0001591165 false --12-31 Q3 P10Y P3Y P10Y 0001591165 2021-01-01 2021-09-30 0001591165 2021-11-09 0001591165 2021-09-30 0001591165 2020-12-31 0001591165 us-gaap:SeriesAPreferredStockMember 2021-09-30 0001591165 us-gaap:SeriesAPreferredStockMember 2020-12-31 0001591165 2021-07-01 2021-09-30 0001591165 2020-07-01 2020-09-30 0001591165 2020-01-01 2020-09-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-06-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2020-06-30 0001591165 us-gaap:CommonStockMember 2020-06-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001591165 us-gaap:RetainedEarningsMember 2020-06-30 0001591165 us-gaap:NoncontrollingInterestMember 2020-06-30 0001591165 2020-06-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-07-01 2020-09-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2020-07-01 2020-09-30 0001591165 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001591165 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001591165 us-gaap:NoncontrollingInterestMember 2020-07-01 2020-09-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-09-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2020-09-30 0001591165 us-gaap:CommonStockMember 2020-09-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001591165 us-gaap:RetainedEarningsMember 2020-09-30 0001591165 us-gaap:NoncontrollingInterestMember 2020-09-30 0001591165 2020-09-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2021-06-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2021-06-30 0001591165 us-gaap:CommonStockMember 2021-06-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001591165 us-gaap:RetainedEarningsMember 2021-06-30 0001591165 us-gaap:NoncontrollingInterestMember 2021-06-30 0001591165 2021-06-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2021-07-01 2021-09-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2021-07-01 2021-09-30 0001591165 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001591165 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001591165 us-gaap:NoncontrollingInterestMember 2021-07-01 2021-09-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2021-09-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2021-09-30 0001591165 us-gaap:CommonStockMember 2021-09-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001591165 us-gaap:RetainedEarningsMember 2021-09-30 0001591165 us-gaap:NoncontrollingInterestMember 2021-09-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2019-12-31 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2019-12-31 0001591165 us-gaap:CommonStockMember 2019-12-31 0001591165 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001591165 us-gaap:RetainedEarningsMember 2019-12-31 0001591165 us-gaap:NoncontrollingInterestMember 2019-12-31 0001591165 2019-12-31 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-01-01 2020-09-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2020-01-01 2020-09-30 0001591165 us-gaap:CommonStockMember 2020-01-01 2020-09-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-09-30 0001591165 us-gaap:RetainedEarningsMember 2020-01-01 2020-09-30 0001591165 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-09-30 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2020-12-31 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2020-12-31 0001591165 us-gaap:CommonStockMember 2020-12-31 0001591165 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001591165 us-gaap:RetainedEarningsMember 2020-12-31 0001591165 us-gaap:NoncontrollingInterestMember 2020-12-31 0001591165 us-gaap:SeriesAPreferredStockMember us-gaap:PreferredStockMember 2021-01-01 2021-09-30 0001591165 us-gaap:SeriesBPreferredStockMember us-gaap:PreferredStockMember 2021-01-01 2021-09-30 0001591165 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0001591165 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-09-30 0001591165 us-gaap:RetainedEarningsMember 2021-01-01 2021-09-30 0001591165 us-gaap:NoncontrollingInterestMember 2021-01-01 2021-09-30 0001591165 HCYT:FwhcLLCMember 2020-09-11 0001591165 HCYT:ProductSupplyAgreementMember HCYT:RionLLCMember 2021-01-01 2021-09-30 0001591165 HCYT:SecuredConvertibleNotePurchaseAgreementMember 2021-04-02 0001591165 HCYT:SecuredConvertibleNotePurchaseAgreementMember 2021-03-30 2021-04-02 0001591165 HCYT:SecuredConvertibleNotePurchaseAgreementMember HCYT:FWHCBridgeLLCMember us-gaap:InvestorMember 2021-03-30 2021-04-02 0001591165 us-gaap:InvestorMember HCYT:SecuredConvertibleNotePurchaseAgreementMember HCYT:FWHCMember 2021-03-30 2021-04-02 0001591165 HCYT:SecondClosingBringDownAgreementMember 2021-10-14 0001591165 HCYT:SecondClosingBringDownAgreementMember 2021-10-13 2021-10-14 0001591165 HCYT:SecondClosingBringDownAgreementMember HCYT:FWHCBridgeLLCMember us-gaap:InvestorMember 2021-10-13 2021-10-14 0001591165 us-gaap:SubsequentEventMember 2021-11-11 0001591165 HCYT:TampaFloridaMember 2021-03-30 2021-04-02 0001591165 HCYT:TampaFloridaMember 2021-08-02 0001591165 us-gaap:SubsequentEventMember HCYT:NashvilleTennesseeMember 2021-11-02 0001591165 srt:MinimumMember us-gaap:FurnitureAndFixturesMember 2021-01-01 2021-09-30 0001591165 srt:MaximumMember us-gaap:FurnitureAndFixturesMember 2021-01-01 2021-09-30 0001591165 us-gaap:FurnitureAndFixturesMember 2021-09-30 0001591165 us-gaap:FurnitureAndFixturesMember 2020-12-31 0001591165 srt:MinimumMember HCYT:ComputersAndSoftwareMember 2021-01-01 2021-09-30 0001591165 srt:MaximumMember HCYT:ComputersAndSoftwareMember 2021-01-01 2021-09-30 0001591165 HCYT:ComputersAndSoftwareMember 2021-09-30 0001591165 HCYT:ComputersAndSoftwareMember 2020-12-31 0001591165 us-gaap:LeaseholdImprovementsMember 2021-01-01 2021-09-30 0001591165 us-gaap:LeaseholdImprovementsMember 2021-09-30 0001591165 us-gaap:LeaseholdImprovementsMember 2020-12-31 0001591165 HCYT:OralConsultingAgreementMember HCYT:MrRaymondMonteleoneMember 2019-01-30 2019-02-01 0001591165 HCYT:OralConsultingAgreementMember HCYT:MrRaymondMonteleoneMember 2019-01-30 2019-02-01 0001591165 HCYT:OralConsultingAgreementMember 2020-03-24 2020-03-25 0001591165 srt:BoardOfDirectorsChairmanMember 2021-01-12 0001591165 srt:BoardOfDirectorsChairmanMember 2021-09-30 0001591165 HCYT:MrRaymondMonteleoneMember 2021-07-01 2021-09-30 0001591165 HCYT:MrRaymondMonteleoneMember 2021-01-01 2021-09-30 0001591165 HCYT:MrRaymondMonteleoneMember 2020-07-01 2020-09-30 0001591165 HCYT:MrRaymondMonteleoneMember 2020-01-01 2020-09-30 0001591165 HCYT:MichaelYurkowskyMember HCYT:OralConsultingAgreementMember 2020-09-29 2020-10-02 0001591165 HCYT:OralConsultingAgreementMember HCYT:MichaelYurkowskyMember 2021-07-01 2021-09-30 0001591165 HCYT:OralConsultingAgreementMember HCYT:MichaelYurkowskyMember 2021-01-01 2021-09-30 0001591165 HCYT:OralConsultingAgreementMember HCYT:MichaelYurkowskyMember 2020-07-01 2020-09-30 0001591165 HCYT:MichaelYurkowskyMember HCYT:OralConsultingAgreementMember 2021-01-11 2021-01-12 0001591165 HCYT:OralConsultingAgreementMember HCYT:MrWilliamHorneMember 2021-07-01 2021-09-30 0001591165 HCYT:OralConsultingAgreementMember HCYT:MrWilliamHorneMember 2021-01-01 2021-09-30 0001591165 HCYT:OralConsultingAgreementMember HCYT:MrWilliamHorneMember 2020-07-01 2020-09-30 0001591165 HCYT:FWHCHoldingsLLCMember 2020-09-10 2020-09-11 0001591165 HCYT:FWHCHoldingsLLCMember HCYT:SeriesDConvertiblePreferredStockMember 2020-07-27 2020-07-28 0001591165 HCYT:SerieAPreferredStockMember HCYT:PromissoryNoteFromAprilTwoThousandAndTwentyMember 2020-09-10 2020-09-11 0001591165 HCYT:SerieAPreferredStockMember HCYT:AprilSecuredNoteMember 2020-09-10 2020-09-11 0001591165 HCYT:SerieAPreferredStockMember HCYT:HawesNotesMember 2020-09-10 2020-09-11 0001591165 HCYT:SerieAPreferredStockMember 2020-09-10 2020-09-11 0001591165 HCYT:FWHCHoldingsLLCMember 2020-09-11 0001591165 HCYT:SecondClosingBringDownAgreementMember HCYT:FWHCMember us-gaap:InvestorMember 2021-10-13 2021-10-14 0001591165 HCYT:LilyConInvestmentsLLCMember 2020-02-01 2020-02-29 0001591165 HCYT:LilyConInvestmentsLLCMember 2020-02-29 0001591165 HCYT:HomeManagementLLCMember 2020-04-22 2020-04-23 0001591165 HCYT:HomeManagementLLCMember 2020-04-23 0001591165 HCYT:SeriesBAndSeriesDPreferredStockMember 2020-07-27 2020-07-28 0001591165 2020-07-29 0001591165 us-gaap:SeriesAPreferredStockMember 2020-07-29 0001591165 us-gaap:SeriesAPreferredStockMember 2020-09-23 2020-09-24 0001591165 us-gaap:SeriesAPreferredStockMember 2020-09-24 0001591165 us-gaap:SeriesAPreferredStockMember HCYT:PurchasersMember 2020-09-23 2020-09-24 0001591165 us-gaap:SeriesAPreferredStockMember HCYT:OutstandingPromissoryNoteMember 2020-09-23 2020-09-24 0001591165 us-gaap:SeriesAPreferredStockMember HCYT:OutstandingPromissoryNoteMember 2020-09-24 0001591165 us-gaap:SeriesAPreferredStockMember 2021-07-01 2021-09-30 0001591165 us-gaap:SeriesAPreferredStockMember 2021-01-01 2021-09-30 0001591165 HCYT:SecuredConvertibleNotePurchaseAgreementMember HCYT:DirectorsAndOfficersMember 2021-03-30 2021-04-02 0001591165 HCYT:SecuredConvertibleNotePurchaseAgreementMember HCYT:DirectorsAndOfficersMember HCYT:ImmediatelyVestedMember 2021-03-30 2021-04-02 0001591165 srt:ChiefExecutiveOfficerMember 2021-01-01 2021-09-30 0001591165 us-gaap:StockCompensationPlanMember 2021-09-30 0001591165 us-gaap:StockCompensationPlanMember 2021-01-01 2021-09-30 0001591165 us-gaap:StockCompensationPlanMember 2021-07-01 2021-09-30 0001591165 srt:MinimumMember HCYT:TwoThousandTwentyOneGrantsMember 2021-09-30 0001591165 srt:MaximumMember HCYT:TwoThousandTwentyOneGrantsMember 2021-09-30 0001591165 srt:MinimumMember HCYT:TwoThousandTwentyOneGrantsMember 2021-01-01 2021-09-30 0001591165 srt:MaximumMember HCYT:TwoThousandTwentyOneGrantsMember 2021-01-01 2021-09-30 0001591165 2019-01-01 2019-12-31 0001591165 2020-01-01 2020-12-31 0001591165 HCYT:WarrantstoPurchaseCommonStockMember 2021-01-01 2021-09-30 0001591165 HCYT:WarrantstoPurchaseCommonStockMember 2020-01-01 2020-09-30 0001591165 HCYT:SeriesAPreferredStockConvertibleToCommonStockMember 2021-01-01 2021-09-30 0001591165 HCYT:SeriesAPreferredStockConvertibleToCommonStockMember 2020-01-01 2020-09-30 0001591165 HCYT:WarrantsMember 2021-01-01 2021-09-30 0001591165 HCYT:StockOptionsMember 2021-01-01 2021-09-30 0001591165 srt:MinimumMember 2021-09-30 0001591165 HCYT:RionAgreementMember HCYT:RionLLCMember 2021-01-01 2021-09-30 0001591165 HCYT:RionAgreementMember HCYT:RionLLCMember 2020-07-01 2020-09-30 0001591165 HCYT:RionAgreementMember HCYT:RionLLCMember 2020-01-01 2020-09-30 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:AccreditedInvestorsMember 2021-01-01 2021-09-30 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:AccreditedInvestorsMember 2021-09-30 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:AccreditedInvestorsMember 2019-01-01 2019-12-31 0001591165 HCYT:ThirdNoteholderMember 2020-03-31 0001591165 HCYT:ConvertibleNotesPayableRelatedPartiesMember 2021-07-01 2021-09-30 0001591165 us-gaap:ConvertibleNotesPayableMember 2021-07-01 2021-09-30 0001591165 HCYT:ConvertibleNotesPayableRelatedPartiesMember 2021-01-01 2021-09-30 0001591165 us-gaap:ConvertibleNotesPayableMember 2021-01-01 2021-09-30 0001591165 HCYT:NotesPayableMember HCYT:MergerMember 2021-01-01 2021-09-30 0001591165 HCYT:NotesPayableMember HCYT:MergerMember 2021-09-30 0001591165 HCYT:PromissoryNotesMember 2020-12-31 0001591165 us-gaap:InvestorMember 2020-03-27 0001591165 us-gaap:InvestorMember 2020-04-09 0001591165 us-gaap:InvestorMember HCYT:NewPrincipalAmountMember 2020-04-09 0001591165 HCYT:PayrollProtectionProgramMember 2020-04-29 0001591165 HCYT:PayrollProtectionProgramMember 2021-08-17 0001591165 HCYT:PayrollProtectionProgramMember 2021-08-15 2021-08-17 0001591165 HCYT:PayrollProtectionProgramMember 2021-01-01 2021-09-30 0001591165 HCYT:DerivativeLiabilityWarrantsMember 2019-12-31 0001591165 HCYT:DerivativeLiabilityWarrantsMember 2020-01-01 2020-09-30 0001591165 HCYT:DerivativeLiabilityWarrantsMember 2020-09-30 0001591165 HCYT:RedemptionPutLiabilityMember 2019-12-31 0001591165 HCYT:RedemptionPutLiabilityMember 2020-01-01 2020-09-30 0001591165 HCYT:RedemptionPutLiabilityMember 2020-09-30 0001591165 HCYT:SeriesBWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember 2021-09-30 0001591165 HCYT:SeriesBWarrantsMember 2021-09-30 0001591165 HCYT:SeriesBWarrantsMember 2020-09-11 0001591165 HCYT:SeriesBWarrantsMember us-gaap:MeasurementInputPriceVolatilityMember srt:MaximumMember 2020-09-11 0001591165 HCYT:SeriesBWarrantsMember us-gaap:MeasurementInputRiskFreeInterestRateMember srt:MaximumMember 2020-09-11 0001591165 HCYT:SeriesBWarrantsMember 2020-09-10 2020-09-11 0001591165 HCYT:SeriesDWarrantsMember 2021-09-30 0001591165 HCYT:SeriesDWarrantsMember HCYT:FairValueBeforeAndAfterModificationsMember 2021-09-30 0001591165 HCYT:SeriesDWarrantsMember 2020-09-11 0001591165 HCYT:SeriesDWarrantsMember us-gaap:MeasurementInputPriceVolatilityMember srt:MaximumMember 2020-09-11 0001591165 HCYT:SeriesDWarrantsMember us-gaap:MeasurementInputRiskFreeInterestRateMember srt:MaximumMember 2020-09-11 0001591165 HCYT:SeriesDWarrantsMember 2020-09-10 2020-09-11 0001591165 HCYT:HomeManagementLLCMember us-gaap:MeasurementInputExercisePriceMember 2020-04-23 0001591165 HCYT:HomeManagementLLCMember us-gaap:MeasurementInputPriceVolatilityMember 2020-04-23 0001591165 HCYT:HomeManagementLLCMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2020-04-23 0001591165 HCYT:SeriesDWarrantsMember HCYT:HomeManagementLLCMember 2020-04-23 0001591165 HCYT:HomeManagementLLCMember HCYT:SeriesDWarrantsMember us-gaap:MeasurementInputExercisePriceMember 2020-09-11 0001591165 HCYT:HomeManagementLLCMember us-gaap:MeasurementInputPriceVolatilityMember 2020-09-11 0001591165 HCYT:HomeManagementLLCMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2020-09-11 0001591165 HCYT:SeriesDWarrantsMember HCYT:HomeManagementLLCMember 2020-09-10 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember 2021-01-01 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember us-gaap:MeasurementInputExercisePriceMember 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember HCYT:ExerciseOfPurchaserWarrantsMember 2021-01-01 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember HCYT:ConvertedAdvanceWarrantsMember 2021-01-01 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember HCYT:MeasurementInputTradingMarketPriceMember 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember us-gaap:MeasurementInputExercisePriceMember 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember us-gaap:MeasurementInputPriceVolatilityMember 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember 2021-01-01 2021-09-30 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember HCYT:ExerciseOfPurchaserWarrantsMember 2020-09-10 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember HCYT:ConvertedAdvanceWarrantsMember 2020-09-10 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember us-gaap:MeasurementInputPriceVolatilityMember HCYT:AprilTwoThousandTwentyOfferingMember 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember HCYT:AprilTwoThousandTwentyOfferingMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2020-09-11 0001591165 HCYT:AprilBridgeLoansAndConvertedAdvanceWarrantsMember 2020-09-10 2020-09-11 0001591165 us-gaap:OtherOperatingIncomeExpenseMember 2021-07-01 2021-09-30 0001591165 us-gaap:OtherOperatingIncomeExpenseMember 2021-01-01 2021-09-30 0001591165 HCYT:SeriesBWarrantsMember 2021-01-01 2021-09-30 0001591165 us-gaap:OtherOperatingIncomeExpenseMember HCYT:RedemptionPutLiabilityMember 2020-07-01 2020-09-30 0001591165 us-gaap:OtherOperatingIncomeExpenseMember HCYT:RedemptionPutLiabilityMember 2020-01-01 2020-09-30 0001591165 HCYT:SecuritiesPurchaseAgreementMember 2021-09-30 0001591165 HCYT:SecuritiesPurchaseAgreementMember 2019-12-31 0001591165 HCYT:ShorttermNoteRelatedPartyTwoMember 2021-09-30 0001591165 HCYT:ShorttermNoteRelatedPartyTwoMember 2021-01-01 2021-09-30 0001591165 HCYT:ShorttermNoteRelatedPartyTwoMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-09-30 0001591165 HCYT:ShorttermNoteRelatedPartyTwoMember us-gaap:MeasurementInputPriceVolatilityMember 2021-09-30 0001591165 HCYT:PrivatePlacementOfSeriesDConvertiblePreferredStockOneMember 2021-09-30 0001591165 HCYT:PrivatePlacementOfSeriesDConvertiblePreferredStockOneMember 2021-01-01 2021-09-30 0001591165 HCYT:PrivatePlacementOfSeriesDConvertiblePreferredStockOneMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-09-30 0001591165 HCYT:PrivatePlacementOfSeriesDConvertiblePreferredStockOneMember us-gaap:MeasurementInputPriceVolatilityMember 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingMember 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingMember 2021-01-01 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingMember us-gaap:MeasurementInputPriceVolatilityMember 2021-09-30 0001591165 HCYT:ShortTermNoteRelatedPartyConversionMember 2021-09-30 0001591165 HCYT:ShortTermNoteRelatedPartyConversionMember 2021-01-01 2021-09-30 0001591165 us-gaap:MeasurementInputRiskFreeInterestRateMember HCYT:ShortTermNoteRelatedPartyConversionMember 2021-09-30 0001591165 us-gaap:MeasurementInputPriceVolatilityMember HCYT:ShortTermNoteRelatedPartyConversionMember 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingOneMember 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingOneMember 2021-01-01 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingOneMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2021-09-30 0001591165 HCYT:GrantedForBridgeFinancingOneMember us-gaap:MeasurementInputPriceVolatilityMember 2021-09-30 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:AccreditedInvestorsMember srt:MaximumMember HCYT:SeriesDConvertiblePreferredStockMember 2019-11-10 2019-11-15 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:AccreditedInvestorsMember HCYT:SeriesDConvertiblePreferredStockMember 2019-11-15 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:AccrediteInvestorsMember HCYT:SeriesDConvertiblePreferredStockMember 2019-11-15 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:FWHCHoldingsLLCMember 2019-11-20 2019-11-21 0001591165 HCYT:SecuritiesPurchaseAgreementMember HCYT:FWHCHoldingsLLCMember 2019-11-21 0001591165 HCYT:SeriesDConvertiblePreferredStockMember 2021-01-01 2021-09-30 0001591165 HCYT:SeriesDConvertiblePreferredStockMember 2020-01-01 2020-09-30 0001591165 HCYT:SeriesDConvertiblePreferredStockMember 2020-07-26 2020-07-28 0001591165 us-gaap:SubsequentEventMember 2021-10-14 0001591165 us-gaap:SubsequentEventMember 2021-10-12 2021-10-14 0001591165 us-gaap:SubsequentEventMember HCYT:OctoberTwoThousandAndTwentyOnePurchaseAgreementMember HCYT:FWHCBridgeLLCMember 2021-10-14 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2021

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ____________

 

Commission file number: 001-36763

 

H-CYTE, INC

(Exact name of registrant as specified in its charter)

 

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

 

201 East Kennedy Blvd, Suite 425    
Tampa, Florida   33602
(Address of principal executive offices)   (Zip Code)

 

(844) 633-6839

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

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

 

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

 

Yes ☐ No

 

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

 

Yes ☐ No

 

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

 

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

 

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

 

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

 

☐ Yes ☒ No

 

As of November 9, 2021, 163,381,339 shares of the registrant’s common stock were outstanding.

 

 

 

 

 

 

H-CYTE, INC AND SUBSIDIARIES

 

TABLE OF CONTENTS

 

    Page
PART I – FINANCIAL INFORMATION  
     
  Special Note Regarding Forward-looking Statements 3
Item 1. Financial Statements 4
  Consolidated Balance Sheets 4
  Consolidated Statements of Operations 5
  Consolidated Statements of Stockholders’ Deficit 6
  Consolidated Statements of Cash Flows 8
  Notes to Consolidated Financial Statements 9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22
Item 3. Quantitative and Qualitative Disclosures About Market Risks 28
Item 4. Controls and Procedures 28
     
PART II – OTHER INFORMATION  
     
Item 1. Legal Proceedings 29
Item 1A. Risk Factors 29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29
Item 3. Defaults Upon Senior Securities 29
Item 4. Mine Safety Disclosures 29
Item 5. Other Information 29
Item 6. Exhibits 29
     
SIGNATURES 30

 

2

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

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

 

  the Company’s ability to market, commercialize, and achieve broader market acceptance for its products;
     
  the Company’s ability to successfully expand and achieve full productivity from its sales, clinical support, and marketing capabilities;
     
  the Company’s ability to successfully complete the development of, and obtain regulatory clearance or approval for its products; and
     
  the estimates regarding the sufficiency of the Company’s cash resources, the ability to obtain additional capital, or the ability to maintain or grow sources of revenue.

 

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

 

3

 

 

Item 1. Financial Statements

 

H-Cyte, Inc and Subsidiaries

Consolidated Balance Sheets

 

       
   (Unaudited)   
   Sept 30, 2021  December 31, 2020
Assets          
           
Current Assets          
Cash  $307,213   $1,640,645 
Accounts receivable   9,200    - 
Patient financing receivable, current portion   35,080    - 
Other receivables   551    22,123 
Prepaid expenses   106,228    94,434 
Total Current Assets   458,272    1,757,202 
           
Right-of-use asset   162,207    278,552 
Property and equipment, net   40,344    139,175 
Patient financing receivable, net of current portion   61,547    - 
Other assets   18,412    29,239 
Total assets  $740,782   $2,204,168 
           
Liabilities and Stockholders’ Deficit          
           
Current Liabilities          
Accounts payable  $1,044,727   $1,006,968 
Accrued liabilities   

187,119

    276,415 
Other current liabilities   

141,330

    154,812 
Notes payable, current portion   67,444    67,444 
Convertible notes payable, related parties   1,584,665    - 
Convertible notes payable   1,091,080    - 
PPP Loan, current portion   105,878    606,811 
Deferred revenue   410,031    634,149 
Lease liability, current portion   92,589    139,189 
Interest payable   

4,385

    6,898 
Total Current Liabilities   4,729,248    2,892,686 
           
Long-term Liabilities          
Lease liability, net of current portion   87,304    157,050 
PPP Loan, net of current portion   -    202,271 
Total Long-term Liabilities   87,304    359,321 
           
Total Liabilities   4,816,552    3,252,007 
           
Stockholders’ Equity (Deficit)          
Preferred Stock - $.001 par value: 1,000,000,000 shares authorized; Series A Preferred Stock - $.001 par value: 800,000,000 shares authorized, 515,874,354 and 538,109,409 shares issued and outstanding at September 30, 2021 and, December 31, 2020, respectively   515,874    538,109 
Common stock - $.001 par value: 1,600,000,000 shares authorized, 149,394,519 and 127,159,464 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively   149,394    127,159 
Additional paid-in capital   43,540,358    42,515,999 
Accumulated deficit   (47,911,264)   (43,858,974)
Non-controlling interest   (370,132)   (370,132)
Total Stockholders’ Deficit   (4,075,770)   (1,047,839)
           
Total Liabilities and Stockholders’ Deficit  $740,782   $2,204,168 

 

See accompanying notes to the consolidated financial statements

 

4

 

 

H-Cyte, Inc and Subsidiaries

Consolidated Statements of Operations

 

             
   Three Months Ended Sept 30,  Nine Months Ended Sept 30,
   2021  2020  2021  2020
             
Revenues  $460,216   $649,892   $1,286,841   $1,686,168 
Cost of Sales   (138,786)   (161,252)   (553,454)   (608,079)
Gross Profit   321,430    488,640   733,387    1,078,089 
                     
Operating Expenses                    
Salaries and related costs   534,752    606,294    1,782,646    2,425,094 
Share based compensation   

162,359

    -    1,024,359    643 
Loss on disposal of property and equipment       

-

    92,804    - 
Other general and administrative   789,365    542,317    2,229,120    2,806,707 
Research and development   3,285    201,658    3,285    1,151,658 
Advertising   58,643    51,643    223,871    222,196 
Depreciation and amortization   300    30,095    13,859    69,447 
Total Operating Expenses   1,548,704    1,432,007    5,369,944    6,675,745 
                     
Operating Loss   (1,227,274)   (943,367)   (4,636,557)   (5,597,656)
                     
Other Income (Expense)                    
Forgiveness of PPP loan   698,820    -    698,820    - 
Gain on extinguishment of debt   -    -    -    1,300,088 
Interest expense   (50,516)   (1,039,349)   (110,446)   (1,458,521)
Other income (expense)   (7,641)   (34,504)    (4,107)   (25,182)
Change in fair value of redemption put liability   -    97,997   -    272,705 
Loss on derivative instrument   -    -   -    (2,306,121)
Warrant modification expense   

-

    -   -    (70,851)
Change in fair value of derivative liability - warrants   

-

    5,869,102   -    2,986,853
Total Other Income (Expense)   

640,663

    4,893,246   

584,267

    698,971
                     
Net Income (Loss)  $(586,611)  $3,949,879   $(4,052,290)  $(4,898,685)
                     
Accrued dividends on outstanding Series B Convertible Preferred Stock   -    7,856    -    44,456 
Deemed dividend on Series D Convertible Preferred Stock   -    36,450    -    277,719 
Net Income (Loss) attributable to common stockholders  $(586,611)  $3,905,573  $(4,052,290)  $(5,220,860)
                 
Net Income (Loss) per share                    
Basic  $(0.00)  $0.03   $(0.03)  $(0.05)
Diluted  (0.00  $0.01   $(0.03)  $(0.05)
                     
Weighted average outstanding shares - basic   

142,407,798

    116,970,322    140,074,271    106,691,185 
Weighted average outstanding shares - diluted   142,407,798     664,244,972    140,074,271    106,691,185 

 

See accompanying notes to the consolidated financial statements

 

5

 

 

H-Cyte, Inc and Subsidiaries

Consolidated Statements of Stockholders’ Deficit

For the three and nine months ended September 30, 2020 and 2021

 

                                         
Three months ended  Preferred Series A Stock   Preferred Series B Stock   Common Stock   Additional
Paid-in
   Accumulated   Non-controlling   Total
Stockholders’
 
September 30, 2020 and 2021  Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Interest  

Deficit

 
Balances - June 30, 2020                                                -   $-    6,100   $6    104,246,357   $104,246   $27,761,076   $(46,248,302)  $(370,132)  $      (18,753,106)
 Conversion of Series A Preferred Stock to common stock, shares                                                   
Conversion of Series B Preferred Stock to Common Stock   -    -     (6,100)   (6)   2,119,713    2,120    150,983    -    -    153,097 
Accrued dividends on Series B Preferred Stock   -    -    -    -    -    -    (7,856)   -    -    (7,856)
Deemed dividend on Series D Preferred Stock   -    -    -    -    -    -    (36,450)   -    -    (36,450)
Conversion of Short-term convertible notes to Preferred Stock   287,984,337    287,984    -    -    -    -    4,751,484    -    -    5,039,468 
Conversion of related party warrants to equity   -    -    -    -    -    -    107,123    -    -    107,123 
Conversion of Series D Preferred Stock to Common Stock   -    -    -    -    15,773,363    15,773    6,422,441    -    -    6,438,214 
Reclassification of Series B warrants to Common Stock   -    -    -    -    -    -    73,805    -    -    73,805 
Reclassification of Series D warrants to Common Stock   -    -    -    -    -    -    337,400    -    -    337,400 
Issuance of Series A Preferred Stock in Rights Offering   218,285,024    218,285    -    -    -    -    2,517,451    -    -    2,735,736 
Conversion of Short-term related party convertible notes to Preferred Stock   35,860,079    35,860    -    -    -    -    412,541    -    -    448,401 
Net loss   -    -    -    -    -    -    -    3,949,879    -    3,949,879 
Balances – September 30, 2020   542,129,440   $542,129    -   $-    122,139,433   $122,139   $42,489,998   $(42,298,423)  $(370,132)  $485,711 

 

    Preferred Series A Stock     Preferred Series B Stock     Common Stock     Additional
Paid-in
    Accumulated      Non-controlling     Total Stockholders’  
    Shares     Amount     Shares     Amount     Shares     Amount     Capital     Deficit     Interest     Deficit  
Balances - June 30, 2021     520,305,884     $ 520,305           -       -       144,962,989     $ 144,963     $ 43,377,999     $ (47,324,653 )   $ (370,132 )   $ (3,651,518 )
Share based compensation     -       -       -       -       -       -       162,359       -       -       162,359  
Conversion of Series A Preferred Stock to common stock     (4,431,530 )     (4,431 )     -       -       4,431,530       4,431       -       -       -       -  
Net Loss     -       -       -       -       -       -       -       (586,611 )     -       (586,611 )
Balances – September 30, 2021     515,874,354     $ 515,874       -       -       149,394,519     $ 149,394     $ 43,540,358     $ (47,911,264)   $ (370,132 )  $ (4,075,770)

 

6

 

 

Nine months ended  Preferred Series A Stock   Preferred Series B Stock   Common Stock   Additional Paid-in   Accumulated   Non-controlling   Total Stockholders’ 
September 30, 2020 and 2021  Shares   Amount   Shares   Amount   Shares   Amount  
Capital
   Deficit   Interest   Deficit 
Balances - December 31, 2019                                              -   $-    6,100   $6    99,768,704   $99,769   $28,172,145   $(37,362,531)  $(370,132)  $(9,460,743)
Accrued dividends on Series B Preferred Stock   -    -    -    -    -    -    (44,456)   -    -    (44,456)
Adjustment of exercise price on certain warrants   -    -    -    -    -    -    (438,913)   -    -    (438,913)
Reclassification of Series B warrants to equity   -    -    -    -    -    -    73,805    -    -    73,805 
Reclassification of Series D warrants to equity   -    -    -    -    -    -    337,400    -    -    337,400 
Conversion of Series B Preferred Stock   -    -    (6,100)   (6)   2,119,713    2,120    150,983    -    -    153,097 
Conversion of Series D Preferred Stock to Common Stock   -    -    -    -    15,773,363    15,773    6,422,441    -    -    6,438,214 
Conversion of Short-term related party convertible notes to Preferred Stock   35,860,079    35,860    -    -    -    -    412,541    -    -    448,401 
Issuance of Common Stock in connection with extinguishment of short term notes, related parties   -    -    -    -    4,368,278    4,368    214,046    -    -    218,414 
Deemed dividend on Series D Preferred Stock   -    -    -    -    -    -    (277,719)   -    -    (277,719)
Deemed dividend on Series D Preferred Stock at issuance   -    -    -    -    -    -    -    (37,207)   -    (37,207)
Conversion of related party warrants to equity   -    -    -    -    -    -    107,123    -    -    107,123 
Issuance of Common Stock in exchange for consulting fees incurred   -    -    -    -    109,375   109    34,891    -    -    35,000 
Issuance of warrants pursuant to private placement of Series D Convertible Preferred Stock   -    -    -    -    -    -    31,902    -    -    31,902 
Conversion of short-term convertible notes to Preferred Stock   287,984,337    287,984    -    -    -    -    4,751,484    -    -    5,039,468 
Issuance of warrants pursuant to extension of convertible short-term notes   -    -    -    -    -    -    17,636    -    -    17,636 
Issuance of warrants pursuant to extension of maturity date on convertible debt   -    -    -    -    -    -    6,595    -    -    6,595 
Issuance of Series A Preferred Stock in Rights Offering   218,285,024    218,285    -    -    -    -    2,517,451    -    -    2,735,736 
Share based compensation   -    -    -    -    -    -    643    -    -    643 
Net loss   -    -    -    -    -    -    -    (4,898,685)   -    (4,898,685)
Balances – September 30, 2020   542,129,440   $542,129    -   $-    122,139,433   $122,139   $42,489,998   $(42,298,423)  $(370,132)  $485,711 

 

   Preferred Series A Stock   Preferred Series B Stock   Common Stock   Additional Paid-in   Accumulated   Non-controlling   Total Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount  
Capital
   Deficit   Interest  
Deficit
 
Balances - December 31, 2020   538,109,409   $538,109    -   $     -    127,159,464   $127,159   $42,515,999   $(43,858,974)  $(370,132)  $(1,047,839)
Conversion of Series A Preferred Stock to common stock   (22,235,055)   (22,235)   -    -    22,235,055    22,235    -    -    -    - 
Share based compensation   -    -    -    -    -    -    1,024,359    -    -    1,024,359 
Net loss   -    -    -    -    -    -    -    (4,052,290)   -    (4,052,290)
Balances – September 30, 2021   515,874,354   $515,874    -   $-    149,394,519   $149,394   $43,540,358   $(47,911,264)  $(370,132)  $(4,075,770)

 

See accompanying notes to the consolidated financial statements

 

7

 

 

H-Cyte, Inc and Subsidiaries

Condensed Consolidated Statement of Cash Flows

 

         
   Nine Months Ended Sept 30, 
   2021   2020 
Cash Flows from Operating Activities          
Net loss  $(4,052,290)  $(4,898,685)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   13,859    69,447 
Amortization of debt discount   -    1,395,007 
Forgiveness of PPP loan   (698,820)   - 
Issuance of warrants to extend convertible debt   -    

17,636

 
Issuance of warrants pursuant to short-term notes, related party   -    (1,300,088)
Issuance of warrants to extend short-term debt   -    6,595 
Share based compensation expense   1,024,359    643 
Common stock issued for consulting services   -    35,000 
Change in fair value of derivative liability - warrants    -    (2,986,853)
Change in fair value of derivative liability - warrants   -    

(272,705

)
Change in fair value of derivative liability - Day one derivative loss   -    2,306,121 
Warrant modification expense   -    70,851 
Loss on disposal of property and equipment   92,804    - 
Changes in operating assets and liabilities:          
Accounts receivable   (9,200)   20,167 
Patient financing receivable, current portion   (35,080)   - 
Other receivables   21,572    

16,372

 
Patient financing receivable, net of current portion   (61,547)   - 
Prepaid expenses and other assets   (968)   707,457 
Interest payable   6,333   35,565 
Accounts Payable   37,759    (237,409)
Accrued liabilities   (89,296)   (21,206)
Other current liabilities   (13,482)   (15,680) 
Deferred revenue   (224,118)   (409,375)
           
Net Cash Used in Operating Activities   (3,988,115)   (5,461,140)
           
Cash Flows from Investing Activities          
Purchase of property and equipment   (7,832)   

(2,285

) 
Net Cash Used in Investing Activities   (7,832)   

(2,285

) 
           
Cash Flows from Financing Activities          
Proceeds from convertible notes payable, related parties   1,584,665    - 
Proceeds from convertible notes payable   1,091,080    - 
Proceeds from PPP loan   -    809,082 
Payments on PPP Loan   

(13,230

)   

(10,937

)
Proceeds from warrants, net of issuance costs   -    3,842,695 
Proceeds from issuance of Preferred Stock Series A, net of issuance costs   -    

2,735,736

 
Proceeds from issuance of Series D Convertible Preferred Stock   -    100,000 
Net Cash Provided by Financing Activities   

2,662,515

    7,476,576 
           
Net Change in Cash   (1,333,432)   2,013,151 
           
Cash - Beginning of period   1,640,645    1,424,096 
           
Cash - End of period  $307,213   $3,437,247 
           
Supplementary Cash Flow Information          
Cash paid for interest  $3,367   $17,066 
           
Non-cash investing and financing activities          
Deemed Dividend on Series D Convertible Preferred Stock  $ -   $ 314,926 
Conversion of Series D Preferred Stock to Common Stock   -    6,438,214 
Conversion of related party (Horne) warrants to equity   -    

107,123

 
Reclassification of Series B warrants to equity   -    73,805 
Reclassification of Series D warrants to equity   -    337,400 
Issuance of Common Stock in exchange for consulting fees   -    35,000 
Issuance of warrants to extend short-term debt   -    6,595 
Issuance of warrants pursuant to extension of convertible short-term notes   -    

17,636

 
Conversion of Series B Preferred Stock to Common Stock   -    

153,097

 
Conversion of short-term related party convertible notes to Preferred Stock   -    

412,541

 
Conversion of short-term convertible notes to Preferred Stock   -    

4,751,484

 
Dividends accrued on Series B Preferred Stock   -    

44,456

 
Adjustment of exercise price on convertible debt   -    

438,913

 
Issuance of Common Stock in connection with extinguishment of short-term notes, related parties   -    

218,414

 
Issuance of Warrants in connection with Series D Convertible Preferred Stock   -    

31,902

 

 

See accompanying notes to the consolidated financial statements

 

8

 

 

H-CYTE, INC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 - Description of the Company

 

H-CYTE, Inc (“the Company”) is a hybrid-biopharmaceutical company dedicated to developing and delivering new treatments for patients with chronic respiratory and pulmonary disorders. During the last two years, the Company has evolved into two separate divisions with its entrance into the biologics development space (“Biologics Division”). This new division is complementary to the Company’s current Lung Health Institute (LHI) autologous infusion therapy business (“Infusion Division”) and is focused on underserved disease states. On September 8, 2021, the Company announced that its Lung Health Institute facilities changed its name to Centers for Respiratory Health as the clinics continue to deliver treatments for patients with chronic respiratory and pulmonary disorders.

 

The consolidated results for H-CYTE include the following wholly-owned subsidiaries: H-CYTE Management, LLC, Medovex Corp, Cognitive Health Institute, LLC, and Lung Institute Tampa, LLC and the results include Lung Institute Dallas, 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. The LI Dallas and LI Pittsburgh clinics did not reopen in 2020 after the temporary closure of all LI clinics due to COVID-19. These two clinics will remain permanently closed.

 

On September 11, 2020, with the closing of the Rights Offering, FWHC, LLC, FWHC Bridge, LLC, and FWHC Bridge Friends, LLC (collectively known as “FWHC”) gained control of the Company by subsequently owning approximately 61% of the fully diluted shares of the Company (for further discussion, see Notes 8 and 9-”Equity Transactions” to the consolidated financial statements in the Company’s 2020 Annual Report on Form 10-K).

 

Autologous Infusion Therapy (“Infusion Division”)

 

The Infusion Division develops and implements innovative treatment options in autologous cellular therapy (PRP-PBMC) to treat chronic lung disorders. Committed to an individualized patient-centric approach, this division provides oversight and management of the highest quality to the LHI clinics, while producing positive medical outcomes following the strictest Centers for Disease Control and Prevention (the “CDC”) guidelines.

 

Biotech Development (“Biologics Division”)

 

On June 21, 2019, H-CYTE entered into an exclusive product supply agreement with Rion, LLC (“Rion”) to develop and distribute (post U.S. Food & Drug Administration, the “FDA”, approval) a biologic combining its PRP-PBMC technology with Rion’s exosomes (“EV”) technology for the treatment of chronic obstructive pulmonary disease (“COPD”), the fourth leading cause of death in the U.S. Rion has established a novel EV technology to harness the healing power of the body. Rion’s innovative 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 10-year exclusive and extendable supply agreement with Rion to enable H-CYTE to develop combined proprietary biologics. The Company is evaluating alternate EV technologies to determine the most favorable path forward.

 

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 biologic and (ii) subsequently assisting H-CYTE in seeking and obtaining FDA Phase 1 IND clearance for this biologic as necessary. Rion has completed the research and development work which is under review by the Company. The Company is assessing if the Rion combined proprietary biologic is a more viable solution than potentially progressing with a single entity biologic from an alternative commercial source.

 

9

 

 

On April 2, 2021, the Company entered into a series of agreements with Medovex, LLC to pursue a joint venture regarding the continued development and commercialization of the DenerveX device for business outside of the U.S. The Company has determined that the transactions resulting from the series of agreements with Medovex, LLC are immaterial. The Company will assess the progress of the joint venture on a quarterly basis for materiality.

 

Note 2 – Basis of presentation

 

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, 2020 and 2019, which included all information and notes necessary for such complete presentation in conjunction with its 2020 Annual Report on Form 10-K.

 

The results of operations for the interim period ended September 30, 2021 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, 2020, which are contained in the Company’s 2020 Annual Report on Form 10-K. For further discussion refer to Note 2 – “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, 2020.

 

Note 3 - Liquidity, Going Concern and Management’s Plans

 

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

 

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

 

10

 

 

Convertible Notes Payable

 

On April 1, 2021, the Company, entered into a Secured Convertible Note Purchase Agreement (the “April 2021 Note Purchase Agreement”) with five (5) investors (the “Holders”). Pursuant to the terms of the April 2021 Note Purchase Agreement, the Company sold promissory notes in the aggregate principal amount of $2,575,000 maturing on March 31, 2022 with an annual interest rate of 8%. The Notes, plus accrued interest, are convertible into shares of Common Stock at a discount of 20% to the price paid for such New Securities in the next round of financing that meets the definition of Qualified Financing as defined in the April 2021 Note Purchase Agreement. The Notes are secured by the assets of the Company under a security agreement with the Holders. The lead investor of the April 2021 Note Purchase Agreement, FWHC Bridge, LLC, advanced $1,500,000 of the total amount to the Company. FWHC Bridge, LLC is an affiliated entity of FWHC, LLC, which is a principal stockholder and related party of the Company. An additional affiliate of FWHC, LLC provided an additional $25,000 as part of the April 2021 Note Purchase Agreement.

 

On October 14, 2021, H-Cyte, Inc. (the “Company”) entered into the Second Closing Bring Down Agreement (the “October 2021 Note Purchase Agreement”) whereby the five (5) investors who had entered into the April 2021 Note Purchase Agreement purchased new notes in the Company in the aggregate principal amount of $750,000. The Notes are due and payable on March 31, 2022 and bear interest at an annual rate of 8%. The Notes are convertible into shares of Common Stock at a discount of 20% to the price paid for such New Securities in the next financing that meets the definition of a Qualified Financing as defined in the April 2021 Note Purchase Agreement. The Notes are secured by all of the assets of the Company under a security agreement with the Holders. The lead investor of the October 2021 Note Purchase Agreement, FWHC Bridge, LLC, advanced $437,000 of the total amount to the Company. FWHC Bridge, LLC is an affiliated entity of FWHC, LLC, which is a principal stockholder and related party of the Company. An additional affiliate of FWHC, LLC provided an additional $7,500 as part of the October 2021 Note Purchase Agreement. The Company chose early adoption of ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity effective January 1, 2021 related to the April 2021 and October 2021 Note Purchase Agreements.

 

The Company had cash on hand of approximately $307,000 as of September 30, 2021 and approximately $644,000 as of November 9, 2021. The Company’s cash is insufficient to fund its operations over the next year and the Company is currently working to obtain additional debt or equity financing to help support the Biosciences Division’s business model.

 

There can be no assurance that the Company will be able to raise additional funds or that the terms and conditions of any future financings will be workable or acceptable to the Company or its shareholders. If the Company is unable to fund its operations from existing cash on hand, operating cash flows, additional borrowings, or raising equity capital, the Company may be forced to 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.

 

Note 4 – Right-of-use Asset And Lease Liability

 

The components of lease expense, which are included in other general and administrative expense, for the three and nine months ended September 30, 2021 and 2020, respectively, are as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
    2021    2020    2021    2020 
Operating lease expense  $69,582    140,381    253,233    442,409 

 

Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2021 and 2020, respectively, are as follows:

SCHEDULE OF CASH PAID FOR AMOUNTS INCLUDED THE MEASUREMENT OF LEASE LIABILITIES 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
    2021    2020    2021    2020 
Operating cash flows from operating leases  $69,582    140,381    253,233    442,409 

 

Supplemental balance sheet and other information related to operating leases are as follows:

SCHEDULE OF SUPPLEMENTAL BALANCE SHEET AND OTHER INFORMATION 

   September 30, 2021   December 31, 2020 
         
Operating leases right-of-use assets  $162,207    278,552 
Lease liability, current portion   92,589    139,189 
Lease liability, net of current portion   87,304    157,050 
Total operating lease liabilities  $179,893    296,239 
Weighted average remaining lease term   1.92 years    2.32 years 
Weighted average discount rate   9.96%   10.31%

 

11

 

 

Future maturities of operating lease liabilities as of September 30, 2021 are as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES 

   Operating leases 
     
Remainder of 2021  $25,584 
2022   102,891 
2023   69,333 
Total lease payments   197,808 
Less: Interest   17,915 
Total lease liability  $179,893 

 

The Company did not renew its corporate office space lease in Tampa, FL which expired on March 31, 2021. The Company leases medical clinic space in Tampa, FL, Nashville, TN, and Scottsdale, AZ. These clinic locations have various expiration dates through August 31, 2023. The leasing arrangements contain various renewal options that are adjusted for increases in the consumer price index or agreed upon rates. The Company entered into a twelve-month lease extension for its Tampa location beginning April 1, 2021 totaling $71,775. The Company also entered into a twelve-month lease extension for its Nashville location beginning November 1, 2021 totaling $94,500. The Dallas, TX lease expired on July 31, 2020 and the Pittsburgh, PA lease expired on October 31, 2020, neither of which were renewed as these clinic locations were permanently closed. The Company decided that its corporate staff will continue working remotely but the Company will have a small corporate meeting room in the Tampa LHI clinic.

 

Note 5