| Common Stock Warrants |
Note 13 - Common Stock
Warrants
A summary of the Company’s warrant issuance
activity and related information for the quarters ended September 30, 2020 and September 30, 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 September 30, 2019 |
|
|
29,608,743 |
|
|
$ |
1.00 |
|
|
|
2.63 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding and exercisable at December 31, 2019 |
|
|
44,806,076 |
|
|
$ |
0.78 |
|
|
|
4.59 |
|
| Issued and exercisable |
|
|
368,325,486 |
|
|
|
0.015 |
|
|
|
10.30 |
|
| Total outstanding at September 30, 2020 |
|
|
413,131,562 |
|
|
|
0.09 |
|
|
|
9.79 |
|
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 |
|
| Granted for bridge financing |
|
4/8/2020 |
|
|
296,875 |
|
|
$ |
0.05 |
|
|
$ |
0.40 |
|
|
$ |
0.04 |
|
|
|
3 years |
|
|
|
0.34 |
|
|
|
131.82 |
|
| Short-term note, related party conversion |
|
4/17/2020 |
|
|
4,368,278 |
|
|
$ |
0.05 |
|
|
$ |
0.014 |
|
|
$ |
0.05 |
|
|
|
10 years |
|
|
|
0.65 |
|
|
|
102.54 |
|
| Granted for bridge financing(2) |
|
9/11/2020 |
|
|
363,146,765 |
|
|
$ |
0.05 |
|
|
$ |
0.014 |
|
|
$ |
0.017 |
|
|
|
10 years |
|
|
|
0.65 |
|
|
|
96.97 |
|
(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.
(2) The Company had estimated on April 17,
2020 that the number of warrants to be granted for the bridge financing would be 354,836,286. The bridge financing closed on September
11, 2020 in which an additional 8,310,479 warrants were issued above the original estimate for a total of 363,146,765. The fair
market value associated with the additional warrants issued was recorded to the change in fair value of derivative liability –
warrants prior to being reclassed to equity.
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.
|