Quarterly report pursuant to Section 13 or 15(d)

Common Stock Warrants

v3.20.2
Common Stock Warrants
9 Months Ended
Sep. 30, 2020
Equity [Abstract]  
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.