zone Lung Tampa, LLC) and the results included Lung Institute Dallas, PLLC (“LI Dallas”), Lung Institute Nashville, PLLC (“LI Nashville”), Lung Institute Pittsburgh, PLLC (“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. In 2019, the Company had two divisions: the healthcare medical biosciences division (“Biosciences division”) and the DenerveX medical device division (“DenerveX division”). In the first quarter of 2020, the Company decided to focus its available resources on the Biosciences division as it represents a significantly greater opportunity than the DenerveX division as explained below. The Company is no longer manufacturing or selling the DenerveX device. Healthcare Medical Biosciences Division (Biosciences division) The Company’s Biosciences division is a medical biosciences company that develops and implements innovative treatment options in regenerative medicine to treat an array of debilitating medical conditions. Committed to an individualized patient-centric approach, this division consistently provides oversight and management of the highest quality care while producing positive medical outcomes. On June 21, 2019, H-CYTE entered into an exclusive product supply agreement with Rion, LLC (“Rion”) to develop and distribute a FDA approved therapy (known as L-CYTE-01) for chronic obstructive pulmonary disease (“COPD”), the fourth leading cause of death in the U.S. Rion has established a novel technology to harness the healing power of the body. Rion’s innovative exosome technology, based on science developed at Mayo Clinic, provides an off-the-shelf platform to enhance healing in soft tissue, musculoskeletal, cardiovascular and neurological organ systems. This agreement provides for a ten-year exclusive and extendable supply agreement with Rion to enable H-CYTE to develop proprietary biologics. On October 9, 2019, the Company entered into a services agreement with Rion which provides the Company the benefit of Rion’s resources and expertise for the limited purpose of (i) consulting with and assisting H-CYTE in the further research and development for the generation of a new cellular therapy (L-CYTE-01) and (ii) subsequently assisting H-CYTE in seeking and obtaining FDA Phase 1 IND clearance for L-CYTE-01. Rion also agrees to consult with H-CYTE in its arrangement for services from third parties unaffiliated with Rion to support research, development, regulatory approval, and commercialization of L-CYTE-01. With these agreements, Rion will serve as the product supplier and co-developer of L-CYTE-01 with H-CYTE for the treatment of chronic lung diseases. H-CYTE will control the commercial development and facilitate the clinical trial investigation. After conducting joint research and development of these biologics, H-CYTE intends to pursue submission of an investigational new drug (IND) application for review by the FDA for treatment of COPD. Proprietary Medical Device Business (DenerveX medical device division) The Company’s business of designing and marketing proprietary medical devices for commercial use in the U.S. and Europe began operations in late 2013. The Company received CE marking in June 2017 for the DenerveX System, and it became commercially available throughout the European Union and several other countries that accept CE marking. In addition to the DenerveX device itself, the Company has developed a dedicated Electro Surgical Generator, the DenerveX Pro-40, to power the DenerveX device. Commercial production has been suspended since the first quarter of 2019. There was less than $100,000 in revenue from the product in 2019. In the first quarter of 2020, the Company made the decision to stop any further efforts to source alternative manufacturing and distributor options or other product monetizing relationships for the DenerveX product. Although the Company believes the DenerveX technology has value, the Company does not believe it will realize the value in the foreseeable future. The Company recorded an impairment charge for intangibles associated with the DenerveX intellectual property and wrote off related inventory balances as of December 31, 2019. |
Liquidity, Going Concern and Ma
Liquidity, Going Concern and Management's Plans | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity, Going Concern and Management's Plans | Note 2 - Liquidity, Going Concern and Management’s Plans COVID-19 has adversely affected the Company’s financial condition and results of operations. In the first quarter of 2020, the Company took steps to protect its vulnerable patient base (elderly patients suffering from chronic lung disease) by cancelling all treatments effective March 23, 2020 through at least the end of July. The Company made the decision in late March, to layoff approximately 40% of its employee base, including corporate and clinical employees, and to cease operations at the LHI clinics in Tampa, Scottsdale, Pittsburgh, and Dallas. The Company will reevaluate when operations will recommence at these clinics as more information about COVID-19 becomes available. The Company incurred net losses of approximately $2,416,000 and $3,695,000 for the three months ended March 31, 2020 and 2019, respectively. The Company has historically incurred losses from operations and expects to continue to generate negative cash flows as the Company’s revenue activities are suspended and as the Company implements its business plan. The consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) as applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company will incur losses until sufficient revenue is attained utilizing the infusion of capital resources to expand marketing and sales initiatives along with the development of a L-CYTE-01 protocol and taking that protocol through the FDA process. Due to the coronavirus outbreak (“COVID-19”), the Company is not expecting to be able to generate revenue until, at the earliest, August 2020. The Company has contacted its patients that are scheduled to come in for treatment, both first time patients and recurring patients, and have rescheduled these patients to August 2020. There is no guarantee that the Company will be able to treat patients as soon as August 2020; as such, the Company cannot estimate when it will be safe to treat patients and generate revenue. The Company’s first quarter revenue 2020 was approximately $1,000,000 compared to fourth quarter 2019 revenue of approximately $1,800,000. The Company expects revenue for the second quarter of 2020 will be nominal if any, and future quarters’ revenue is dependent on the timing of being able to treat patients again. The Company will continue to focus on its goal of taking the L-CYTE-01 protocol to the FDA for treatment of chronic lung diseases. The Company is currently evaluating if its protocol has the potential to help people affected by COVID-19, but more research will need to be completed before a definitive conclusion can be reached. The Company incurred net losses of approximately $2,416,000 and $3,695,000 for the three months ended March 31, 2020 and 2019, respectively. The Company has historically incurred losses from operations and expects to continue to generate negative cash flows as the Company’s revenue activities are suspended and as the Company implements its business plan. The consolidated financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) as applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. With the Company’s revenue-generating activities suspended, the Company will need to raise cash from debt and equity offerings to continue with its efforts to take the L-CYTE-01 protocol to the FDA for treatment of chronic lung diseases. There can be no assurance that the Company will be successful in doing so. On March 27, 2020, the Company issued a demand note (the “Note”) in the principal amount of $500,000 to FWHC Bridge, LLC (the “Investor”) in exchange for a loan made by the Investor in such amount to cover the Company’s working capital needs. Subsequently on April 9, 2020, in exchange for an additional loan of $500,000 made by the Investor to the Company to further cover the Company’s working capital needs, the Company amended and restated the Note to reflect a new principal amount of $1,000,000 (the “A&R Note”). The A&R Note bears simple interest at a rate of 12% per annum. The Investor is an affiliate of FWHC Holdings, LLC, a pre-existing shareholder of the Company, which served as lead investor in the Company’s recent Series D Convertible Preferred Stock Offering. As discussed further below in “Note Purchase Agreement”, this A&R Note was further amended and superseded by an April Secured Note in the amount of $1,000,000 issued by the Company to the Investor. Note Purchase Agreement On April 17, 2020, and in subsequent April closings, the Company entered into a Secured Convertible Note and Warrant Purchase Agreement (the “April SPA”) with thirty three investors (the “Purchasers”) pursuant to which the Company received an aggregate of $2,835,195 in gross proceeds through the sale to the Purchasers of Secured Convertible Promissory Notes (the “April Secured Notes”) and warrants (the “April Warrants”) to purchase shares of common stock of the Company (the “April Offering”). The proceeds of the April Offering will be used for working capital and general corporate purposes. The April Offering resulted in the issuance of April Secured Notes to Purchasers in an aggregate principal amount of $3,835,195. This sum included the issuance by the Company to the Investor of an April Secured Note in the amount of $1,000,000 to amend and supersede the A&R Note previously issued by the Company to the Investor on April 9, 2020. Additionally, in connection with the April Offering, the Company entered into an amendment with the Investor with respect to the outstanding 12% Senior Secured Convertible Note due September 30, 2020, which was originally issued in 2018 and assumed in the Merger and which was purchased by the Investor from its original holder, George Hawes, on March 27, 2020 (the “Hawes Note”). The Hawes Notes had a principal amount of $424,615 as of March 31, 2020 and December 31, 2019. The amendment to the Hawes Note among other things, eliminates the requirement that the Company make monthly payments of accrued interest. The Hawes Note is expected to convert into shares of preferred stock of the Company offered for purchase at the Qualified Financing at the closing of the Qualified Financing. As part of the April Offering, the holders of certain existing warrants issued by the Company which contained anti-dilution price protection entered into agreements terminating all anti-dilution price protection in their warrants. The Company intends to implement a one-time reduction of the exercise price of such warrants to be equal to the price per share at which shares of preferred stock are offered for purchase at the Qualified Financing once that price has been established. Short-term notes, related parties On March 27, 2020, the Company issued a demand note (the “Note”) in the principal amount of $500,000 to FWHC Bridge, LLC (the “Investor”) in exchange for a loan made by the Investor in such amount to cover the Company’s working capital needs. Subsequently on April 9, 2020, in exchange for an additional loan of $500,000 made by the Investor to the Company, the Company amended and restated the Note to reflect a new principal amount of $1,000,000 (the “A&R Note”). The A&R Note bears simple interest at a rate of 12% per annum. The Investor is an affiliate of FWHC Holdings, LLC, a pre-existing shareholder of the Company, which served as lead investor in the Company’s recent Series D Convertible Preferred Stock Offering. As discussed further above in “Note Purchase Agreement”, this A&R Note was further amended and superseded by an April Secured Note in the amount of $1,000,000 issued by the Company to the Investor. The other short-term notes, related parties were issued by the Company during 2019, and as of March 31, 2020 and December 31, 2019 consist of five loans, totaling $1,635,000, made to the Company by Horne Management, LLC, controlled by Chief Executive Officer, William E. Horne. These were advanced for working capital purposes and had the terms as indicated below. The loans bear interest ranging from 5.5% to 12%, in some cases increasing to 15% if not paid by the respective maturity date ranging from March 26, 2020 to May 13, 2020. Some of these loans provided for the issuance of warrants at 114% warrant coverage if the loan was not repaid within two months. None of these loans have been repaid and 840,000 warrants have been issued at an exercise price of $0.75 per share. On April 23, 2020, Horne Management, LLC agreed to convert the related notes plus accrued interest into (i) 4,368,278 shares of common stock of the Company and (ii) a ten-year warrant to purchase up to an equivalent number of shares of the Company’s common stock with such conversion to be effective as of April 17, 2020. This warrant will have an exercise price equal to the price per share at which securities are offered to investors for purchase at the Qualified Financing, which such price has not yet been established, and is exercisable beginning on the day immediately following the earlier to occur of (x) the closing of the Qualified Financing and (y) November 1, 2020. If the Qualified Financing does not occur on or prior to October 31, 2020, the exercise price of the warrant will be equal to the price per share obtained by dividing $3,000,000 by the number of fully diluted shares of the Company outstanding on October 31, 2020. As of March 31, 2020, the Company had cash on hand of $122,400. Cash on hand at May 15, 2020 was approximately $3,117,000. The Company’s cash is insufficient to fund its operations over the next year and the Company will need to raise additional capital through debt or equity offerings to continue operations. 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. In the event 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 be forced to reduce expenses or discontinue 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. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 3 – Basis of presentation Based on the terms of the APA, the former RMS members had voting control of the combined company as of the closing of the Merger. RMS is deemed to be the acquiring company for accounting purposes and the transaction is accounted for as a reverse acquisition under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. The assets acquired and the liabilities assumed of RMS included as part of the purchase transaction are recorded at historical cost. Accordingly, the assets and liabilities of H-CYTE are recorded as of the Merger closing date at their estimated fair values. 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, 2019 and December 31, 2018 which included all information and notes necessary for such complete presentation in conjunction with its 2019 Annual Report on Form 10-K. The results of operations for the interim period ended March 31, 2020 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, 2019, which are contained in the Company’s 2019 Annual Report on Form 10-K. For further discussion of the Company’s significant accounting policies, refer to Note 3 – “Basis Of 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, 2019. Certain reclassifications have been made to amounts previously reported and some disclosures for prior periods have been added to conform with the current period presentation. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisition | Note 4 – Business Acquisition On January 8, 2019, MedoveX completed its business combination with RMS under which MedoveX purchased certain assets and assumed certain liabilities of RMS, otherwise referred to as the Merger. Pursuant to the terms of the APA, MedoveX issued to the shareholders of RMS 33,661 shares plus 6,111 additional Exchange Shares (based on closing the sale of $2,000,000 of new securities) for a total of 39,772 shares of Series C Preferred Stock where each share of Series C Preferred stock automatically converted into 1,000 shares of common stock and represent approximately 55% of the outstanding voting shares of the Company. Under the terms of the APA, the Company issued additional “Exchange Shares” to the shareholders of RMS to maintain the 55% ownership and not be diluted by the sale of convertible securities (“New Shares Sold”) until MedoveX raised an additional $5,650,000 via the issuance of new securities. On the date of closing the Company issued 6,111 additional Exchange Shares to RMS Shareholders as a result of the issuance of additional securities, which are included in the 39,772 shares above. Subsequent to the closing of the purchase transaction, an incremental 11,153 additional Exchange Shares were issued, for a total of 17,264 additional Exchange Shares. All additional Exchange Shares have been issued to the shareholders of RMS and these Series C Preferred shares converted to 17,263,889 shares of common stock; no additional equity will be issued to RMS. Because RMS shareholders owned approximately 55% of the voting stock of MedoveX after the transaction, RMS was deemed to be the acquiring company for accounting purposes (the “Acquirer”) and the transaction is accounted for as a reverse acquisition under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. The assets acquired and the liabilities assumed of RMS included as part of the purchase transaction are recorded at historical cost. Accordingly, the assets and liabilities of MedoveX (the “Acquiree”) are recorded as of the Merger closing date at their estimated fair values. Purchase Price Allocation The purchase price for the acquisition of the Acquiree has been allocated to the assets acquired and liabilities assumed based on their estimated fair values. The acquisition-date fair value of the consideration transferred is as follows: Common shares issued and outstanding 24,717,270 Common shares reserved for issuance upon conversion of the outstanding Series B Preferred Stock 2,312,500 Total Common shares 27,029,770 Closing price per share of MedoveX Common stock on January 8, 2019 $ 0.40 10,811,908 Fair value of outstanding warrants and options 2,220,000 Cash consideration to RMS (350,000 ) Total consideration $ 12,681,908 Prior to the transaction, MedoveX had 24,500,000 shares of common stock outstanding at a market capitalization of $9,800,000. The estimated fair value of the net assets of MedoveX was $8,400,000 as of January 8, 2019. Measuring the fair value of the net assets to be received by RMS was readily determinable based upon the underlying nature of the net assets. The fair value of the MedoveX common stock was above the fair value of its net assets. The MedoveX net asset value was primarily comprised of definite-lived intangibles as of the closing and the RMS interest in the merger is significantly related to obtaining access to the public market. Therefore, the fair value of the MedoveX stock price and market capitalization as of the closing date is considered to be the best indicator of the fair value and, therefore, the purchase price consideration. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition on January 8, 2019: Cash $ (302,710 ) Accounts receivable 145,757 Inventory 131,455 Prepaid expenses 46,153 Property and equipment 30,393 Other 2,751 Intangibles 3,680,000 Goodwill 12,564,401 Total assets acquired $ 16,298,200 Accounts payable and other accrued liabilities 1,645,399 Derivative liability 1,215,677 Interest-bearing liabilities and other 755,216 Net assets acquired $ 12,681,908 Intangible assets are recorded as definite-lived assets and amortized over the estimated period of economic benefit. Intangible assets represent the fair value of patents and related proprietary technology for the DenerveX System. During the fourth quarter of 2019 the Company recorded an impairment charge of $2,944,000 related to the carrying value of its intangible assets. Goodwill is calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired, and liabilities assumed. Goodwill is not expected to be deductible for income tax purposes. Goodwill is recorded as an indefinite-lived asset and is not amortized but tested for impairment on an annual basis or when indications of impairment exist. During the fourth quarter of 2019 the Company recorded an impairment charge of approximately $12,564,000 related to the carrying value of goodwill. The derivative liability relates to the liability associated with warrants issued with the securities purchase agreements executed in May 2018, which liability was assumed in the Merger (see Note 12). Total interest-bearing liabilities and other liabilities assumed are as follows: Notes payable $ 99,017 Short-term convertible notes payable 598,119 Dividend payable 57,813 Deferred rent 267 Total interest-bearing and other liabilities $ 755,216 For further discussion of the notes payable and short-term convertible notes payable, refer to Note 11-“ Short-term Debt “ to these interim financial statements. |
Right-of-use Asset and Lease Li
Right-of-use Asset and Lease Liability | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Right-of-use Asset and Lease Liability | Note 5 – Right-of-use Asset And Lease Liability On January 9, 2019, the Company adopted ASU No. 2016-02 (as amended), and additional current liabilities of approximately $475,000 and long-term liabilities of approximately $713,000 with corresponding ROU assets of approximately $1,167,000 were recognized, based on the present value of the remaining minimum rental payments under the new leasing standards for existing operating leases. The consolidated balance sheet at March 31, 2020 reflects current lease liabilities of approximately $403,000 and long-term liabilities of $222,000, with corresponding ROU assets of $607,000. The audited consolidated balance sheet at December 31, 2019 reflects current lease liabilities of approximately $454,000 and long-term liabilities of $302,000, with corresponding ROU assets of $738,000. The components of lease expense for the three months ended March 31, 2020 and 2019, respectively, are as follows: Three months ended 2020 2019 Operating lease expense $ 150,564 $ 136,943 Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2020 and 2019, respectively, are as follows: Three months ended 2020 2019 Operating cash flows from operating leases $ 150,564 $ 136,943 Supplemental balance sheet and other information related to operating leases are as follows: March 31, 2020 December 31, 2019 Operating leases right-of-use assets $ 606,897 $ 738,453 Lease liability, current portion 402,876 453,734 Lease liability, net of current portion 221,710 302,175 Total operating lease liabilities $ 624,586 $ 755,909 Weighted average remaining lease term 2.16 years 2.25 years Weighted average discount rate 7.75 % 7.75 % Future maturities of operating lease liabilities as of March 31, 2020 are as follows: Operating leases Remainder of 2020 $ 353,601 2021 154,559 2022 102,891 2023 69,333 Total lease payments 680,384 Less interest (55,798 ) Total $ 624,586 Operating lease expense and cash flows from operating leases for the three months ended March 31, 2020 and 2019, totaled approximately $150,000 and $137,000, respectively, and are included in the “Other general and administrative” section of the consolidated statement of operations. The Company leases corporate office space in Tampa, FL and Atlanta, GA. The Company also leases medical clinic space in Tampa, FL, Nashville, TN, Scottsdale, AZ, Pittsburgh, PA, and Dallas, TX. The leasing arrangements contain various renewal options that are adjusted for increases in the consumer price index or agreed upon rates. Each location has its own expiration date ranging from April 30, 2020 to August 31, 2023. In May 2020, due to COVID-19, the Company entered into a three-month extension for the lease that expired on April 30, 2020. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 - Property And Equipment Property and equipment, net, consists of the following: Useful Life March 31, 2020 December 31, 2019 Furniture and fixtures 5-7 years $ 231,222 $ 231,222 Computers and software 3-7 years 244,039 244,039 Leasehold improvements 15 years 157,107 157,107 632,368 632,368 Less accumulated depreciation (434,772 ) (412,665 ) Total $ 197,596 $ 219,703 Depreciation expense was approximately $22,000 and $27,000 for the three months ended March 31, 2020 and 2019, respectively. The Company uses the straight-line depreciation method to calculate depreciation expense. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 7 - Intangible Assets And Goodwill The Company’s intangible assets are patents and related proprietary technology for the DenerveX System for which an impairment charge was made in the fourth quarter of 2019 writing off this asset as of December 31, 2019. For the three months ended March 31, 2020 and 2019, total amortization expense related to acquisition-related intangible assets was $0 and $184,000, respectively, and is included in operating expense in the accompanying consolidated statement of operations. Goodwill represents the excess of purchase price over fair value of net identified tangible and intangible assets and liabilities acquired in the Merger. As of December 31, 2019, the Company’s goodwill balance was determined to be impaired as of the balance sheet date and as a result, the Company recorded a goodwill impairment charge writing off the goodwill balance. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8 – Related Party Transactions Consulting Expense Effective February 1, 2019, the Company entered into an oral consulting agreement with Mr. Raymond Monteleone, Board Member and Chairman of the Audit Committee, in which Mr. Monteleone received $10,000 per month for advisory services and $5,000 per quarter as Audit Committee Chair in addition to regular quarterly board meeting fees. Effective March 25, 2020, the Company reduced the advisory services to $5,000 per month and the fees per quarter as the Audit Committee Chair to $2,500. For the three months ended March 31, 2020 and 2019, the Company has expensed approximately $30,000, and $35,000 in compensation to Mr. Monteleone, respectively. The Company entered into an oral consulting arrangement with St. Louis Family Office, LLC, controlled by Jimmy St. Louis, former CEO of RMS, in January 2019 in the amount of $10,000 per month plus benefits reimbursement for advisory services. The Company terminated this agreement effective June 30, 2019. For three months ended March 31, 2019, the Company expensed approximately $27,000 in consulting fees to St. Louis Family Office. The Company entered into a consulting agreement with Strategos Public Affairs, LLC (Strategos) on February 15, 2019 for a period of twelve months, unless otherwise terminated by giving thirty days prior written notice. A close family member of the Company’s CEO is a partner in Strategos. The monthly fee started at $4,500 and increased to approximately $7,500 per month. Strategos provided information to key policymakers in the legislature and executive branches of government on the benefits of the cellular therapies offered by LHI, advocated for legislation that supports policies beneficial to patient access and opposed any legislation that negatively impacts the Company’s ability to expand treatment opportunities, and position the Company and its related entities as the expert for information and testimony. The Company terminated this agreement in March 2020. For the three months ended March 31, 2020 and 2019, the Company expensed approximately $15,000 and $0, respectively. Officers and Board Members and Related Expenses In connection with the April Offering, the Company’s CEO William Horne entered into an amendment letter to his employment agreement which provides that his salary will be reduced to $0 per month; provided that on the date that the Company receives FDA approval to commence clinical trials for its products, Mr. Horne’s salary will be increased to a total of $18,750 per month, or $225,000 per annum. For the three months ended March 31, 2020 and 2019, the Company paid $0 in Board of Director fees to Michael Yurkowsky and to Raymond Monteleone. Debt and Other Obligations The short-term notes, related parties are detailed in Note 2 - “Liquidity, Going Concern and Management’s Plans” in this Form 10-Q. |
Equity Transactions
Equity Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity Transactions | Note 9 - Equity Transactions For the consolidated statement of stockholders’ deficit as of January 1, 2019, the common stock, preferred stock and additional paid in capital reflect the accounting for the stock received by the RMS members as of the Merger as if it was received as of that date and the historical accumulated deficit of RMS. As of the closing of the Merger, before the contingent additional exchange shares impact from the sale of new securities, the stock received by RMS was 33,661 shares of Series C Preferred Stock, which was later converted into approximately 33,661,000 shares of common stock, with common stock par value of approximately $33,700 and additional paid-in capital of approximately $3,566,000. The historical accumulated deficit and non-controlling interest of RMS as of the closing was approximately $9,296,000 and $370,000, respectively. Common Stock Issuance On January 8, 2019, the Company entered into a securities purchase agreement (the “SPA”) with four purchasers (the “Purchasers”) pursuant to which the four Purchasers invested in the Company an aggregate amount of $2,000,000, with $1,800,000 in cash and $200,000 by cancellation of debt as explained below, in exchange for forty units (the “Units”), each consisting of a convertible note (the “Convertible Note”) with the principal amount of $50,000 and a warrant (the “Warrant”) to purchase common stock (the “common stock”) of the Company at a purchase price of $0.75 per share. For further discussion of the SPA, refer to Note 9 - “Equity Transactions” to the consolidated financial statements in the Company’s Annual Report on Form 10-K is incorporated by reference herein. The Company entered into other SPA’s with additional purchasers, which brought the aggregate amount of capital raised in all these offerings to $7,000,000, as of April 5, 2019, excluding the shares issued for conversion of short-term debt, discussed below As a result of the sales of new securities of at least $5,650,000, the Company issued an additional 17,264 Series C Preferred Stock to RMS members in accordance with the provisions of the APA in the first quarter of 2019. These shares automatically converted to 17,263,889 shares of common stock. All the Convertible Notes from the SPA, as well as the shares of Series C Preferred Stock issued to RMS members, were automatically converted into shares of common stock at closing on January 8, 2019. In February 2019, 250,000 shares of common stock were issued pursuant to conversion of short-term debt and accrued interest. In March 2019, the Company issued an aggregate of 130,085 shares of common stock at $0.40 per share for consulting fees in an amount equivalent to $52,033. In August 2019, the Company issued 150,000 shares of common stock to consultants in consideration of consulting services rendered to the Company. At the time of issuance, the fair market value of the shares was $0.29, and, as a result, $43,500 was expensed for the year ending December 31, 2019. In February 2020, the Company issued LilyCon Investments $35,000 in shares of the Company’s common stock at a weighted average share price of $0.32 per share for a total of 109,375 shares per the terms of the consulting agreement executed in February 2019. Series B Preferred Stock Preferences Voting Rights Holders of Series B Preferred Stock (“Series B Holders”) have the right to receive notice of any meeting of holders of common stock or Series B Preferred Stock and to vote upon any matter submitted to a vote of the holders of common stock or Series B Preferred Stock. Each Series B Holder shall vote on each matter submitted to them with the holders of common stock. Liquidation Upon the liquidation or dissolution of the business of the Company, whether voluntary or involuntary, each Series B Holder shall be entitled to receive, for each share thereof, out of assets of the Company legally available therefore, a preferential amount in cash equal to the stated value plus all accrued and unpaid dividends. All preferential amounts to be paid to the Series B Holders in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Company’s to the holders of the Company’s common stock but after the Series D Holders receive their respective liquidation value. The Company accrues these dividends as they are earned each period. On January 8, 2019, the Company completed the issuance of Convertible Notes with a conversion price of $0.40. As a result, the exercise price on all of the warrants issued with the Series B Preferred Stock was adjusted downward to $0.36. In the first quarter of 2019, the Company recognized a beneficial conversion feature related to the Series B Preferred Stock of approximately $33,000, which was credited to additional paid-in capital, and reduced the income available to common shareholders. Since the Series B Preferred Stock can immediately be converted by the holder, the beneficial conversion feature was immediately accreted and recognized as a deemed dividend to the preferred shareholders. Series B preferred Stock Conversions and Repurchase During the year ended December 31, 2019, 9,250 shares of Series B Preferred Stock, par value $0.001, and accrued dividends were assumed with the Merger and an aggregate of 2,650 shares of Series B Preferred Stock, and accrued dividends, were subsequently converted into an aggregate of 715,279 shares of the Company’s common stock. Debt Conversion Convertible Notes and Promissory Note to Related Party The $750,000 convertible notes payable assumed in the Merger had a fair value of approximately $598,000 on the acquisition date. Subsequently, on February 6, 2019, $100,000 of the outstanding Convertible Notes was converted into an aggregate of 250,000 shares of common stock, eliminating $100,000 of the Company’s debt obligation. The debt was converted into shares of common stock at $0.40 per share, in accordance with the SPA. Stock-Based Compensation Plan 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. Stock Option Activity For the three months ended March 31, 2020 and 2019, the Company recognized approximately $600 and $89,000, respectively, as compensation expense with respect to vested stock options. Since these stock options were assumed on January 8, 2019 as part of the Merger, there were no historical costs related to this prior to January 8, 2019. The expense for the three months ended March 31, 2019 is primarily related to an option to purchase 250,000 shares of the Company’s common stock that was issued to the Company’s CEO pursuant to his employment agreement. These options were immediately vested upon issuance. As of March 31,2020, all outstanding stock options were fully vested, and related compensation expense recognized. The following is a summary of stock option activity for the quarters ending March 31, 2019 and March 31, 2020: Shares Weighted Average Exercise Price Weighted Average Remaining Term (Years) Outstanding at December 31, 2018 — — — Assumed with the RMS merger transaction 557,282 $ 2.78 6.99 Granted 250,000 0.40 — Expired (80,725 ) 1.52 — Outstanding at March 31, 2019 726,557 $ 1.95 7.74 Exercisable at March 31, 2019 695,418 $ 1.96 7.74 Outstanding at December 31, 2019 425,000 $ 1.38 7.71 Granted — — — Expired — — — Outstanding and exercisable at March 31, 2020 425,000 $ 1.38 7.46 Non-Controlling Interest For the three months ended March 31, 2020 and 2019, the Company consolidated the results for LI Dallas, LI Nashville, LI Pittsburgh and LI Scottsdale as VIEs. The Company owns no portion of any of these four entities which own their respective clinics; however, the Company maintains control through their management role for each of the clinics, in accordance with each clinic’s respective management agreement. Based on these agreements, the Company (RMS and RMS Management and now H-CYTE) has the responsibility to run and make decisions on behalf of the clinics, except for medical procedures. Beginning in January 2018, the Company adopted the policy for all of the VIEs that the management fee charged by the Company would equal the amount of net income from each VIE on a monthly basis, bringing the amount of the net income each month for each VIE to a net of zero. Due to this change in policy, there was no change in the non-controlling interest for the three months ended March 31, 2020 or 2019 related to the net income as it was $0 each month through the management fee charged by the Company. Net Loss Per Share 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 method. Any potentially dilutive securities are antidilutive due to the Company’s net losses. For the periods presented, there is no difference between the basic and diluted net loss per share: 45,319,643 warrants and 425,000 common stock options outstanding were considered anti-dilutive and excluded for the three months ended March 31, 2020. At March 31, 2020, the only potentially dilutive shares would be from the conversion of the convertible debt and the conversion of preferred stock, Series B and Series D totaling 38,308,600 of common stock to be issued upon conversion of all these securities. There were no option or warrant exercises that would have been potentially dilutive. |
Commitments & Contingencies
Commitments & Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | Note 10 – Commitments & Contingencies Litigation 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. As of March 31, 2020, the Company had no litigation matters which required any accrual or disclosure. Guarantee The Company has guaranteed payments based upon the terms found in the management services agreements to affiliated physicians related to LI Dallas, LI Nashville, LI Pittsburgh, LI Scottsdale, and LI Tampa. For three months ended March 31, 2020 and 2019, payments totaling approximately $22,000 and $22,000, respectively, were made to these physicians’ legal entities. Due to the Company ceasing operations effective March 23, 2020 in LI Dallas, LI Pittsburgh, LI Scottsdale, and LI Tampa, the guaranteed payments for these clinics will be suspended until operations recommence at the aforementioned clinics. Manufacturer Liability Dispute The Company selected an FDA registered contract manufacturer, to manufacture the DenerveX product. In 2019, the Company became aware of events which resulted in the manufacturer not meeting certain contract performance requirements. As a result, the Company is in a dispute with the manufacturer. The Company intends to vigorously defend its position that the manufacturer did not meet its contract performance obligations. The Company believes the likelihood of incurring a material loss regarding the dispute with the manufacturer is reasonably possible but is unable to estimate the amount of the loss based on information available at this time. As such, the Company has not recorded a loss as of March 31, 2020 or December 31, 2019. The Company is not aware of any legal action regarding this matter. |
Short-Term Debt
Short-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term Debt | Note 11 – Short-term Debt Convertible note The Convertible Notes payable represents a securities purchase agreement with select accredited investors, which was assumed in the Merger. The debt assumed by the Company consisted of $750,000 of units (the “Units”) with a purchase price of $50,000 per Unit. Each Unit consists of (i) a 12% senior secured convertible note, initially convertible into shares of the Company’s common stock, par value $0.001 per share, at a conversion price equal to the lesser of $0.40 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of equity and/or debt securities completed by the Company following this offering, and (ii) a three-year warrant to purchase such number of shares of the Company’s common stock equal to one hundred percent (100%) of the number of shares of common stock issuable upon conversion of the notes at $0.40. The Warrants were initially exercisable at a price equal to the lesser of $0.75 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of the debt and/or equity securities completed by the Company following the issuance of warrants. The Convertible Notes are secured by all of the assets of the Company. The Convertible Notes sold in the offering were initially convertible into an aggregate of 1,875,000 shares of common stock. The down round feature was triggered on January 8, 2019, and the conversion price of the Convertible Notes was adjusted to $0.36. The Company recognized the down round as a deemed dividend of approximately $288,000 which reduced the income available to common stockholders. On February 6, 2019, $100,000 of the Company’s $750,000 outstanding Convertible Notes, plus accrued interest, was converted into an aggregate of 251,667 shares of common stock, eliminating $100,000 of the Company’s debt obligation. The debt was converted into shares at $0.36 per share, which was the conversion price per the SPA subsequent to the trigger of the down round feature. In 2019, the Company redeemed $350,000 of convertible notes payable in principal and $52,033 in interest payable for three of the noteholders. The Company also reached an extension with the remaining noteholder which extended the maturity date of the loan for one year, until September 30, 2020. This note had a principal balance of $300,000 plus penalties of approximately $85,000 and accrued interest of approximately $40,000 for a total adjusted principal balance upon renewal of approximately $425,000 as of March 31, 2020 and December 31, 2019. Additionally, approximately 424,000 warrants were issued on September 15, 2019 in connection with the extension of the note. Notes Payable Notes payable were assumed in the Merger 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 $67,000 and $78,000 at March 31, 2020 and December 31, 2019. On March 27, 2020, the Company issued a Note in the principal amount of $500,000 to the Investor for a total of $500,000 in exchange for a loan in such amount to cover working capital needs. The Note bears an interest rate of 8.0% per annum and is due on demand. If any amounts payable under this Note are not paid within ten days after they are due, the interest rate shall accrue on the Principal in the amount of 18.0% per annum. The Investor is an affiliate of a pre-existing shareholder of the Company having been the lead investor in the Company’s recent Series D Convertible Preferred Stock Offering. |
Derivative Liability -Warrants
Derivative Liability -Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability -Warrants | Note 12 – Derivative Liability - Warrants Financial assets and liabilities carried at fair value as of March 31, 2020 and December 31, 2019 are classified in the tables below in one of the three categories: Fair Value Measurement at Using Total Liability: Derivative Liability - Warrants $ 140,877 $ 140,877 Derivative Put Liability $ 79,045 $ 79,045 Fair Value Measurement at Using Total Liability: Derivative Liability - Warrants $ 315,855 $ 315,855 Derivative Put Liability $ 267,399 $ 267,399 (1) The Company did not have any assets or liabilities measured at fair value using Level 1 or 2 of the fair value hierarchy as of March 31, 2020 and December 31, 2019. The Company’s derivative liabilities are classified within Level 3 of the fair value hierarchy because certain unobservable inputs were used in the valuation models. These assumptions included estimated future stock prices, potential down-round financings for the Warrants, and potential redemptions for the Redemption Put Liability. The following is a reconciliation of the beginning and ending balances for the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2020 and the year ended December 31, 2019: Derivative Liability - Warrants Balance at December 31, 2019 $ 315,855 Fair value adjustments (174,978 ) Balance at March 31, 2020 $ 140,877 Redemption Put Liability Balance at December 31, 2019 $ 267,399 Issuance of Series D Convertible Preferred Stock 5,305 Fair value adjustments (193,659 ) Balance at March 31, 2020 $ 79,045 Derivative Liability- Warrants In connection with the securities purchase agreements executed in May 2018 (which the Company assumed in the Merger), whereby 108,250 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Shares”) and warrants were issued to purchase 2,312,500 shares of the Company’s common stock (“Series B Warrants”). The Series B Warrants had a three-year term at an exercise price of $0.75. The Series B Warrants contain two features such that in the event of a downward price adjustment the Company is required to reduce the strike price of the existing warrants (first feature or “down round”) and issue additional warrants to the award holders such that the aggregate exercise price after taking into account the adjustment, will equal the aggregate exercise price prior to such adjustment (second feature or “additional issuance”). On January 8, 2019, the Company issued equity securities which triggered the down round and additional issuance warrant features. As a result, the exercise price of the warrants was lowered from $0.75 to $0.40 and 2,023,438 additional warrants were issued. The inclusion of the additional issuance feature caused the warrants to be accounted for as liabilities in accordance with ASC Topic 815. The fair market value of the warrants, approximately $1,200,000, was recorded as a derivative liability as a measurement period adjustment to the purchase price allocation in the third quarter of 2019. The derivative liability has been remeasured to fair value at the end of each reporting period and the change in fair value, of approximately $175,000 and $0, has been recorded as a component of other income (expense) in the Company’s consolidated statement of operations for the three months ended March 31, 2020 and 2019, respectively. The fair value of the derivative liability included on the consolidated balance sheet was approximately $141,000 and $316,000 as of March 31, 2020 and December 31, 2019, respectively. Fair values for the Series B Warrants were determined using a Lattice model which considered randomly generated stock-price paths obtained through a Geometric Brownian Motion stock price simulation. The Company estimated the fair value of the warrant derivative liability as of March 31, 2020 and December 31, 2019, respectively, using the following assumptions: March 31, 2020 December 31, 2019 Fair value of underlying stock $ 0.051 $ 0.13 Exercise price $ 0.40 $ 0.40 Risk free rate 0.17 – 0.23 % 1.58 – 1.59 % Expected term (in years) 1.09 – 1.77 1.34 – 2.02 Stock price volatility 156 – 166 % 143 - 154 % Expected dividend yield — — Due to the down round provision contained in the warrants, which could provide for the issuance of additional warrant shares as well as a reduction in the exercise price, the model also considered subjective assumptions related to the shares that would be issued in a down-round financing and the potential adjustment to the exercise price. The fair value of the warrants will be significantly influenced by the fair value of the Company’s stock price, stock price volatility, changes in interest rates and management’s assumptions related to the down-round provisions. On November 15, 2019, the Company redeemed a shareholder’s Series B Preferred shares for its initial face value, plus accrued dividends. In conjunction with the Series D Preferred financing (See Note 14), the Company offered the Series B warrant holders the option to exchange their warrants on the basis of 1 warrant for 0.40 common shares. Warrant holders chose to exchange 1,007,813 warrants with a fair value of approximately $75,000 for 403,125 shares of common stock with a fair value of approximately $73,000. On the date of the exchange, the Series B Warrants were first adjusted to fair value with the change in fair value being recorded in earnings. Redemption Put Liability As described in Note 14, the redemption put provision embedded in the Series D financing required bifurcation and measurement at fair value as a derivative. If the redemption put provision is triggered, it allows either payment in cash or the issuance of “Trigger Event Warrants”. Accordingly, the fair value of the Redemption put liability considered management’s estimate of the probability of cash payment versus payment in Trigger Event Warrants and was valued using a Monte Carlo Simulation which uses randomly generated stock-price paths obtained through a Geometric Brownian Motion stock price simulation. The fair value of the redemption provision will be significantly influenced by the fair value of the Company’s stock price, stock price volatility, changes in interest rates and management’s assumptions related to the redemption factor. The Company estimated the fair value of the Trigger Event Warrant portion of the redemption put liability using the following assumptions on March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Fair value of underlying stock $ 0.019 $ 0.056 Exercise price $ 0.20409 $ 0.20409 Risk free rate 0.70 % 1.92 % Expected term (in years) 9.7 9.9 Stock price volatility 95 % 92 % Expected dividend yield — — The fair market value of the redemption put liability at inception was approximately $614,000 which has been recorded as a liability and is remeasured to fair value at the end of each reporting period. The change in fair value of approximately $194,000 and $0 has been recorded as a component of other income (expense) in the Company’s consolidated statement of operations for the three months ended March 31, 2020 and 2019, respectively. The fair value of the redemption put liability included on the consolidated balance sheet was approximately $79,000 and $267,000 as of March 31, 2020 and December 31, 2019, respectively. |
Common Stock Warrants
Common Stock Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Common Stock Warrants | |
Common Stock Warrants | Note 13 - Common Stock Warrants A summary of the Company’s warrant issuance activity and related information for the quarters ended March 31, 2020 and March 31, 2019: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Assumed as of the January 8, 2019 merger 12,108,743 $ 1.38 2.60 Issued 17,500,000 0.75 2.84 Outstanding and exercisable at March 31, 2019 29,608,743 $ 1.00 2.63 Outstanding and exercisable at December 31, 2019 44,806,076 $ 0.78 4.59 Issued 513,567 0.75 6.13 Outstanding and exercisable at March 31, 2020 45,319,643 $ 0.78 4.61 The fair value of all warrants issued are determined by using the Black-Scholes valuation technique and were assigned based on the relative fair value of both the common stock and the warrants issued. The inputs used in the Black-Scholes valuation technique to value each of the warrants as of their respective issue dates are as follows: 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 (%) Private placement 1/8/2019 5,000,000 $ 0.40 $ 0.75 $ 0.24 3 years 2.57 115.08 Antidilution provision (1) 1/8/2019 2,023,438 $ 0.40 $ 0.40 $ 0.28 3 years 2.57 115.08 Private placement 1/18/2019 6,000,000 $ 0.40 $ 0.75 $ 0.23 3 years 2.60 114.07 Private placement 1/25/2019 1,250,000 $ 0.59 $ 0.75 $ 0.38 3 years 2.43 113.72 Private placement 1/31/2019 437,500 $ 0.54 $ 0.75 $ 0.34 3 years 2.43 113.47 Private placement 2/7/2019 750,000 $ 0.57 $ 0.75 $ 0.36 3 years 2.46 113.23 Private placement 2/22/2019 375,000 $ 0.49 $ 0.75 $ 0.30 3 years 2.46 113.34 Private placement 3/1/2019 125,000 $ 0.52 $ 0.75 $ 0.33 3 years 2.54 113.42 Private placement 3/8/2019 150,000 $ 0.59 $ 0.75 $ 0.38 3 years 2.43 113.53 Private placement 3/11/2019 2,475,000 $ 0.61 $ 0.75 $ 0.40 3 years 2.45 113.62 Private placement 3/26/2019 500,000 $ 0.51 $ 0.75 $ 0.32 3 years 2.18 113.12 Private placement 3/28/2019 375,000 $ 0.51 $ 0.75 $ 0.31 3 years 2.18 112.79 Private placement 3/29/2019 62,500 $ 0.51 $ 0.75 $ 0.31 3 years 2.21 112.79 Private placement 4/4/2019 500,000 $ 0.48 $ 0.75 $ 0.29 3 years 2.29 112.77 Private placement 7/15/2019 200,000 $ 0.53 $ 1.00 $ 0.31 3 years 1.80 115.50 Convertible debt extension 9/18/2019 424,000 $ 0.40 $ 0.75 $ 0.25 3 years 1.72 122.04 Private placement of Series D Convertible Preferred Stock 11/15/2019 14,669,757 $ 0.28 $ 0.75 $ 0.19 10 years 1.84 89.75 Short-term note related party 11/26/2019 400,000 $ 0.20 $ 0.75 $ 0.13 3 years 1.58 144.36 Short-term note, related party 12/30/2019 171,429 $ 0.14 $ 0.75 $ 0.08 3 years 1.59 145.29 Short-term note, related party 1/13/2020 268,571 $ 0.12 $ 0.75 $ 0.07 3 years 1.60 145.76 Private placement of Series D Convertible Preferred Stock 1/17/2020 244,996 $ 0.15 $ 0.75 $ 0.13 10 years 1.84 144.32 (1) 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. |
Mezzanine Equity and Series D C
Mezzanine Equity and Series D Convertible Preferred Stock | 3 Months Ended |
Mar. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Mezzanine Equity and Series D Convertible Preferred Stock | Note 14- Mezzanine Equity and Series D Convertible Preferred Stock Series D Convertible preferred Stock On November 15, 2019, the Company entered into a securities purchase agreement with selected accredited investors whereby the Company offered (i) up to 238,871 shares of Series D Convertible Preferred Stock the (“Series D Shares”) at a price of $40.817 per share and (ii) a ten-year warrant (the “Series D Warrant”) to purchase 14,669,757 shares of common stock. The Series D Warrants are exercisable for a period of 10 years from issuance at an initial exercise price of $0.75 per share, subject to adjustment for traditional equity restructurings and reorganizations. On November 21,2019, the Company entered into a securities purchase agreement with FWHC HOLDINGS, LLC (“FWHC”) an accredited investor for the purchase of 146,998 shares of Series D Preferred Stock, par value $0.001 per share and the Series D Warrant resulting in $6.0 million in gross proceeds to the Company (the “FWHC Investment”). For further discussion of the Series D Shares, refer to Note 14 - “Mezzanine Equity and Series D Convertible Preferred Stock” on the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2019. The Company determined that the nature of the Series D Shares was more analogous to an equity instrument, and that the economic characteristics and risks of the embedded conversion option was clearly and closely related to the Series D Shares. As such, the conversion option was not required to be bifurcated from the host under ASC 815, Derivatives and Hedging The Company determined that the economic characteristics and risks of the embedded redemption provision were not clearly and closely related to the Series D Shares. The Company assessed the embedded redemption provision further, and determined it met the definition of a derivative and required classification as a derivative liability at fair value. The redemption put liability as of March 31, 2020 and December 31, 2019, was approximately $79,000 and $267,000, respectively. The Company’s approach to the allocation of the proceeds to the financial instruments was to first allocate basis to the redemption put liability at its fair values and the residual to the Series D Shares and the Series D Warrants. Based upon the amount allocated to the Series D Shares the Company was required to determine if a beneficial conversion feature (“BCF”) was present. A BCF represents the intrinsic value in the convertible instrument, adjusted for amounts allocated to other financial instruments issued in the financing. The effective conversion price is calculated as the amount allocated to the convertible instrument divided by the number of shares to which it is indexed. However, a BCF is limited to the basis initially allocated. After allocating a portion of the proceeds to the other instruments, the effective conversion price was $0.24 compared to the share price of $0.28, resulting in a BCF of $623,045 or $0.04 per share. Based upon the above accounting conclusions and the additional information provided below, the allocation of the proceeds arising from the Series D Preferred financing transaction is summarized in the table below: November 21, 2019 Series D Convertible Preferred and warrant financing: Proceeds Allocation Financing Cost Allocation Total Allocation Gross proceeds $ 6,000,000 $ — $ 6,000,000 Financing costs paid in cash — (111,983 ) (111,983 ) $ 6,000,000 $ (111,983 ) $ 5,888,017 Derivative Liability: Derivative Put Liability $ (614,095 ) $ — $ (614,095 ) Deferred Financing costs — 8,100 8,100 Redeemable preferred stock: Series D Convertible Preferred Stock (2,869,854 ) — (2,869,854 ) Financing costs (APIC) — 1,106 1,106 Financing costs (Retained Earnings) — 66,265 66,265 Beneficial Conversion Feature (623,045 ) — (623,045 ) Investor Warrants (equity classified): Proceeds allocation (1,893,006 ) — (1,893,006 ) Financing costs (APIC) — 36,512 36,512 $ (6,000,000 ) $ 111,983 $ (5,888,017 ) Since the Series D Convertible Preferred Stock is perpetual and convertible at any time, the resulting discount of $3,130,146 was accreted as a Preferred Stock dividend on the date of issuance to record the Series D Convertible Preferred Stock to its redemption value of $6,000,000. On January 17, 2020, the Company entered into a securities purchase agreement with an accredited investor for the purchase of 2,450 shares of Series D Preferred Stock, par value $0.001 per share and a Series D Warrant resulting in $100,000 in gross proceeds to the Company. The Series D Preferred Stock and Warrants had the same terms as the FWHC Investment. There was no BCF associated with this financing because the effective conversion price after allocating a portion of the proceeds to the other instruments was higher than the share price. January 17, 2020 Series D Convertible Preferred and warrant financing: Proceeds Allocation Gross proceeds $ 100,000 Financing costs paid in cash — $ 100,000 Derivative Liability: Derivative Put Liability $ (5,305 ) Redeemable preferred stock: Series D Convertible Preferred Stock (62,793 ) Investor Warrants (equity classified): Proceeds allocation (31,902 ) $ (100,000 ) Since the Series D Convertible Preferred Stock is perpetual and convertible at any time, the resulting discount of $37,207 was accreted as a Preferred Stock dividend on the date of issuance to record the Series D Convertible Preferred Stock to its redemption value of $100,000. For the three months ended March 31, 2020, the Company recorded $158,147 in deemed dividends on the Series D Convertible Preferred stock in accordance with the 8% stated dividend resulting in a total balance of Series D Convertible Preferred stock of $6,281,433 at March 31, 2020. Series D CONVERTIBLE Preferred Stock Preferences Voting Rights Holders of our Series D Preferred Stock (“Series D Holders”) have the right to receive notice of any meeting of holders of common stock or Series D Preferred Stock and to vote upon any matter submitted to a vote of the holders of common stock or Series D Preferred Stock. Each Series D Holder shall vote on each matter submitted to them with the holders of common stock. Liquidation Upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, each Series D Holder shall be entitled to receive, for each share thereof, out of assets of the Company legally available therefore, a preferential amount in cash equal to the stated value plus all accrued and unpaid dividends. All preferential amounts to be paid to the Series D Holders in connection with such liquidation, dissolution or winding up shall be paid before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Company’s to the holders of the Company’s Series B and common stock. The Company accrues these dividends as they are earned each period. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | N ote 15 - Subsequent Events On April 9, 2020, in exchange for an additional loan of $500,000 made by the Investor to the Company to further cover the Company’s working capital needs, the Company amended and restated the Note to reflect a new principal amount of $1,000,000 (the “A&R Note”). The A&R Note bears simple interest at a rate of 12% per annum. The Investor is an affiliate of FWHC Holdings, LLC, a pre-existing shareholder of the Company, which served as lead investor in the Company’s recent Series D Convertible Preferred Stock Offering. As discussed further below in “Note Purchase Agreement”, this A&R Note was further amended and superseded by an April Secured Note in the amount of $1,000,000 issued by the Company to the Investor. Note Purchase Agreement On April 17, 2020, and in subsequent April closings, the Company entered into a Secured Convertible Note and Warrant Purchase Agreement (the “April SPA”) with thirty three investors (the “Purchasers”) pursuant to which the Company received an aggregate of $2,835,195 in gross proceeds through the sale to the Purchasers of Secured Convertible Promissory Notes (the “April Secured Notes”) and warrants (the “April Warrants”) to purchase shares of common stock of the Company (the “April Offering”). The proceeds of the April Offering will be used for working capital and general corporate purposes. The April Offering resulted in the issuance of April Secured Notes to Purchasers in an aggregate principal amount of $3,835,195. This sum included the issuance by the Company to the Investor of an April Secured Note in the amount of $1,000,000 to amend and supersede the A&R Note previously issued by the Company to the Investor on April 9, 2020. Additionally, in connection with the April Offering, the Company entered into an amendment with the Investor with respect to the outstanding 12% Senior Secured Convertible Note due September 30, 2020, which was originally issued in 2018 and assumed in the Merger and which was purchased by the Investor from its original holder, George Hawes, on March 27, 2020 (the “Hawes Note”). The Hawes Notes had a principal amount of $424,615 as of March 31, 2020 and December 31, 2019. The amendment to the Hawes Note among other things, eliminates the requirement that the Company make monthly payments of accrued interest. The Hawes Note is expected to convert into shares of preferred stock of the Company offered for purchase at the Qualified Financing at the closing of the Qualified Financing. As part of the April Offering, the holders of certain existing warrants issued by the Company which contained anti-dilution price protection entered into agreements terminating all anti-dilution price protection in their warrants. The Company intends to implement a one-time reduction of the exercise price of such warrants to be equal to the price per share at which shares of preferred stock are offered for purchase at the Qualified Financing once that price has been established. Debt and Other Obligations On April 23, 2020, Horne Management, LLC agreed to convert the short-term notes, related parties totaling $1,635,000 as of March 31, 2020 plus accrued interest into (i) 4,368,278 shares of common stock of the Company and (ii) a ten-year warrant to purchase up to an equivalent number of shares of the Company’s common stock with such conversion to be effective as of April 17, 2020. This warrant will have an exercise price equal to the price per share at which securities are offered to investors for purchase at the Qualified Financing, which such price has not yet been established, and is exercisable beginning on the day immediately following the earlier to occur of (x) the closing of the Qualified Financing and (y) November 1, 2020. If the Qualified Financing does not occur on or prior to October 31, 2020, the exercise price of the warrant will be equal to the price per share obtained by dividing $3,000,000 by the number of fully diluted shares of the Company outstanding on October 31, 2020. The description of the April SPA, the April Secured Note, the April Warrant, the Security Agreement, the Intellectual Property Security Agreement and the Amendment to William Horne Employment Agreement and the Hawes Note, are each qualified in their entirety by the full text of such agreements which are filed as Exhibits to the Annual Report on Form 10-K. 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 Payroll Protection Program (“PPP Loan”). The PPP Loan bears interest at a rate of 1% per annum and is payable in eighteen monthly payments of $45,533 commencing six months from the date of the note on November 29, 2020. While the note is dated April 29, 2020, the loan was not formally approved and funded until May 7, 2020. The Company can apply for loan forgiveness in an amount equal to the sum of the following costs incurred by the Company: 1) payroll costs; 2) any payment of interest on covered mortgage obligations; 3) any payment on a covered rent obligation; and 4) any covered utility payment The amount forgiven will be calculated (and may be reduced) in accordance with the Paycheck Protection Program. Not more than 25% of the amount forgiven can be attributed to non-payroll costs. On May 7, 2020, William Horne, the Company’s CEO and Chairman resigned as CEO effective when the Company finds a suitable replacement who has more FDA experience. Until such successor is retained, Mr. Horne will remain as the CEO. Mr. Horne’s resignation does not go to his position as Chairman of the Board or as a Director. The resignation was not as a result of any disagreement with the Company or its policies and practices. The Company has evaluated subsequent events occurring through the date that the financial statements were available to be issued for events requiring recording or disclosure in the March 31, 2020 consolidated financial statements. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Consideration Transferred | The acquisition-date fair value of the consideration transferred is as follows: Common shares issued and outstanding 24,717,270 Common shares reserved for issuance upon conversion of the outstanding Series B Preferred Stock 2,312,500 Total Common shares 27,029,770 Closing price per share of MedoveX Common stock on January 8, 2019 $ 0.40 10,811,908 Fair value of outstanding warrants and options 2,220,000 Cash consideration to RMS (350,000 ) Total consideration $ 12,681,908 |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition on January 8, 2019: Cash $ (302,710 ) Accounts receivable 145,757 Inventory 131,455 Prepaid expenses 46,153 Property and equipment 30,393 Other 2,751 Intangibles 3,680,000 Goodwill 12,564,401 Total assets acquired $ 16,298,200 Accounts payable and other accrued liabilities 1,645,399 Derivative liability 1,215,677 Interest-bearing liabilities and other 755,216 Net assets acquired $ 12,681,908 |
Schedule of Interest Bearing and Other Liabilities Assumed | Total interest-bearing liabilities and other liabilities assumed are as follows: Notes payable $ 99,017 Short-term convertible notes payable 598,119 Dividend payable 57,813 Deferred rent 267 Total interest-bearing and other liabilities $ 755,216 |
Right-of-use Asset and Lease _2
Right-of-use Asset and Lease Liability (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense for the three months ended March 31, 2020 and 2019, respectively, are as follows: Three months ended 2020 2019 Operating lease expense $ 150,564 $ 136,943 |
Schedule of Cash Paid for Amounts Included the Measurement of Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2020 and 2019, respectively, are as follows: Three months ended 2020 2019 Operating cash flows from operating leases $ 150,564 $ 136,943 |
Schedule of Supplemental Balance Sheet and Other Information | Supplemental balance sheet and other information related to operating leases are as follows: March 31, 2020 December 31, 2019 Operating leases right-of-use assets $ 606,897 $ 738,453 Lease liability, current portion 402,876 453,734 Lease liability, net of current portion 221,710 302,175 Total operating lease liabilities $ 624,586 $ 755,909 Weighted average remaining lease term 2.16 years 2.25 years Weighted average discount rate 7.75 % 7.75 % |
Schedule of Maturities of Lease Liabilities | Future maturities of operating lease liabilities as of March 31, 2020 are as follows: Operating leases Remainder of 2020 $ 353,601 2021 154,559 2022 102,891 2023 69,333 Total lease payments 680,384 Less interest (55,798 ) Total $ 624,586 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consists of the following: Useful Life March 31, 2020 December 31, 2019 Furniture and fixtures 5-7 years $ 231,222 $ 231,222 Computers and software 3-7 years 244,039 244,039 Leasehold improvements 15 years 157,107 157,107 632,368 632,368 Less accumulated depreciation (434,772 ) (412,665 ) Total $ 197,596 $ 219,703 |
Equity Transactions (Tables)
Equity Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Stock Option Activity | The following is a summary of stock option activity for the quarters ending March 31, 2019 and March 31, 2020: Shares Weighted Average Exercise Price Weighted Average Remaining Term (Years) Outstanding at December 31, 2018 — — — Assumed with the RMS merger transaction 557,282 $ 2.78 6.99 Granted 250,000 0.40 — Expired (80,725 ) 1.52 — Outstanding at March 31, 2019 726,557 $ 1.95 7.74 Exercisable at March 31, 2019 695,418 $ 1.96 7.74 Outstanding at December 31, 2019 425,000 $ 1.38 7.71 Granted — — — Expired — — — Outstanding and exercisable at March 31, 2020 425,000 $ 1.38 7.46 |
Derivative Liability -Warrants
Derivative Liability -Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Derivative Liabilities at Fair Value | Financial assets and liabilities carried at fair value as of March 31, 2020 and December 31, 2019 are classified in the tables below in one of the three categories: Fair Value Measurement at Using Total Liability: Derivative Liability - Warrants $ 140,877 $ 140,877 Derivative Put Liability $ 79,045 $ 79,045 Fair Value Measurement at Using Total Liability: Derivative Liability - Warrants $ 315,855 $ 315,855 Derivative Put Liability $ 267,399 $ 267,399 (1) The Company did not have any assets or liabilities measured at fair value using Level 1 or 2 of the fair value hierarchy as of March 31, 2020 and December 31, 2019. |
Schedule of Fair Value, Liabilities Measured On Recurring Basis | The following is a reconciliation of the beginning and ending balances for the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2020 and the year ended December 31, 2019: Derivative Liability - Warrants Balance at December 31, 2019 $ 315,855 Fair value adjustments (174,978 ) Balance at March 31, 2020 $ 140,877 Redemption Put Liability Balance at December 31, 2019 $ 267,399 Issuance of Series D Convertible Preferred Stock 5,305 Fair value adjustments (193,659 ) Balance at March 31, 2020 $ 79,045 |
Derivative Liability- Warrants [Member] | |
Schedule of Assumptions for Warrants | The Company estimated the fair value of the warrant derivative liability as of March 31, 2020 and December 31, 2019, respectively, using the following assumptions: March 31, 2020 December 31, 2019 Fair value of underlying stock $ 0.051 $ 0.13 Exercise price $ 0.40 $ 0.40 Risk free rate 0.17 – 0.23 % 1.58 – 1.59 % Expected term (in years) 1.09 – 1.77 1.34 – 2.02 Stock price volatility 156 – 166 % 143 - 154 % Expected dividend yield — — |
Redemption Liability [Member] | |
Schedule of Assumptions for Warrants | The Company estimated the fair value of the Trigger Event Warrant portion of the redemption put liability using the following assumptions on March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Fair value of underlying stock $ 0.019 $ 0.056 Exercise price $ 0.20409 $ 0.20409 Risk free rate 0.70 % 1.92 % Expected term (in years) 9.7 9.9 Stock price volatility 95 % 92 % Expected dividend yield — — |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Warrant Activity | A summary of the Company’s warrant issuance activity and related information for the quarters ended March 31, 2020 and March 31, 2019: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Assumed as of the January 8, 2019 merger 12,108,743 $ 1.38 2.60 Issued 17,500,000 0.75 2.84 Outstanding and exercisable at March 31, 2019 29,608,743 $ 1.00 2.63 Outstanding and exercisable at December 31, 2019 44,806,076 $ 0.78 4.59 Issued 513,567 0.75 6.13 Outstanding and exercisable at March 31, 2020 45,319,643 $ 0.78 4.61 |
Schedule of Assumptions for Warrants | The fair value of all warrants issued are determined by using the Black-Scholes valuation technique and were assigned based on the relative fair value of both the common stock and the warrants issued. The inputs used in the Black-Scholes valuation technique to value each of the warrants as of their respective issue dates are as follows: 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 (%) Private placement 1/8/2019 5,000,000 $ 0.40 $ 0.75 $ 0.24 3 years 2.57 115.08 Antidilution provision (1) 1/8/2019 2,023,438 $ 0.40 $ 0.40 $ 0.28 3 years 2.57 115.08 Private placement 1/18/2019 6,000,000 $ 0.40 $ 0.75 $ 0.23 3 years 2.60 114.07 Private placement 1/25/2019 1,250,000 $ 0.59 $ 0.75 $ 0.38 3 years 2.43 113.72 Private placement 1/31/2019 437,500 $ 0.54 $ 0.75 $ 0.34 3 years 2.43 113.47 Private placement 2/7/2019 750,000 $ 0.57 $ 0.75 $ 0.36 3 years 2.46 113.23 Private placement 2/22/2019 375,000 $ 0.49 $ 0.75 $ 0.30 3 years 2.46 113.34 Private placement 3/1/2019 125,000 $ 0.52 $ 0.75 $ 0.33 3 years 2.54 113.42 Private placement 3/8/2019 150,000 $ 0.59 $ 0.75 $ 0.38 3 years 2.43 113.53 Private placement 3/11/2019 2,475,000 $ 0.61 $ 0.75 $ 0.40 3 years 2.45 113.62 Private placement 3/26/2019 500,000 $ 0.51 $ 0.75 $ 0.32 3 years 2.18 113.12 Private placement 3/28/2019 375,000 $ 0.51 $ 0.75 $ 0.31 3 years 2.18 112.79 Private placement 3/29/2019 62,500 $ 0.51 $ 0.75 $ 0.31 3 years 2.21 112.79 Private placement 4/4/2019 500,000 $ 0.48 $ 0.75 $ 0.29 3 years 2.29 112.77 Private placement 7/15/2019 200,000 $ 0.53 $ 1.00 $ 0.31 3 years 1.80 115.50 Convertible debt extension 9/18/2019 424,000 $ 0.40 $ 0.75 $ 0.25 3 years 1.72 122.04 Private placement of Series D Convertible Preferred Stock 11/15/2019 14,669,757 $ 0.28 $ 0.75 $ 0.19 10 years 1.84 89.75 Short-term note related party 11/26/2019 400,000 $ 0.20 $ 0.75 $ 0.13 3 years 1.58 144.36 Short-term note, related party 12/30/2019 171,429 $ 0.14 $ 0.75 $ 0.08 3 years 1.59 145.29 Short-term note, related party 1/13/2020 268,571 $ 0.12 $ 0.75 $ 0.07 3 years 1.60 145.76 Private placement of Series D Convertible Preferred Stock 1/17/2020 244,996 $ 0.15 $ 0.75 $ 0.13 10 years 1.84 144.32 |
Mezzanine Equity and Series D_2
Mezzanine Equity and Series D Convertible Preferred Stock (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Series D Convertible Preferred and Warrant Financing | Based upon the above accounting conclusions and the additional information provided below, the allocation of the proceeds arising from the Series D Preferred financing transaction is summarized in the table below: November 21, 2019 Series D Convertible Preferred and warrant financing: Proceeds Allocation Financing Cost Allocation Total Allocation Gross proceeds $ 6,000,000 $ — $ 6,000,000 Financing costs paid in cash — (111,983 ) (111,983 ) $ 6,000,000 $ (111,983 ) $ 5,888,017 Derivative Liability: Derivative Put Liability $ (614,095 ) $ — $ (614,095 ) Deferred Financing costs — 8,100 8,100 Redeemable preferred stock: Series D Convertible Preferred Stock (2,869,854 ) — (2,869,854 ) Financing costs (APIC) — 1,106 1,106 Financing costs (Retained Earnings) — 66,265 66,265 Beneficial Conversion Feature (623,045 ) — (623,045 ) Investor Warrants (equity classified): Proceeds allocation (1,893,006 ) — (1,893,006 ) Financing costs (APIC) — 36,512 36,512 $ (6,000,000 ) $ 111,983 $ (5,888,017 ) January 17, 2020 Series D Convertible Preferred and warrant financing: Proceeds Allocation Gross proceeds $ 100,000 Financing costs paid in cash — $ 100,000 Derivative Liability: Derivative Put Liability $ (5,305 ) Redeemable preferred stock: Series D Convertible Preferred Stock (62,793 ) Investor Warrants (equity classified): Proceeds allocation (31,902 ) $ (100,000 ) |
Description of the Company (Det
Description of the Company (Details Narrative) - USD ($) | Jun. 21, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Revenue from product | $ 1,016,776 | $ 1,800,000 | $ 1,324,240 | |
Product Supply Agreement [Member] | Rion LLC [Member] | ||||
Agreement term | 10 years | |||
Product Supply Agreement [Member] | Rion LLC [Member] | Maximum [Member] | ||||
Revenue from product | $ 100,000 |
Liquidity, Going Concern and _2
Liquidity, Going Concern and Management's Plans (Details Narrative) - USD ($) | Apr. 23, 2020 | Apr. 17, 2020 | Apr. 17, 2020 | Apr. 09, 2020 | Mar. 27, 2020 | Mar. 23, 2020 | Feb. 28, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | May 15, 2020 | May 13, 2020 | Mar. 26, 2020 |
Employee layoff percentage | 40.00% | ||||||||||||
Net loss | $ (2,416,228) | $ (3,694,816) | |||||||||||
Revenue | 1,016,776 | $ 1,800,000 | $ 1,324,240 | ||||||||||
Debt principal amount | 424,615 | 424,615 | |||||||||||
Short-term notes | 424,615 | 424,615 | |||||||||||
Debt conversion of common stock shares | 250,000 | ||||||||||||
Fair value of warrants | 73,000 | ||||||||||||
Cash on hand | 122,400 | 1,424,096 | |||||||||||
Investor [Member] | |||||||||||||
Debt principal amount | $ 500,000 | ||||||||||||
Debt interest rate | 8.00% | ||||||||||||
Debt interest rate description | If any amounts payable under this Note are not paid within ten days after they are due, the interest rate shall accrue on the Principal in the amount of 18.0% per annum. | ||||||||||||
William E. Horne [Member] | Horne Management, LLC [Member] | |||||||||||||
Debt interest rate | 5.50% | ||||||||||||
Short-term notes | $ 1,635,000 | 1,635,000 | |||||||||||
Debt interest rate description | The loans bear interest ranging from 5.5% to 12%, in some cases increasing to 15% if not paid by the respective maturity date ranging from March 26, 2020 to May 13, 2020. | ||||||||||||
Coverage rate description | Some of these loans provided for the issuance of warrants at 114% warrant coverage if the loan was not repaid within two months. | ||||||||||||
Number of warrants issued | 840,000 | ||||||||||||
Warrants exercise price, per share | $ 0.75 | ||||||||||||
Subsequent Event [Member] | Horne Management, LLC [Member] | |||||||||||||
Short-term notes | $ 1,635,000 | $ 1,635,000 | |||||||||||
Debt conversion of common stock shares | 4,368,278 | ||||||||||||
Warrant term | 10 years | 10 years | |||||||||||
Fair value of warrants | $ 3,000,000 | ||||||||||||
Debt conversion description | Horne Management, LLC agreed to convert the short-term notes, related parties totaling $1,635,000 as of March 31, 2020 plus accrued interest into (i) 4,368,278 shares of common stock of the Company and (ii) a ten-year warrant to purchase up to an equivalent number of shares of the Company's common stock with such conversion to be effective as of April 17, 2020. This warrant will have an exercise price equal to the price per share at which securities are offered to investors for purchase at the Qualified Financing, which such price has not yet been established, and is exercisable beginning on the day immediately following the earlier to occur of (x) the closing of the Qualified Financing and (y) November 1, 2020. If the Qualified Financing does not occur on or prior to October 31, 2020, the exercise price of the warrant will be equal to the price per share obtained by dividing $3,000,000 by the number of fully diluted shares of the Company outstanding on October 31, 2020. | ||||||||||||
Subsequent Event [Member] | William E. Horne [Member] | Horne Management, LLC [Member] | |||||||||||||
Debt interest rate | 12.00% | ||||||||||||
Debt conversion of common stock shares | 4,368,278 | ||||||||||||
Fair value of warrants | $ 3,000,000 | ||||||||||||
Debt conversion description | Horne Management, LLC agreed to convert the related notes plus accrued interest into (i) 4,368,278 shares of common stock of the Company and (ii) a ten-year warrant to purchase up to an equivalent number of shares of the Company's common stock with such conversion to be effective as of April 17, 2020. This warrant will have an exercise price equal to the price per share at which securities are offered to investors for purchase at the Qualified Financing, which such price has not yet been established, and is exercisable beginning on the day immediately following the earlier to occur of (x) the closing of the Qualified Financing and (y) November 1, 2020. If the Qualified Financing does not occur on or prior to October 31, 2020, the exercise price of the warrant will be equal to the price per share obtained by dividing $3,000,000 by the number of fully diluted shares of the Company outstanding on October 31, 2020. | ||||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | |||||||||||||
Proceeds from offering | $ 2,812,195 | ||||||||||||
Investor [Member] | Subsequent Event [Member] | |||||||||||||
Debt principal amount | $ 500,000 | ||||||||||||
Note [Member] | Investor [Member] | |||||||||||||
Debt principal amount | $ 500,000 | ||||||||||||
Note [Member] | Investor [Member] | Subsequent Event [Member] | |||||||||||||
Total amount in exchange for loans | 1,000,000 | ||||||||||||
A&R Note [Member] | Investor [Member] | Subsequent Event [Member] | |||||||||||||
Debt principal amount | $ 1,000,000 | ||||||||||||
Debt interest rate | 12.00% | ||||||||||||
April Secured Notes [Member] | |||||||||||||
Debt principal amount | $ 424,615 | $ 424,615 | |||||||||||
April Secured Notes [Member] | Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | |||||||||||||
Debt principal amount | $ 3,835,195 | $ 3,835,195 | |||||||||||
Debt interest rate | 12.00% | 12.00% | |||||||||||
Proceeds from offering | $ 2,835,195 | ||||||||||||
April Secured Notes [Member] | Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | Investor [Member] | |||||||||||||
Debt principal amount | $ 1,000,000 | $ 1,000,000 | |||||||||||
Demand Note [Member] | Subsequent Event [Member] | FWHC Bridge, LLC [Member] | |||||||||||||
Cash on hand | $ 3,117,000 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) | Jan. 08, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Percentage of voting interest acquired | 55.00% | |||
Shares issued during period, value | $ 4,217,946 | |||
Market capitalization | $ 10,811,908 | |||
Impairment charge | $ 2,944,000 | |||
Goodwill impairment charge | $ 12,564,000 | |||
Series C Preferred Stock [Member] | ||||
Number of additional exchange shares issued | 17,264 | |||
RMS [Member] | Series C Preferred Stock [Member] | ||||
Number of shares issued for acquisition | 33,661 | |||
Asset Purchase Agreement [Member] | ||||
Common stock, shares outstanding | 24,500,000 | |||
Market capitalization | $ 9,800,000 | |||
Fair value of net assets | $ 8,400,000 | |||
Asset Purchase Agreement [Member] | RMS [Member] | ||||
Number of shares issued for acquisition | 33,661 | |||
Number of additional shares issued | 6,111 | |||
Number of shares issued for acquisition, value | $ 2,000,000 | |||
Number of shares converted | 1,000 | |||
Percentage of voting interest acquired | 55.00% | |||
Shares issued during period, value | $ 5,650,000 | |||
Number of additional exchange shares issued | 17,264 | |||
Asset Purchase Agreement [Member] | RMS [Member] | Series C Preferred Stock [Member] | ||||
Number of shares issued for acquisition | 39,772 | |||
Number of additional shares issued | 11,153 | |||
Number of shares converted | 17,263,889 |
Business Acquisition - Schedule
Business Acquisition - Schedule of Fair Value of Consideration Transferred (Details) | Jan. 08, 2019USD ($)$ / sharesshares |
Business Combinations [Abstract] | |
Common shares issued and outstanding | shares | 24,717,270 |
Common shares reserved for issuance upon conversion of the outstanding Series B Preferred Stock | shares | 2,312,500 |
Total Common shares | shares | 27,029,770 |
Closing price per share of MedoveX Common stock on January 8, 2019 | $ / shares | $ 0.40 |
Value of common shares | $ 10,811,908 |
Fair value of outstanding warrants and options | 2,220,000 |
Cash consideration to RMS | (350,000) |
Total consideration | $ 12,681,908 |
Business Acquisition - Schedu_2
Business Acquisition - Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed (Details) | Jan. 08, 2019USD ($) |
Business Combinations [Abstract] | |
Cash | $ (302,710) |
Accounts receivable | 145,757 |
Inventory | 131,455 |
Prepaid expenses | 46,153 |
Property and equipment | 30,393 |
Other | 2,751 |
Intangibles | 3,680,000 |
Goodwill | 12,564,401 |
Total assets acquired | 16,298,200 |
Accounts payable and other accrued liabilities | 1,645,399 |
Derivative liability | 1,215,677 |
Interest-bearing liabilities and other | 755,216 |
Net assets acquired | $ 12,681,908 |
Business Acquisition - Schedu_3
Business Acquisition - Schedule of Interest Bearing and Other Liabilities Assumed (Details) | Jan. 08, 2019USD ($) |
Total interest-bearing and other liabilities | $ 755,216 |
Notes Payable [Member] | |
Total interest-bearing and other liabilities | 99,017 |
Short-term Convertible Notes Payable [Member] | |
Total interest-bearing and other liabilities | 598,119 |
Dividend Payable [Member] | |
Total interest-bearing and other liabilities | 57,813 |
Deferred Rent [Member] | |
Total interest-bearing and other liabilities | $ 267 |
Right-of-use Asset and Lease _3
Right-of-use Asset and Lease Liability (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 09, 2019 | |
Current lease liabilities | $ 402,876 | $ 453,734 | ||
Long-term lease liabilities | 221,710 | 302,175 | ||
ROU assets | 606,897 | $ 738,453 | ||
Operating lease expense | $ 150,564 | $ 136,943 | ||
Lease, description | Each location has its own expiration date ranging from April 30, 2020 to August 31, 2023. | |||
Accounting Standards Update (ASU) No. 2016-02 [Member] | ||||
Current lease liabilities | $ 475,000 | |||
Long-term lease liabilities | 713,000 | |||
ROU assets | $ 1,167,000 |
Right-of-use Asset and Lease _4
Right-of-use Asset and Lease Liability - Schedule of Components of Lease Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 150,564 | $ 136,943 |
Right-of-use Asset and Lease _5
Right-of-use Asset and Lease Liability - Schedule of Cash Paid for Amounts Included the Measurement of Lease Liabilities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 150,564 | $ 136,943 |
Right-of-use Asset and Lease _6
Right-of-use Asset and Lease Liability - Schedule of Supplemental Balance Sheet and Other Information (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating leases: Operating leases right-of-use assets | $ 606,897 | $ 738,453 |
Operating leases: Lease liability, current portion | 402,876 | 453,734 |
Operating leases: Lease liability, net of current portion | 221,710 | 302,175 |
Total operating lease liabilities | $ 624,586 | $ 755,909 |
Weighted average remaining lease term | 2 years 1 month 27 days | 2 years 2 months 30 days |
Weighted average discount rate | 7.75% | 7.75% |
Right-of-use Asset and Lease _7
Right-of-use Asset and Lease Liability - Schedule of Maturities of Lease Liabilities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating leases: Remainder of 2020 | $ 353,601 | |
Operating leases: 2021 | 154,559 | |
Operating leases: 2022 | 102,891 | |
Operating leases: 2023 | 69,333 | |
Operating leases: Total lease payments | 680,384 | |
Operating leases: Less interest | (55,798) | |
Total | $ 624,586 | $ 755,909 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 22,000 | $ 27,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property and equipment | $ 632,368 | $ 632,368 |
Less accumulated depreciation | (434,772) | (412,665) |
Property and Equipment, net | 197,596 | 219,703 |
Furniture and Fixtures [Member] | ||
Property and equipment | $ 231,222 | 231,222 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Useful Life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Useful Life | 7 years | |
Computers and Software [Member] | ||
Property and equipment | $ 244,039 | 244,039 |
Computers and Software [Member] | Minimum [Member] | ||
Useful Life | 3 years | |
Computers and Software [Member] | Maximum [Member] | ||
Useful Life | 7 years | |
Leasehold Improvements [Member] | ||
Useful Life | 15 years | |
Property and equipment | $ 157,107 | $ 157,107 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Details Narrative) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated amortization | $ 184,000 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Apr. 17, 2020 | Mar. 25, 2020 | Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 15, 2019 |
Michael Yurkowsky [Member] | ||||||
Officers compensation | $ 15,000 | $ 0 | ||||
Mr.Raymond Monteleone [Member] | ||||||
Officers compensation | 0 | 0 | ||||
Mr.Raymond Monteleone [Member] | ||||||
Compensation expenses | 30,000 | 35,000 | ||||
Bill Horne [Member] | Subsequent Event [Member] | ||||||
Salary reduction per month | $ 0 | |||||
Salary increase per month | 18,750 | |||||
Salary per annum | $ 225,000 | |||||
Oral Consulting Agreement [Member] | ||||||
Advisory service fee | $ 5,000 | |||||
Audit fees | $ 2,500 | |||||
Oral Consulting Agreement [Member] | Mr.Raymond Monteleone [Member] | ||||||
Advisory service fee | 10,000 | |||||
Audit fees | 5,000 | |||||
Oral Consulting Agreement [Member] | Jimmy St. Louis [Member] | St. Louis Family Office, LLC [Member] | ||||||
Advisory service fee | $ 10,000 | |||||
Audit fees | $ 27,000 | |||||
Consulting Agreement [Member] | Strategos Public Affairs, LLC [Member] | ||||||
Monthly fee | $ 7,500 | $ 4,500 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | Feb. 06, 2019 | Jan. 08, 2019 | Feb. 29, 2020 | Aug. 31, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Apr. 05, 2019 |
Common stock, par value | $ .001 | $ .001 | ||||||||
Additional paid-in capital | $ 28,117,978 | $ 28,172,146 | ||||||||
Accumulated deficit | (39,815,966) | (37,362,531) | ||||||||
Non-controlling interest | (370,132) | (370,132) | ||||||||
Debt instrument face amount | 424,615 | 424,615 | ||||||||
Shares issued price per share | $ 0.40 | $ 0.40 | ||||||||
Shares issued during period, value | $ 4,217,946 | |||||||||
Debt instrument converted shares | 250,000 | |||||||||
Number of shares issued for consulting fees | 130,085 | |||||||||
Number of shares issued for consulting fees, value | $ 52,033 | |||||||||
Value of shares issued for services | 35,000 | 52,034 | ||||||||
Management fee | 0 | |||||||||
LilyCon Investments, LLC [Member] | ||||||||||
Shares issued price per share | $ 0.32 | |||||||||
Number of shares issued for services | 109,375 | |||||||||
Value of shares issued for services | $ 35,000 | |||||||||
Minimum [Member] | ||||||||||
Shares issued during period, value | $ 5,650,000 | |||||||||
Convertible Note [Member] | ||||||||||
Debt instrument face amount | 750,000 | |||||||||
Fair value of notes payable | 598,000 | |||||||||
Consultants [Member] | ||||||||||
Shares issued price per share | $ 0.29 | |||||||||
Number of shares issued for services | 150,000 | |||||||||
Value of shares issued for services | $ 43,500 | |||||||||
CEO [Member] | Restricted Stock Award [Member] | ||||||||||
Compensation expense | $ 600 | $ 89,000 | ||||||||
Securities Purchase Agreement [Member] | Convertible Note [Member] | ||||||||||
Cancellation of debt | $ 100,000 | |||||||||
Debt instrument converted shares | 250,000 | |||||||||
Debt conversion price per share | $ 0.40 | |||||||||
Debt instrument converted value | $ 100,000 | |||||||||
Securities Purchase Agreement [Member] | Four Purchasers [Member] | ||||||||||
Debt instrument face amount | 2,000,000 | |||||||||
Proceeds from debt | 1,800,000 | |||||||||
Cancellation of debt | 200,000 | |||||||||
Securities Purchase Agreement [Member] | Four Purchasers [Member] | Convertible Note [Member] | ||||||||||
Debt instrument face amount | $ 50,000 | |||||||||
Shares issued price per share | $ 0.75 | |||||||||
Securities Purchase Agreement [Member] | Additional Purchasers [Member] | ||||||||||
Aggregate amount of capital raised | $ 7,000,000 | |||||||||
Employment Agreement [Member] | CEO [Member] | Stock Option [Member] | ||||||||||
Number of options to purchase shares of common stock | | 250,000 | |||||||||
Common Stock [Member] | ||||||||||
Number of shares converted | 17,263,889 | |||||||||
Shares issued during period, value | $ 17,000 | |||||||||
Number of shares issued for services | 109,375 | 130,085 | ||||||||
Value of shares issued for services | $ 109 | $ 130 | ||||||||
Potentially anti-dilutive, share | 425,000 | |||||||||
Warrants [Member] | ||||||||||
Potentially anti-dilutive, share | 45,319,643 | |||||||||
Warrants [Member] | Securities Purchase Agreement [Member] | ||||||||||
Debt conversion price per share | $ 0.40 | |||||||||
Warrants [Member] | Securities Purchase Agreement [Member] | 90% of the Conversion Price [Member] | ||||||||||
Debt conversion price per share | $ 0.36 | |||||||||
Series C Preferred Stock [Member] | ||||||||||
Number of additional exchange shares issued | 17,264 | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Number of shares converted | 715,279 | |||||||||
Number of common stock shares sold | 9,250 | |||||||||
Beneficial conversion feature | $ 33,000 | |||||||||
Preferred stock, par value | $ 0.001 | |||||||||
Series B Preferred Stock [Member] | Accrued Dividends [Member] | ||||||||||
Number of shares converted | 2,650 | |||||||||
Series B and Series Preferred Stock [Member] | ||||||||||
Potentially anti-dilutive, share | 38,308,600 | |||||||||
RMS [Member] | ||||||||||
Common stock, par value | $ 33,700 | |||||||||
Additional paid-in capital | $ 3,566,000 | |||||||||
Accumulated deficit | 9,296,000 | |||||||||
Non-controlling interest | $ 370,000 | |||||||||
RMS [Member] | Common Stock [Member] | ||||||||||
Number of shares converted | 33,661,000 | |||||||||
RMS [Member] | Series C Preferred Stock [Member] | ||||||||||
Number of shares issued for acquisition | 33,661 |
Equity Transactions - Summary o
Equity Transactions - Summary of Stock Option Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Number of Shares Options Outstanding Beginning Balance | 425,000 | |
Number of Shares Options, Assumed with the RMS merger transaction | 557,282 | |
Number of Options Granted | 250,000 | |
Number of Options Expired | (80,725) | |
Number of Shares Options Outstanding Ending Balance | 425,000 | 726,557 |
Number of Shares Options Outstanding and exercisable Ending Balance | 695,418 | |
Weighted Average Exercise Price Outstanding Beginning Balance | $ 1.38 | |
Weighted Average Exercise Price, Assumed with the RMS merger transaction | 2.78 | |
Weighted Average Exercise Price Granted | 0.40 | |
Weighted Average Exercise Price Expired | 1.52 | |
Weighted Average Exercise Price Outstanding and exercisable Ending Balance | $ 1.38 | $ 1.95 |
Weighted Average Remaining Term (years) Outstanding, Beginning | 7 years 8 months 16 days | 0 years |
Weighted Average Remaining Term (years) Assumed with the RMS merger transaction | 6 years 11 months 26 days | |
Weighted Average Remaining Term (years) Outstanding and exercisable Ending | 7 years 5 months 16 days | 7 years 8 months 26 days |
Commitments & Contingencies (De
Commitments & Contingencies (Details Narrative) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Guarantor obligations | $ 22,000 | $ 22,000 |
Short-Term Debt (Details Narrat
Short-Term Debt (Details Narrative) - USD ($) | Mar. 27, 2020 | Sep. 15, 2019 | Feb. 06, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Jan. 08, 2019 |
Common stock, par value | $ .001 | $ .001 | |||||
Number of shares issued on conversion | 250,000 | ||||||
Debt principal amount | $ 424,615 | $ 424,615 | |||||
Investor [Member] | |||||||
Notes payable | $ 500,000 | ||||||
Debt principal amount | $ 500,000 | ||||||
Debt instrument interest rate | 8.00% | ||||||
Debt instrument interest rate, terms | If any amounts payable under this Note are not paid within ten days after they are due, the interest rate shall accrue on the Principal in the amount of 18.0% per annum. | ||||||
Short-term Convertible Notes Payable [Member] | |||||||
Debt description | Eliminating $100,000 of the Company's debt obligation. | ||||||
Market value of common stock | $ 0.36 | $ 0.36 | |||||
Number of shares issued on conversion | 251,667 | 1,875,000 | |||||
Deemed dividend | $ 288,000 | ||||||
Proceeds from debt | $ 100,000 | ||||||
Debt conversion convertible outstanding | $ 750,000 | ||||||
Notes payable | 350,000 | ||||||
Short-term Convertible Notes Payable [Member] | Three of the Noteholders [Member] | |||||||
Accrued interest | 52,033 | ||||||
Third Noteholder [Member] | |||||||
Notes payable | $ 300,000 | ||||||
Debt, maturity date | Sep. 30, 2020 | ||||||
Fees and penalties | $ 85,000 | ||||||
Accrued interest | 40,000 | ||||||
Debt principal amount | $ 425,000 | 425,000 | |||||
One Year Extended Note [Member] | |||||||
Number of warrants issued | 424,000 | ||||||
Notes Payable [Member] | Merger [Member] | |||||||
Debt description | The Company finalized an eighteen-month extension to March 1, 2021. | ||||||
Debt, maturity date | Aug. 1, 2019 | ||||||
Monthly installment amount | $ 5,800 | ||||||
Debt instrument interest rate | 5.00% | ||||||
Promissory Notes [Member] | |||||||
Notes payable | $ 67,000 | $ 78,000 | |||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | |||||||
Number of common stock shares sold, value | $ 750,000 | ||||||
Sale of stock price per share | $ 50,000 | ||||||
Debt description | Each Unit consists of (i) a 12% senior secured convertible note, initially convertible into shares of the Company's common stock, par value $0.001 per share, at a conversion price equal to the lesser of $0.40 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of equity and/or debt securities completed by the Company following this offering, and (ii) a three-year warrant to purchase such number of shares of the Company's common stock equal to one hundred percent (100%) of the number of shares of common stock issuable upon conversion of the notes at $0.40. The Warrants were initially exercisable at a price equal to the lesser of $0.75 or ninety percent (90%) of the per share purchase price of any shares of common stock or common stock equivalents issued in future private placements of the debt and/or equity securities completed by the Company following the issuance of warrants. | ||||||
Conversion of common stock, percentage | 12.00% | ||||||
Common stock, par value | $ 0.001 | ||||||
Market value of common stock | $ 0.40 | ||||||
Warrant term | 3 years | ||||||
Warrants exercise price, per share | $ 0.75 |
Derivative Liability -Warrant_2
Derivative Liability -Warrants (Details Narrative) - USD ($) | Jan. 08, 2019 | May 31, 2018 | May 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | |
Warrant upper exercise price | $ 0.75 | |||||||
Warrant lower exercise price | $ 0.40 | |||||||
Additional warrant issued | $ 2,023,438 | |||||||
Fair value of the derivative liability | $ 141,000 | $ 316,000 | ||||||
Cumulative changes in fair value | $ 175,000 | 0 | ||||||
Warrant description | In conjunction with the Series D Preferred financing (See Note 14), the Company offered the Series B warrant holders the option to exchange their warrants on the basis of 1 warrant for 0.40 common shares. | |||||||
Fair value of warrants | $ 73,000 | |||||||
Change in fair value of redemption put liability | 193,659 | |||||||
Change in fair value of derivative liability - warrants | 174,978 | |||||||
Redemption put liability | [1] | $ 79,045 | $ 267,399 | |||||
Series B Warrants [Member] | ||||||||
Warrants to purchase common stock | 403,125 | |||||||
Fair value of the derivative liability | $ 1,200,000 | |||||||
Warrants | 1,007,813 | |||||||
Fair value of warrants | $ 75,000 | |||||||
Securities Purchase Agreement [Member] | ||||||||
Number of shares issued | 108,250 | |||||||
Securities Purchase Agreement [Member] | Series B Warrants [Member] | ||||||||
Warrants to purchase common stock | 2,312,500 | 2,312,500 | ||||||
Warrant term | 3 years | 3 years | ||||||
Warrant upper exercise price | $ 0.75 | |||||||
[1] | The Company did not have any assets or liabilities measured at fair value using Level 1 or 2 of the fair value hierarchy as of March 31, 2020 and December 31, 2019. |
Derivative Liability -Warrant_3
Derivative Liability -Warrants - Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative Liability - Warrants | [1] | $ 140,877 | $ 315,855 |
Derivative Put Liability | [1] | 79,045 | 267,399 |
Fair Value, Inputs, Level 3 [Member] | |||
Derivative Liability - Warrants | [1] | 140,877 | 315,855 |
Derivative Put Liability | [1] | $ 79,045 | $ 267,399 |
[1] | The Company did not have any assets or liabilities measured at fair value using Level 1 or 2 of the fair value hierarchy as of March 31, 2020 and December 31, 2019. |
Derivative Liability -Warrant_4
Derivative Liability -Warrants - Schedule of Fair Value, Liabilities Measured On Recurring Basis (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Derivative Liability- Warrants [Member] | |
Beginning balance, Derivative Liability- Warrants | $ 315,855 |
Fair value adjustments | (174,978) |
Ending balance, Derivative Liability- Warrants | 140,877 |
Redemption Put Liability [Member] | |
Beginning balance. Redemption Put Liability | 267,399 |
Issuance of Series D Convertible Preferred Stock | 5,305 |
Fair value adjustments | (193,659) |
Ending balance | $ 79,045 |
Derivative Liability -Warrant_5
Derivative Liability -Warrants - Schedule of Assumptions for Warrants (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020$ / shares | Dec. 31, 2019$ / shares | |
Derivative Liability- Warrants [Member] | Fair Value of Underlying Stock [Member] | ||
Derivative Liability, Measurement Input | 0.051 | 0.13 |
Derivative Liability- Warrants [Member] | Measurement Input, Exercise Price [Member] | ||
Derivative Liability, Measurement Input | 0.40 | 0.40 |
Derivative Liability- Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | ||
Derivative Liability, Measurement Input | 0.17 | 1.58 |
Derivative Liability- Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | ||
Derivative Liability, Measurement Input | 0.23 | 1.59 |
Derivative Liability- Warrants [Member] | Measurement Input, Expected Term [Member] | Minimum [Member] | ||
Derivative Liability, Measurement Input, term | 1 year 1 month 2 days | 1 year 4 months 2 days |
Derivative Liability- Warrants [Member] | Measurement Input, Expected Term [Member] | Maximum [Member] | ||
Derivative Liability, Measurement Input, term | 1 year 9 months 7 days | 2 years 7 days |
Derivative Liability- Warrants [Member] | Measurement Input, Stock Price Volatility [Member] | Minimum [Member] | ||
Derivative Liability, Measurement Input | 156 | 143 |
Derivative Liability- Warrants [Member] | Measurement Input, Stock Price Volatility [Member] | Maximum [Member] | ||
Derivative Liability, Measurement Input | 166 | 154 |
Derivative Liability- Warrants [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Derivative Liability, Measurement Input | 0 | 0 |
Redemption Put Liability [Member] | Fair Value of Underlying Stock [Member] | ||
Derivative Liability, Measurement Input | 0.019 | 0.056 |
Redemption Put Liability [Member] | Measurement Input, Exercise Price [Member] | ||
Derivative Liability, Measurement Input | 0.20409 | 0.20409 |
Redemption Put Liability [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Derivative Liability, Measurement Input | 0.70 | 1.92 |
Redemption Put Liability [Member] | Measurement Input, Expected Term [Member] | ||
Derivative Liability, Measurement Input, term | 9 years 8 months 12 days | 9 years 10 months 25 days |
Redemption Put Liability [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Derivative Liability, Measurement Input | 95 | 92 |
Redemption Put Liability [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Derivative Liability, Measurement Input | 0 | 0 |
Common Stock Warrants - Summary
Common Stock Warrants - Summary of Warrant Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Number of Shares, Warrants Outstanding Beginning | 44,806,076 | 12,108,743 |
Number of Shares, Warrants Issued | 513,567 | 17,500,000 |
Number of Shares, Warrants Outstanding and Exercisable Ending | 45,319,643 | 29,608,743 |
Weighted Average Exercise Price Outstanding | $ 0.78 | $ 1.38 |
Weighted Average Exercise Price Warrants Issued | 0.75 | 0.75 |
Weighted Average Exercise Price Outstanding and Exercisable | $ 0.78 | $ 1 |
Weighted Average Remaining Contractual Life Warrants Outstanding, Beginning | 4 years 7 months 2 days | 2 years 7 months 6 days |
Weighted Average Remaining Contractual Life Warrants Outstanding, Issued | 6 years 1 month 16 days | 2 years 10 months 3 days |
Weighted Average Remaining Contractual Life Warrants Outstanding and Exercisable | 4 years 7 months 10 days | 2 years 7 months 17 days |
Common Stock Warrants - Schedul
Common Stock Warrants - Schedule of Assumptions for Warrants (Details) | 3 Months Ended | |
Mar. 31, 2020$ / sharesshares | ||
Short-term Note Related Party 11/26/2019 [Member] | ||
Number of Warrants | shares | 400,000 | |
H-CYTE Stock Price | $ 0.20 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.13 | |
Life of Warrant | 3 years | |
Short-term Note Related Party 12/30/2019 [Member] | ||
Number of Warrants | shares | 171,429 | |
H-CYTE Stock Price | $ 0.14 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.08 | |
Life of Warrant | 3 years | |
Short-term Note Related Party 1/13/2020 [Member] | ||
Number of Warrants | shares | 268,571 | |
H-CYTE Stock Price | $ 0.12 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.07 | |
Life of Warrant | 3 years | |
Measurement Input, Risk Free Interest Rate [Member] | Short-term Note Related Party 11/26/2019 [Member] | ||
Warrant Input, Percentage | 1.58 | |
Measurement Input, Risk Free Interest Rate [Member] | Short-term Note Related Party 12/30/2019 [Member] | ||
Warrant Input, Percentage | 1.59 | |
Measurement Input, Risk Free Interest Rate [Member] | Short-term Note Related Party 1/13/2020 [Member] | ||
Warrant Input, Percentage | 1.60 | |
Measurement Input, Stock Price Volatility [Member] | Short-term Note Related Party 11/26/2019 [Member] | ||
Warrant Input, Percentage | 144.36 | |
Measurement Input, Stock Price Volatility [Member] | Short-term Note Related Party 12/30/2019 [Member] | ||
Warrant Input, Percentage | 145.29 | |
Measurement Input, Stock Price Volatility [Member] | Short-term Note Related Party 1/13/2020 [Member] | ||
Warrant Input, Percentage | 145.76 | |
Private Placement 1/08/2019 [Member] | ||
Number of Warrants | shares | 5,000,000 | |
H-CYTE Stock Price | $ 0.40 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.24 | |
Life of Warrant | 3 years | |
Private Placement 1/08/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.57 | |
Private Placement 1/08/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 115.08 | |
Antidilution Provision 1/08/2019 [Member] | ||
Number of Warrants | shares | 2,023,438 | [1] |
H-CYTE Stock Price | $ 0.40 | [1] |
Exercise Price of Warrant | 0.40 | [1] |
Warrant Grant Date Fair Value | $ 0.28 | [1] |
Life of Warrant | 3 years | [1] |
Antidilution Provision 1/08/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.57 | [1] |
Antidilution Provision 1/08/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 115.08 | [1] |
Private Placement 1/18/2019 [Member] | ||
Number of Warrants | shares | 6,000,000 | |
H-CYTE Stock Price | $ 0.40 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.23 | |
Life of Warrant | 3 years | |
Private Placement 1/18/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.60 | |
Private Placement 1/18/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 114.07 | |
Private Placement 1/25/2019 [Member] | ||
Number of Warrants | shares | 1,250,000 | |
H-CYTE Stock Price | $ 0.59 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.38 | |
Life of Warrant | 3 years | |
Private Placement 1/25/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.43 | |
Private Placement 1/25/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.72 | |
Private Placement 1/31/2019 [Member] | ||
Number of Warrants | shares | 437,500 | |
H-CYTE Stock Price | $ 0.54 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.34 | |
Life of Warrant | 3 years | |
Private Placement 1/31/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.43 | |
Private Placement 1/31/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.47 | |
Private Placement 2/7/2019 [Member] | ||
Number of Warrants | shares | 750,000 | |
H-CYTE Stock Price | $ 0.57 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.36 | |
Life of Warrant | 3 years | |
Private Placement 2/7/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.46 | |
Private Placement 2/7/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.23 | |
Private Placement 2/22/2019 [Member] | ||
Number of Warrants | shares | 375,000 | |
H-CYTE Stock Price | $ 0.49 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.30 | |
Life of Warrant | 3 years | |
Private Placement 2/22/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.46 | |
Private Placement 2/22/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.34 | |
Private Placement 3/1/2019 [Member] | ||
Number of Warrants | shares | 125,000 | |
H-CYTE Stock Price | $ 0.52 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.33 | |
Life of Warrant | 3 years | |
Private Placement 3/1/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.54 | |
Private Placement 3/1/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.42 | |
Private Placement 3/8/2019 [Member] | ||
Number of Warrants | shares | 150,000 | |
H-CYTE Stock Price | $ 0.59 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.38 | |
Life of Warrant | 3 years | |
Private Placement 3/8/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.43 | |
Private Placement 3/8/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.53 | |
Private Placement 3/11/2019 [Member] | ||
Number of Warrants | shares | 2,475,000 | |
H-CYTE Stock Price | $ 0.61 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.40 | |
Life of Warrant | 3 years | |
Private Placement 3/11/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.45 | |
Private Placement 3/11/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.62 | |
Private Placement 3/26/2019 [Member] | ||
Number of Warrants | shares | 500,000 | |
H-CYTE Stock Price | $ 0.51 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.32 | |
Life of Warrant | 3 years | |
Private Placement 3/26/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.18 | |
Private Placement 3/26/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 113.12 | |
Private Placement 3/28/2019 [Member] | ||
Number of Warrants | shares | 375,000 | |
H-CYTE Stock Price | $ 0.51 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.31 | |
Life of Warrant | 3 years | |
Private Placement 3/28/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.18 | |
Private Placement 3/28/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 112.79 | |
Private Placement 3/29/2019 [Member] | ||
Number of Warrants | shares | 62,500 | |
H-CYTE Stock Price | $ 0.51 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.31 | |
Life of Warrant | 3 years | |
Private Placement 3/29/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.21 | |
Private Placement 3/29/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 112.79 | |
Private Placement 4/4/2019 [Member] | ||
Number of Warrants | shares | 500,000 | |
H-CYTE Stock Price | $ 0.48 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.29 | |
Life of Warrant | 3 years | |
Private Placement 4/4/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 2.29 | |
Private Placement 4/4/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 112.77 | |
Private Placement 7/15/2019 [Member] | ||
Number of Warrants | shares | 200,000 | |
H-CYTE Stock Price | $ 0.53 | |
Exercise Price of Warrant | 1 | |
Warrant Grant Date Fair Value | $ 0.31 | |
Life of Warrant | 3 years | |
Private Placement 7/15/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 1.80 | |
Private Placement 7/15/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 115.50 | |
Convertible Debt Extension 9/18/2019 [Member] | ||
Number of Warrants | shares | 424,000 | |
H-CYTE Stock Price | $ 0.40 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.25 | |
Life of Warrant | 3 years | |
Convertible Debt Extension 9/18/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 1.72 | |
Convertible Debt Extension 9/18/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 122.04 | |
Private Placement of Series D Convertible Preferred Stock 11/15/2019 [Member] | ||
Number of Warrants | shares | 14,669,757 | |
H-CYTE Stock Price | $ 0.28 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.19 | |
Life of Warrant | 10 years | |
Private Placement of Series D Convertible Preferred Stock 11/15/2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Warrant Input, Percentage | 1.84 | |
Private Placement of Series D Convertible Preferred Stock 11/15/2019 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 89.75 | |
Private Placement of Series D Convertible Preferred Stock 1/17/2020 [Member] | ||
Number of Warrants | shares | 244,996 | |
H-CYTE Stock Price | $ 0.15 | |
Exercise Price of Warrant | 0.75 | |
Warrant Grant Date Fair Value | $ 0.13 | |
Life of Warrant | 10 years | |
Private Placement of Series D Convertible Preferred Stock 1/17/2020 [Member] | Measurement Input, Stock Price Volatility [Member] | ||
Warrant Input, Percentage | 144.32 | |
Private Placement of Series D Convertible Preferred Stock 1/17/2020 [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Warrant Input, Percentage | 1.84 | |
[1] | The Company had warrants that triggered the required issuance of an additional 2,023,438 warrants as a result of the Company's capital raise that gave those new investors a $0.40 per share investment price which required the old warrant holders to receive additional warrants since their price was $0.75 per share. |
Common Stock Warrants - Sched_2
Common Stock Warrants - Schedule of Assumptions for Warrants (Details) (Parenthetical) - Antidilution Provision 1/08/2019 [Member] | 3 Months Ended |
Mar. 31, 2020USD ($)$ / shares | |
Additional warrant | $ | $ 2,023,438 |
Investment price | $ 0.40 |
Warrants exercise price, per share | $ 0.75 |
Mezzanine Equity and Series D_3
Mezzanine Equity and Series D Convertible Preferred Stock (Details Narrative) - USD ($) | Jan. 17, 2020 | Nov. 21, 2019 | Nov. 15, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Share issued, price per share | $ 0.40 | ||||||
Proceeds from warrants | $ 2,565,638 | ||||||
Redemption put liability | [1] | 79,045 | $ 267,399 | ||||
Proceeds form shares | 4,217,946 | ||||||
Shares issued during period, value | $ 4,217,946 | ||||||
Series D Convertible Preferred Stock [Member] | |||||||
Deemed dividends | $ 158,147 | ||||||
Cumulative dividends, percentage | 8.00% | ||||||
Shares issued during period, value | $ 6,281,433 | ||||||
Securities Purchase Agreement [Member] | FWHC HOLDINGS, LLC [Member] | |||||||
Shares issued during period, new issues, shares | 146,998 | ||||||
Proceeds from warrants | $ 6,000,000 | ||||||
Convertible, beneficial conversion feature | $ 623,000 | ||||||
Redemption put liability | $ 79,000 | $ 267,000 | |||||
Securities Purchase Agreement [Member] | Series D Shares [Member] | FWHC HOLDINGS, LLC [Member] | |||||||
Preferred stock, par value, per share | $ 0.001 | ||||||
Securities Purchase Agreement [Member] | Series D Shares and Warrants [Member] | FWHC HOLDINGS, LLC [Member] | |||||||
Share issued, price per share | $ 0.001 | $ 0.28 | |||||
Convertible, beneficial conversion feature | $ 623,045 | ||||||
Debt conversion price per share | $ 0.24 | ||||||
Beneficial conversion feature, per share | $ 0.04 | ||||||
Preferred stock, discount on shares | $ 3,130,146 | ||||||
Redemption value of preferred stock | $ 100,000 | $ 6,000,000 | |||||
Purchase of shares | 2,450 | ||||||
Preferred stock redemption discount | $ 37,207 | ||||||
Proceeds form shares | $ 100,000 | ||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Series D Shares [Member] | |||||||
Share issued, price per share | $ 40.817 | ||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Series D Warrants [Member] | |||||||
Warrant term | 10 years | ||||||
Number of warrants to purchase common stock | 14,669,757 | ||||||
Warrants exercise price, per share | $ 0.75 | ||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Maximum [Member] | Series D Shares [Member] | |||||||
Shares issued during period, new issues, shares | 238,871 | ||||||
[1] | The Company did not have any assets or liabilities measured at fair value using Level 1 or 2 of the fair value hierarchy as of March 31, 2020 and December 31, 2019. |
Mezzanine Equity and Series D_4
Mezzanine Equity and Series D Convertible Preferred Stock - Schedule of Series D Convertible Preferred and Warrant Financing (Details) - USD ($) | Jan. 17, 2020 | Nov. 21, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Gross proceeds | $ 600,000 | |||
Financing costs paid in cash | (111,983) | |||
Proceeds from issuance of preferred stock and warrants, net of financing cost | (5,888,017) | |||
Proceeds allocation | $ 2,565,638 | |||
Financing costs (APIC) | $ 2,565,638 | |||
Investor Warrants [Member] | ||||
Proceeds from issuance of preferred stock and warrants, net of financing cost | (5,888,017) | |||
Proceeds allocation | (1,893,006) | |||
Financing costs (APIC) | 36,512 | |||
Redeemable Preferred Stock [Member] | ||||
Series D Convertible Preferred Stock | (2,869,854) | |||
Financing costs (APIC) | 1,106 | |||
Financing costs (Retained Earnings) | 66,265 | |||
Beneficial Conversion Feature | (623,045) | |||
Derivative Liability [Member] | ||||
Derivative Put Liability | (614,095) | |||
Deferred Financing costs | 8,100 | |||
Proceeds Allocation [Member] | ||||
Gross proceeds | $ 100,000 | 6,000,000 | ||
Financing costs paid in cash | ||||
Proceeds from issuance of preferred stock and warrants, net of financing cost | 100,000 | 6,000,000 | ||
Proceeds Allocation [Member] | Investor Warrants [Member] | ||||
Proceeds from issuance of preferred stock and warrants, net of financing cost | (100,000) | (6,000,000) | ||
Proceeds allocation | (31,902) | (1,893,006) | ||
Financing costs (APIC) | ||||
Proceeds Allocation [Member] | Redeemable Preferred Stock [Member] | ||||
Series D Convertible Preferred Stock | (62,793) | (2,869,854) | ||
Financing costs (APIC) | ||||
Financing costs (Retained Earnings) | ||||
Beneficial Conversion Feature | (623,045) | |||
Proceeds Allocation [Member] | Derivative Liability [Member] | ||||
Derivative Put Liability | $ (5,305) | (614,095) | ||
Deferred Financing costs | ||||
Financing Cost Allocation [Member] | ||||
Gross proceeds | ||||
Financing costs paid in cash | (111,983) | |||
Proceeds from issuance of preferred stock and warrants, net of financing cost | (111,983) | |||
Financing Cost Allocation [Member] | Investor Warrants [Member] | ||||
Proceeds from issuance of preferred stock and warrants, net of financing cost | 111,983 | |||
Proceeds allocation | ||||
Financing costs (APIC) | 36,512 | |||
Financing Cost Allocation [Member] | Redeemable Preferred Stock [Member] | ||||
Series D Convertible Preferred Stock | ||||
Financing costs (APIC) | 1,106 | |||
Financing costs (Retained Earnings) | 66,265 | |||
Beneficial Conversion Feature | ||||
Financing Cost Allocation [Member] | Derivative Liability [Member] | ||||
Derivative Put Liability | ||||
Deferred Financing costs | $ 8,100 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 29, 2020 | Apr. 17, 2020 | Apr. 17, 2020 | Feb. 28, 2019 | Mar. 31, 2020 | Apr. 09, 2020 | Mar. 27, 2020 | Dec. 31, 2019 |
Debt principal amount | $ 424,615 | $ 424,615 | ||||||
Short-term notes | 424,615 | 424,615 | ||||||
Debt conversion of common stock shares | 250,000 | |||||||
Fair value of warrants | 73,000 | |||||||
Investor [Member] | ||||||||
Debt principal amount | $ 500,000 | |||||||
Debt interest rate | 8.00% | |||||||
Promissory notes, value | $ 500,000 | |||||||
April Secured Notes [Member] | ||||||||
Debt principal amount | $ 424,615 | $ 424,615 | ||||||
Subsequent Event [Member] | Horne Management, LLC [Member] | ||||||||
Short-term notes | $ 1,635,000 | $ 1,635,000 | ||||||
Debt conversion of common stock shares | 4,368,278 | |||||||
Warrant term | 10 years | 10 years | ||||||
Fair value of warrants | $ 3,000,000 | |||||||
Debt conversion description | Horne Management, LLC agreed to convert the short-term notes, related parties totaling $1,635,000 as of March 31, 2020 plus accrued interest into (i) 4,368,278 shares of common stock of the Company and (ii) a ten-year warrant to purchase up to an equivalent number of shares of the Company's common stock with such conversion to be effective as of April 17, 2020. This warrant will have an exercise price equal to the price per share at which securities are offered to investors for purchase at the Qualified Financing, which such price has not yet been established, and is exercisable beginning on the day immediately following the earlier to occur of (x) the closing of the Qualified Financing and (y) November 1, 2020. If the Qualified Financing does not occur on or prior to October 31, 2020, the exercise price of the warrant will be equal to the price per share obtained by dividing $3,000,000 by the number of fully diluted shares of the Company outstanding on October 31, 2020. | |||||||
Subsequent Event [Member] | Investor [Member] | ||||||||
Debt principal amount | $ 500,000 | |||||||
Subsequent Event [Member] | A&R Note [Member] | Investor [Member] | ||||||||
Debt principal amount | $ 1,000,000 | |||||||
Debt interest rate | 12.00% | |||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | ||||||||
Proceeds from initial offering | $ 2,812,195 | |||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | April Secured Notes [Member] | ||||||||
Debt principal amount | $ 3,835,195 | $ 3,835,195 | ||||||
Debt interest rate | 12.00% | 12.00% | ||||||
Proceeds from initial offering | $ 2,835,195 | |||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | April Secured Notes [Member] | Investor [Member] | ||||||||
Debt principal amount | $ 1,000,000 | $ 1,000,000 | ||||||
Subsequent Event [Member] | Payroll Protection Program [Member] | ||||||||
Debt principal amount | $ 809,082 | |||||||
Debt interest rate | 1.00% | |||||||
Monthly payments | $ 45,533 | |||||||
Debt, maturity date | Nov. 29, 2020 | |||||||
Debt instrument, maturity date description | While the note is dated April 29, 2020, the loan was not formally approved and funded until May 7, 2020. | |||||||
Non-payroll costs percentage | 25.00% |