Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Apr. 21, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | H-CYTE, INC. | ||
Entity Central Index Key | 0001591165 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
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 Public Float | $ 17,123,340 | ||
Entity Common Stock, Shares Outstanding | 99,878,079 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | ||
Current Assets | |||||
Cash | $ 1,424,096 | $ 69,628 | |||
Accounts receivable | 22,667 | 15,242 | |||
Other receivables | 18,673 | 5,144 | |||
Prepaid expenses | 810,143 | 59,678 | |||
Total Current Assets | 2,275,579 | 149,692 | |||
Right-of-use asset | 738,453 | [1] | |||
Property and equipment, net | 219,703 | 266,916 | |||
Other assets | 36,877 | 38,288 | |||
Total Assets | 3,270,612 | 454,896 | |||
Current Liabilities | |||||
Interest payable | 53,198 | 158,371 | |||
Accounts payable | 1,485,542 | 851,604 | |||
Accrued liabilities | 324,984 | 183,183 | |||
Other current liabilities | 175,181 | 462,856 | |||
Short-term notes, related party | 1,635,000 | 180,000 | |||
Short-term convertible notes payable | 424,615 | ||||
Notes payable, current portion | 66,836 | ||||
Dividend payable | 108,641 | ||||
Deferred revenue | 1,046,156 | 326,064 | |||
Lease liability, current portion | 453,734 | [1] | |||
Total Current Liabilities | 5,773,887 | 2,192,930 | |||
Long-Term Liabilities | |||||
Lease liability, net of current portion | 302,175 | [1] | |||
Notes payable, net of current portion | 11,545 | ||||
Convertible debt to related parties | 4,306,300 | ||||
Derivative liability - warrants | 315,855 | [2] | |||
Redemption put liability | [2] | 267,399 | |||
Deferred rent | 22,206 | ||||
Total Long-Term Liabilities | 896,974 | 4,328,506 | |||
Total Liabilities | 6,670,861 | 6,521,436 | |||
Commitments and Contingencies (Note 10) | |||||
Mezzanine Equity | |||||
Total Mezzanine Equity | 6,060,493 | ||||
Stockholders' Deficit | |||||
Common stock - $.001 par value: 199,000,000 and 49,500,000 shares authorized. 99,768,704 and 33,661,388 shares issued and outstanding at December 31, 2019 and 2018, respectively | 99,769 | 33,661 | |||
Additional paid-in capital | 28,172,146 | 3,566,339 | |||
Accumulated deficit | (37,362,531) | (9,296,408) | |||
Non-controlling interest | (370,132) | (370,132) | |||
Total Stockholders' Deficit | (9,460,742) | (6,066,540) | |||
Total Liabilities, Mezzanine Equity and Stockholders' Deficit | € 3,270,612 | 454,896 | |||
Series D Convertible Preferred Stock [Member] | |||||
Mezzanine Equity | |||||
Total Mezzanine Equity | 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 | ||||
Series C Convertible Preferred Stock [Member] | |||||
Stockholders' Deficit | |||||
Preferred Stock, value | |||||
[1] | There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. | ||||
[2] | 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 December 31, 2018 or 2019. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value | $ .001 | $ .001 |
Common stock, shares authorized | 199,000,000 | 49,500,000 |
Common stock, shares issued | 99,768,704 | 33,661,388 |
Common stock, shares outstanding | 99,768,704 | 33,661,388 |
Series D Convertible Preferred Stock [Member] | ||
Mezzanine equity, par value | $ .001 | $ .001 |
Mezzanine equity, shares authorized | 238,871 | 238,871 |
Mezzanine equity, shares issued | 146,998 | 0 |
Mezzanine equity, shares outstanding | 146,998 | 0 |
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 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 6,100 | 0 |
Preferred stock, shares outstanding | 6,100 | 0 |
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 - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 8,346,858 | $ 7,883,115 |
Cost of Sales | (2,052,807) | (2,366,569) |
Gross Profit | 6,294,051 | 5,516,546 |
Operating Expenses | ||
Salaries and related costs | 8,646,471 | 3,778,917 |
Other general and administrative | 6,953,549 | 3,352,104 |
Advertising | 4,909,724 | 1,875,731 |
Loss on impairment | 15,508,401 | 606,595 |
Depreciation & amortization | 834,291 | 95,245 |
Total Operating Expenses | 36,852,436 | 9,708,592 |
Operating Loss | (30,558,385) | (4,192,046) |
Other Income (Expense) | ||
Other expense | (124,118) | (17,920) |
Interest expense | (299,331) | (184,183) |
Change in fair value of redemption put liability | 346,696 | |
Change in fair value of derivative liability - warrants | 827,260 | |
Total Other Income (Expenses) | 750,507 | (202,103) |
Net Loss | (29,807,878) | (4,394,149) |
Accrued dividends on Series B Preferred Stock | 84,939 | |
Finance costs on issuance of Series D Convertible Preferred Stock | 66,265 | |
Deemed dividend on adjustment to exercise price on convertible debt and certain warrants | 287,542 | |
Deemed dividend on Series D Convertible Preferred Stock | 2,916,813 | |
Deemed dividend on beneficial conversion features | 32,592 | |
Net loss attributable to common stockholders | $ (33,196,029) | $ (4,394,149) |
Loss per share - Basic and Diluted | $ (0.34) | $ (0.13) |
Weighted average outstanding shares used to compute basic and diluted net loss per share | 96,370,562 | 33,661,388 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total |
Beginning Balance at Dec. 31, 2017 | $ 33,661 | $ 3,566,339 | $ (4,868,454) | $ (403,937) | $ (1,672,391) | |
Beginning Balance, Shares at Dec. 31, 2017 | 33,661,388 | |||||
Acquisition of State, LLC | (33,805) | (33,805) | ||||
Beneficial conversion of Series D Convertible Preferred Stock | ||||||
Net loss | (4,394,149) | (4,394,149) | ||||
Ending Balance at Dec. 31, 2018 | $ 33,661 | 3,566,339 | (9,296,408) | (370,132) | (6,066,540) | |
Ending Balance, shares at Dec. 31, 2018 | 33,661,388 | |||||
Purchase accounting adjustments | $ 9 | $ 24,717 | 12,657,182 | 12,681,908 | ||
Purchase accounting adjustments, shares | 9,250 | 24,717,270 | ||||
Adjustment for assets and liabilities not included in Merger | 5,258,300 | 5,258,300 | ||||
Issuance of common stock in connection with private placement offering | $ 17,700 | 4,402,087 | 4,419,787 | |||
Issuance of common stock in connection with private placement offering, shares | 17,700,000 | |||||
Issuance of warrants in connection with private placement offering | 2,663,797 | 2,663,797 | ||||
Finance costs on issuance of Series B Convertible Preferred Stock and related warrants | (132,513) | (132,513) | ||||
Issuance of common stock pursuant to conversion of short-term debt | $ 500 | 125,437 | 125,937 | |||
Issuance of common stock pursuant to conversion of short-term debt, shares | 500,000 | |||||
Issuance of warrants pursuant to conversion of short-term debt | 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 convertible short-term debt | $ 250 | 99,750 | 100,000 | |||
Issuance of common stock pursuant to conversion of convertible short-term debt, shares | 250,000 | |||||
Issuance of common stock pursuant to warrant exchange | $ 403 | 72,160 | 72,563 | |||
Issuance of common stock pursuant to warrant exchange, shares | 403,125 | |||||
Conversion of Preferred Series B Stock | $ (2) | $ 716 | (714) | |||
Conversion of Preferred Series B Stock, shares | (2,650) | 715,279 | ||||
Repurchase of Series B Convertible Preferred Stock | $ (1) | (49,999) | (50,000) | |||
Repurchase of Series B Convertible Preferred Stock, shares | (500) | |||||
Issuance of common stock to pay accrued dividends on Series B Convertible Preferred Stock | $ 50 | 19,376 | 19,426 | |||
Issuance of common stock to pay accrued dividends on Series B Convertible Preferred Stock, shares | 50,367 | |||||
Issuance of common stock to pay accrued interest on convertible short-term debt | $ 2 | 665 | 667 | |||
Issuance of common stock to pay accrued interest on convertible short-term debt, shares | 1,667 | |||||
Issuance of common stock in exchange for consulting fees incurred | $ 280 | 95,253 | 95,533 | |||
Issuance of common stock in exchange for consulting fees incurred, shares | 280,085 | |||||
Deemed dividend on adjustment to exercise price on convertible debt and certain warrants | 287,542 | (287,542) | ||||
Deemed dividend on beneficial conversion features | 32,592 | (32,592) | ||||
Issuance of common stock per restricted stock award to executive (Note 9) | $ 4,225,634 | 1,686,028 | 1,690,254 | |||
Issuance of common stock per restricted stock award to executive (Note 9), shares | 4,226 | |||||
Issuance of warrants pursuant to short-term notes, related party | 56,378 | 56,378 | ||||
Issuance of warrants pursuant to extension of maturity date on convertible debt | 106,158 | 106,158 | ||||
Deemed dividend on Series D Convertible Preferred Stock | (60,493) | (3,130,146) | (3,190,639) | |||
Beneficial conversion of Series D Convertible Preferred Stock | 623,045 | 623,045 | ||||
Finance costs on issuance of Series D Convertible Preferred Stock | (37,618) | (66,265) | (103,883) | |||
Issuance of warrants pursuant to private placement of Series D Convertible Preferred Stock | 1,893,006 | 1,893,006 | ||||
Stock based compensation | 94,828 | 94,828 | ||||
Accrued dividends on Series B Convertible Preferred Stock | (84,939) | (84,939) | ||||
Net loss | (29,807,878) | (29,807,878) | ||||
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 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (29,807,878) | $ (4,394,149) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 834,291 | 95,245 |
Loss on impairment | 15,508,401 | 606,595 |
Amortization of debt discount | 152,342 | |
Interest and penalties on extension of short-term convertible notes | 85,365 | |
Stock based compensation | 1,785,082 | |
Loss on write-off of inventory | 131,455 | |
Common stock issued for consulting services | 95,533 | |
Issuance of warrants to extend short-term debt | 106,158 | |
Change in fair value of derivative liability - warrants and redemption put liability | (1,173,956) | |
Bad debt expense | 90,137 | |
Changes in operating assets and liabilities, net of purchase transaction: | ||
Accounts receivable | 48,195 | 2,189 |
Other receivables | (13,529) | |
Accounts receivable from related party | 56,342 | |
Prepaid expenses and other assets | (697,529) | 83,855 |
Interest payable | (10,592) | 158,371 |
Accounts payable | 121,907 | (97,638) |
Accrued liabilities | (263,874) | (121,761) |
Other current liabilities | (2,875) | 353,414 |
Deferred revenue | 720,092 | (309,376) |
Deferred rent | 22,206 | |
Net Cash Used in Operating Activities | (12,291,275) | (3,544,707) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (20,685) | (11,295) |
Purchases of intangible assets | (12,000) | |
Purchase of business, net of cash acquired | (302,711) | |
Cash excluded in Merger | (69,629) | |
Net Cash Used in Investing Activities | (393,025) | (23,295) |
Cash Flows from Financing Activities | ||
Proceeds from short-term notes, related party | 1,635,000 | 180,000 |
Proceeds from line of credit, related parties | 756,350 | |
Repayment of line of credit, related parties | (1,856,350) | |
Proceeds from issuance of note payable, related parties | 4,306,300 | |
Payment of dividends | (14,684) | |
Payment on debt obligations | (370,636) | |
Proceeds from common stock, net of issuance costs | 4,337,106 | |
Proceeds from warrants, net of issuance costs | 2,613,965 | |
Proceeds from issuance of Series D Convertible Preferred stock, net of issuance costs | 5,888,017 | |
Payment on Preferred stock Series B redemption | (50,000) | |
Net Cash Provided by Financing Activities | 14,038,768 | 3,386,300 |
Net Increase (Decrease) in Cash | 1,354,468 | (181,702) |
Cash - Beginning of period | 69,628 | 251,330 |
Cash - End of period | 1,424,096 | 69,628 |
Supplementary Cash Flow Information | ||
Cash paid for interest | 197,500 | 25,812 |
Acquisition of State, LLC non-controlling interest | 33,805 | |
Property and equipment purchases included in accounts payable | 184,800 | |
Non-cash investing and financing activities | ||
Common stock issued to pay accrued dividends | 19,426 | |
Deemed dividend on adjustment to exercise price on convertible debt and certain warrants | 287,542 | |
Deemed dividend on beneficial conversion features | 32,592 | |
Conversion of debt obligations to common stock | 225,937 | |
Issuance of common stock pursuant to warrant exchange | 72,563 | |
Issuance of warrants pursuant to conversion of short-term debt | 74,063 | |
Issuance of warrants pursuant to note payable, related party | 56,378 | |
Issuance of warrants to extend short-term debt | 106,158 | |
Deemed dividend on Series D Convertible Preferred Stock | 3,190,639 | |
Issuance of Warrants in connection with Series D Convertible Preferred Stock | 1,893,006 | |
Beneficial conversion of Series D Convertible Preferred Stock | 623,045 | |
Dividends accrued on Series B Convertible Preferred Stock | 65,512 | |
Right-of-use asset additions | 1,165,785 | |
Right-of-use liability additions | $ 1,187,991 |
Description of the Company
Description of the Company | 12 Months Ended |
Dec. 31, 2019 | |
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. Prior to the merger of H-CYTE and RMS on January 8, 2019 (the “Merger”), the consolidated results for H-CYTE include Regenerative Medicine Solutions, LLC, LI, RMS Nashville, LLC (“Nashville”), RMS Pittsburgh, LLC (“Pittsburgh”), RMS Scottsdale, LLC (“Scottsdale”), RMS Dallas, LLC (“Dallas”), State, LLC (“State”), Cognitive Health Institute of Tampa (“CHIT”), RMS LI Management, and Shareholder and H-CYTE 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”). 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 of the aforementioned 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 Company has two divisions: the medical biosciences division (“Biosciences division”) and the DenerveX medical device division (“DenerveX division”). The Company has 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 10-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. The Company also applied for a grant in March 2020 through Biomedical Advanced Research and Development Authority (“BARDA”) to develop a protocol for the treatment of COVID-19. There can be no assurances that the Company will receive this grant. Proprietary Medical Device Business (DenerveX 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 second quarter of 2019, the Company determined that their contract manufacturer was not able to meet the requirements for producing the finished DenerveX product. Additionally, in its evaluation of its current distribution channels, the Company determined that many of these channels were not cost effective. As a result of the above evaluations, certain European distributor agreements were terminated; all other representatives were notified that the Company had temporarily suspended the manufacture and sale of the DenerveX product; the Company continued to source alternative manufacturing and distributor options; and the Company is considering other product monetizing strategies, including, but not limited to, strategic partnerships. To date, these efforts have not been successful. 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. Considering the events and circumstances described above, the Company performed a long-lived asset impairment analysis. Based on the assumption there would be no future cash flows associated with the DenerveX product, management recorded an impairment loss of $2,944,000 for the unamortized intangible-technology for the year ended December 31, 2019. The DenerveX Pro-40 generator is provided to customers agreeing to purchase the DenerveX device and cannot be used for any other purpose. Due to the generator not being able to be used for any other purpose, the Company has written off inventory totaling $131,000 as obsolete for the year ended December 31, 2019. |
Liquidity, Going Concern and Ma
Liquidity, Going Concern and Management's Plans | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity, Going Concern and Management's Plans | Note 2 - Liquidity, Going Concern and Management’s Plans The Company incurred net losses of approximately $29,808,000 and $4,394,000 for the years ending December 31, 2019 and 2018, 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 Biosciences division 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. The recent coronavirus outbreak (“COVID-19”) has adversely affected the Company’s financial condition and results of operations. The impact of the outbreak of COVID-19 on the businesses and the economy in the U.S. and the rest of the world is, and is expected to continue to be, significant. The extent to which the COVID-19 outbreak will impact business and the economy is highly uncertain and cannot be predicted. Accordingly, the Company cannot predict the extent to which its financial condition and results of operation will be affected. The Company recently has taken 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. This decision has put significant financial strain on the Company. 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 believes these expense reductions are necessary during the unexpected COVID-19 pandemic. Due to 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 fourth quarter 2019 revenue was approximately $1.8 million. The Company expects that the first quarter of 2020 will be substantially less than the fourth quarter of 2019, 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. 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 and April 9, 2020, the Company issued a demand note (the “Note”), each one in the principal amount of $500,000 to FWHC Bridge, LLC (the “Investor”) for a total of $1,000,000 in exchange for loans in such amount to cover working capital needs. Each Note bears simple interest at a rate of 8% 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. On April 17, 2020, the Company entered into a Secured Convertible Note and Warrant Purchase Agreement (the “April SPA”) with an aggregate of 32 investors (the “Purchaser(s)”) pursuant to which the Company received an aggregate of $2,812,445 in gross proceeds (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 an aggregate of $2,812,445 in Secured Convertible Promissory Notes (the “April Secured Notes’). The April Secured Notes bear interest at 12% per annum and have a maturity date of October 31, 2020. The April Secured Notes are secured by all of the Company’s assets pursuant to a security agreement and an intellectual Property Security Agreement which are included as Exhibits to this Annual report on Form 10-K. The conversion price of the April Secured Notes shall be equal to the lesser of (i) the price per share paid by an investor, in the Qualified Financing (as defined below) for such new securities and (ii) the price per share obtained by dividing (x) $3,000,000 by the number of fully diluted shares outstanding immediately prior to the Qualified Financing. Qualified Financing is defined as an offering of preferred stock of at least $3.6 million, exclusive of the conversion of any April Secured Note or the Backstop Commitment (as defined below), at a price of at least $0.01279 per share. The obligations on the April Secured Notes are guaranteed by each of the Company’s subsidiaries. FWHC Bridge, LLC, which is an affiliate of FWHC, who has acted as our lead investor in the last several financing transactions and was the lender of the $1,000,000 loaned to the Company in March and April, was the lead investor in the April Offering purchasing $1,535,570 of April Secured Notes. YPH Holdings, LLC, which is an affiliate of Michael Yurkowsky, who is a Director of the Company, purchased $25,000 of April Secured Notes on the same terms as all other investors. Each Purchaser received a warrant to purchase 100% of the aggregate number of shares of common stock into which such Purchaser’s April Secured Note may ultimately be converted, except that the holders of the Notes issued in March and April in the total amount of $1,000,000 received warrants to purchase up to 200% of the aggregate number of shares of Common stock into which such Note may ultimately be converted The April Warrants have an exercise price equal to the purchase price in the Qualified Offering. The April SPA provides a commitment on the part of each Purchaser to agree to invest an identical amount (as purchased in the April Offering) in the Qualified Offering as a backstop commitment (the “Backstop Commitment”). The Qualified Offering is contemplated to be made in the form of a rights offering to holders of all of the Company’s common stock. Accordingly, in the event that any stockholders do not participate in the Qualified Offering, their purchase would be filled by the Purchasers on a pro rata basis. In the event that any Purchaser fails to fulfil its Backstop Commitment then the April Warrants issued to such Purchaser in the April Offering will be cancelled. In connection with the April Offering, the Company’s CEO Bill 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 (i.e. $225,000 per annum. Mr. Horne also agreed to subordinate the promissory notes owed to him by the Company to the April Secured Notes. As part of the April Offering, the holders of certain existing warrants which contained anti- dilution price protection and other objectionable features that would have been triggered by the April Offering agreed to a one- time adjustment of their exercise price to $.015 per share and to gross up the number of warrants issuable. In consideration, the holders of such pre-existing warrants waived all future anti- dilution price protection. In addition, in connection with the April Offering, the Company entered into an amendment with the Investor for the remaining convertible notes which were originally issued in 2018 and assumed in the Merger. These notes have a principal amount of $424,615 as of December 31, 2019. The amendment provides that the conversion price of the notes will be equal to the purchase price in the Qualified Offering. The holder waived all future anti-dilution price protection. As of December 31, 2019, the Company had cash on hand of $1,424,096. Cash on hand at April 13, 2020 was approximately $585,000. The Company’s cash is insufficient to fund its operations in the near-term 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 our 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 and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 3 – Basis Of Presentation And Summary of Significant Accounting Policies 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 audited consolidated balance sheets, consolidated statements of operations, consolidated statements of stockholders’ deficit, and the consolidated statements of cash flows do not reflect the historical financial information related to H-CYTE prior to the Merger as they only reflect the historical financial information related to RMS. For the audited consolidated statements of stockholders’ deficit, 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 at the beginning of the periods presented. Principles of Consolidation U.S. GAAP requires that a related entity be consolidated with a company when certain conditions exist. An entity is considered to be a VIE when it has equity investors who lack the characteristics of having a controlling financial interest, or its capital is insufficient to permit it to finance its activities without additional subordinated financial support. Consolidation of a VIE by the Parent would be required if it is determined that the Parent will absorb a majority of the VIE’s expected losses or residual returns if they occur, retain the power to direct or control the VIE’s activities, or both. The accompanying audited consolidated financial statements include the accounts of the Parent, its wholly owned subsidiaries, and its VIEs. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates In preparing the financial statements, U.S. GAAP requires disclosure regarding estimates and assumptions used by management that affect the amounts reported in financial statements and accompanying notes. Actual results could differ from those estimates. Cash The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash balances at December 31, 2019 and 2018 consists of funds deposited in checking accounts with commercial banks. Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. Trade accounts receivable are stated net of an estimate made for doubtful accounts, if any. Management evaluates the adequacy of the allowance for doubtful accounts regularly to determine if any account balances will potentially be uncollectible. Customer account balances are considered past due or delinquent based on the contractual agreement with each customer. Accounts are written off when, in management’s judgment, they are considered uncollectible. At December 31, 2019 and December 31, 2018, management believes no allowance is necessary. For the year ended December 31, 2019 and 2018, the Company recorded bad debt expense of approximately $90,000 and $3,000, respectively. Impairment of Long-Lived Assets The Company reviews the values assigned to long-lived assets, including property and equipment and certain intangible assets, to determine whether events and circumstances have occurred which indicate that the remaining estimated useful lives may warrant revision or that the remaining balances may not be recoverable. The evaluation of asset impairment requires management to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment, and actual results may differ from estimated amounts. In such reviews, undiscounted cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required. For the year ended December 31, 2019 and 2018, the Company recognized an impairment charge of approximately $2,944,000 and $607,000, respectively, related to certain intangible assets (See Note 7). Goodwill Goodwill represents the excess of purchase price over fair value of net identified tangible and intangible assets and liabilities acquired. The Company does not amortize goodwill; it tests goodwill for impairment on at least an annual basis. An impairment loss, if any, is measured as the excess of the carrying value of the reporting unit over the fair value of the reporting unit. As of December 31, 2019, the Company performed a quantitative test and determined that the carrying value of the reporting unit exceeded the fair value. The Company’s goodwill balance was determined to be impaired as of the balance sheet date due to the adverse financial results for 2019, the negative projected cash results for 2020 and a significant decline in its market capitalization. As a result, we recorded a goodwill impairment charge of approximately $12,564,000 during the year ended December 31, 2019 (See Note 7). Leases In February 2016, the Financial Accounting Standard Board (“FASB”) established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02 (as amended), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company has not entered into significant lease agreements in which it is the lessor. For the lease agreements in which the Company is lessee, under Topic 842, lessees are required to recognize a lease liability and right-of-use asset for all leases (except for short-term leases) at the lease commencement date. Effective January 1, 2019, the Company adopted this guidance, applied the modified retrospective transition method and elected the transition option to use the effective date as the date of initial application. The Company recognized the cumulative effect of the transition adjustment on the consolidated balance sheet as of the effective date and did not provide any new lease disclosures for periods before the effective date. With respect to the practical expedients, the Company elected the package of transitional-related practical expedients and the practical expedient not to separate lease and non-lease components. Other Receivables Other receivables totaling approximately $19,000 and $5,000 at December 31, 2019 and 2018, respectively include receivables from the non-acquired Lung Institute, LLC due to Lung Institute Tampa, LLC for approximately $10,000 and $0, and approximately $9,000 and $5,000 reimbursement receivable for expenses from RMS at December 31, 2019 and 2018, respectively. The $10,000 receivable was a result of the Lung Institute, LLC being a transitory entity for Lung Institute Tampa, LLC while the merchant services accounts are being transferred. Revenue Recognition The Company recognizes revenue in accordance with U.S. GAAP as outlined in the FASB ASC 606, Revenue From Contracts with Customers The Company uses a standard pricing model for the types of cellular therapy treatments that is offered to its patients. The transaction price accounts for medical, surgical, facility, and office services rendered by the Company for consented procedures and is recorded as revenue. The Company recognizes revenue when the terms of a contract with a patient are satisfied. The Company offers two types of cellular therapy treatments to their patients. 1) The first type of treatment includes medical services rendered typically over a two-day period in which the patient receives cellular therapy. For this treatment type, revenue is recognized in full at time of service. 2) The Company also offers a four-day treatment in which medical services are rendered typically over a two-day period and then again, approximately three months later, medical services are rendered for an additional two days of treatment. Payment is collected in full for both service periods at the time the first treatment is rendered. Revenue is recognized when services are performed based on the estimated standalone selling price of each service. The Company has deferred recognition of revenue amounting to approximately $1,046,000 and $326,000 at December 31, 2019 and 2018, respectively. The Company’s policy is to not offer refunds to patients. However, in limited instances the Company may make exceptions to this policy for extenuating circumstances. These instances are evaluated on a case by case basis and may result in a patient refund. Management performed an analysis of its customer refund history for refunds issued related to prior year’s revenue. Management used the results of this historical refund analysis to record a reserve for anticipated future refunds related to recognized revenue. At December 31, 2019 and 2018, the estimated allowance for refunds was approximately $63,000 and $0, respectively and is recorded in a contra revenue account. Research and development costs Research and development expenses are recorded in operating expenses in the period in which they are incurred. Advertising Advertising costs are recorded in operating expenses in the period in which they are incurred. Stock-Based Compensation The Company maintains a stock option incentive plan and accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, “Income Taxes”. Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the difference turns around. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income and the availability of tax planning strategies. From inception to December 31, 2019, the Company has incurred net losses and, therefore, has no current income tax liability. The net deferred tax asset generated by these losses is fully reserved as of December 31, 2019 and 2018, respectively, since it is currently likely that the benefit will not be realized in future periods. As a result of the acquisition, the Company is required to file federal income tax returns and state income tax returns in the states of Arizona, Florida, Georgia, Minnesota, Pennsylvania, Tennessee, and Texas. There are no uncertain tax positions at December 31, 2019 or December 31, 2018. The Company has not undergone any tax examinations since inception. 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: 44,806,076 warrants and 425,000 common stock options outstanding were considered anti-dilutive and excluded for the year ending December 31, 2019. At December 31, 2019, 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 38,887,847 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. For the year ended December 31, 2018, there were no dilutive securities as the accounting acquirer did not historically have stock-based securities. Fair Value Measurements The Company measures certain non-financial assets, liabilities, and equity issuances at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets and non-amortizing intangible assets for impairment; allocating value to assets in an acquired asset group; and applying accounting for business combinations. The Company classified its stock warrants as either liability or equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity” (ASC 480) and ASC 815, “Derivatives and Hedging” (ASC 815), depending on the specific terms of the warrant agreement. The Series B Warrants included a down-round protection feature that would also result in the issuance of additional shares of stock, are classified as liabilities pursuant to ASC 815 and are initially and subsequently measured at their estimated fair values. The Company will continue to record liability-classified warrants at fair value until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. For additional discussion on the Series B Warrants, see Note 12. The Company classified a redemption provision in its Series D Preferred Stock as a derivative liability in accordance with ASC 815. The Company will continue to record the redemption provision as a “Redemption Put Liability” until the Series D is converted or redeemed. For additional discussion on the Redemption Put Liability, see Note 12. The Company uses the fair value measurement framework to value these assets and report the fair values in the periods in which they are recorded, adjusted above, or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: ● Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; ● Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data; and ● Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate. The Company evaluates its financial liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. Although the Company believes that the recorded fair value of our financial instruments is appropriate at December 31, 2019, these fair values may not be indicative of net realizable value or reflective of future fair values. There were no financial assets or liabilities carried at fair value as of December 31, 2018. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2019 | |
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 million 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 $5.65 million 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. Under the terms of the APA, MedoveX purchased certain assets and assumed certain liabilities of RMS. The assets of RMS reported on the MedoveX consolidated balance sheet as of December 31, 2018 that were excluded in the Merger on January 8, 2019 included the following: cash of approximately $70,000 convertible debt to a related party of approximately $4,300,000, interest payable of approximately $158,000, short-term notes, related party of approximately $180,000, accounts payable of approximately $398,000 and other current liabilities of approximately $285,000. Additionally, there were certain on-going litigation matters that were not assumed as part of the January 8, 2019 Merger. 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 24.5 million shares of common stock outstanding at a market capitalization of $9.8 million. The estimated fair value of the net assets of MedoveX was $8.4 million 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 is above the fair value of its net assets. The MedoveX net asset value is 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 estimated 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 (see Note 3). 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 (see Note 3). 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 Notes payable relate to promissory notes assumed by Acquiree in a 2015 acquisition, which was later divested in 2016, with the assumed promissory notes being retained by Acquiree. The Company finalized an eighteen-month extension on the notes extending the maturity date to March 1, 2021. Payments on both notes are due in aggregate monthly installments of approximately $5,800 and carry an interest rate of 5%. The promissory notes had outstanding balances of approximately $99,000 plus accrued interest of approximately $3,000 at January 8, 2019 (see Note 11) and promissory notes had outstanding balances of $78,000 as of December 31, 2019. In the third quarter of 2018, convertible notes were issued pursuant to a securities purchase agreement with select accredited investors, whereby the Acquiree offered up to 1,000,000 units (the “Units”) at a purchase price of $50,000 per Unit. Each Unit consisted 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 of Units, 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 are 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. As a result of the price adjustment feature, the conversion price of the convertible notes was adjusted to $0.36 per share. In the offering, the Acquiree sold an aggregate of 15 Units and issued to investors an aggregate of $750,000 in principal amount of convertible notes and 1,875,000 warrants to purchase common stock, resulting in total gross proceeds of $750,000 to the Company. If converted at $0.40 the convertible notes sold in the offering are convertible into an aggregate of 1,875,000 shares of common stock. The Acquiree recorded the proceeds from the notes and the accompanying warrants, which accrete over the period the notes are outstanding, on a relative fair value basis of approximately $505,000 and $245,000, respectively. At acquisition date, the value of the notes was approximately $598,000. Due to the notes maturing in 2019, the warrants have fully accreted as of December 31, 2019. The convertible notes had maturity dates between August and September 2019 and were renegotiated or repaid during the third and fourth quarters of 2019 (see Note 11). The following schedule represents the amount of revenue and net loss attributable to the MedoveX acquisition which have been included in the consolidated statements of operations for the periods subsequent to the acquisition date: For the Year Ended December 31, 2019 Revenues $ 67,631 Net loss attributable to MedoveX $ (4,754,680 ) The following unaudited pro forma financial information represents the consolidated financial information as if the acquisition had been included in the consolidated results beginning on the first day of the fiscal year prior to its acquisition date. The pro forma results have been calculated after adjusting the results of the acquired entity to remove any intercompany transactions and transaction costs incurred and to reflect any additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied on the first day of the fiscal year prior to its acquisition date, together with the consequential tax effects. The pro forma results do not reflect any cost savings, operating synergies, or revenue enhancements that the combined entities may achieve as a result of the acquisition; the costs to combine the companies’ operations; or the costs necessary to achieve these cost savings, operating synergies or revenue enhancements. The pro forma results do not necessarily reflect the actual results of operations of the combined companies under the current ownership and operation. For the Year Ended December 31, 2018 RMS MedoveX Pro Forma Revenues $ 7,883,115 $ 818,211 $ 8,701,326 Net loss (4,394,149 ) (4,908,644 ) (9,302,793 ) Net loss attributable to common shareholders (4,394,149 ) (5,477,873 ) (9,872,022 ) Loss per share- basic and diluted $ (0.13 ) $ (0.23 ) $ (0.17 ) |
Right-of-use Asset and Lease Li
Right-of-use Asset and Lease Liability | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Right-of-use Asset and Lease Liability | Note 5 – Right-of-use Asset And Lease Liability Upon adoption of ASU No. 2016-02 (as amended) (See Note 3), 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 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 years ended December 31, 2019 and 2018, respectively, are as follows: Year ended December 31, 2019 2018 Operating lease expense $ 579,770 $ 533,035 Cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2019 and 2018, respectively, are as follows: Year ended December 31, 2019 2018 Operating cash flows from operating leases (1) $ 579,770 $ - Supplemental balance sheet and other information related to operating leases are as follows (1): December 31, 2019 Operating leases: Operating leases right-of-use assets $ 738,453 Lease liability, current 453,734 Lease liability, net of current portion 302,175 Total operating lease liabilities $ 755,909 Weighted average remaining lease term 2.2 years Weighted average discount rate 7.75% (1) There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. Maturities of operating lease liabilities as of December 31, 2019 are as follows: Operating leases Operating leases: Due in one year or less $ 492,141 Due after one year through two years 154,559 Due after two years through three years 102,891 Due after three years through four years 69,333 Total lease payments 818,924 Less interest (63,015 ) Total $ 755,909 Operating lease expense and cash flows from operating leases for year ended December 31, 2019 totaled approximately $580,000 and are included in the “Other general and administrative” section of the audited 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. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 - Property and Equipment Property and equipment, net, consists of the following: Useful Life December 31, 2019 December 31, 2018 Furniture and fixtures 5-7 years $ 231,222 $ 149,285 Computers and software 3-7 years 244,039 278,234 Leasehold improvements 15 years 157,107 156,133 632,368 583,652 Less accumulated depreciation (412,665 ) (316,736 ) Total $ 219,703 $ 266,916 Depreciation expense was approximately $98,000 and $95,000, respectively, for the years ended December 31, 2019 and 2018. The Company uses the straight-line depreciation method to calculate depreciation expense. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
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 2019, total amortization expense related to acquisition-related intangible assets was $736,000 included in operating expense in the accompanying consolidated statement of operations. The Company decided to permanently suspend manufacture and sale of the DenerveX product for the foreseeable future, as it has been unsuccessful in its attempts to source cost effective alternative manufacturing and distributor options for the product. The Company has no future plans to commit any additional resources related to the future development or sales efforts for the product, as it has determined that the cost to relaunch the product back to market to be significant and indeterminable due to issues with the manufacturing and sterilization of the product. The DenerveX System no longer represents part of the Company’s core strategic plans for the future. The Company believes that it is more likely than not that the carrying value will not be recoverable. As a result, during the fourth quarter of 2019 the Company recorded a charge of $2,944,000 to impair the carrying value of the technology related intangible. This charge was recorded within the caption, “Loss on impairment” in the accompanying consolidated statements of operations. The Company’s goodwill balance was determined to be impaired as of the balance sheet date due to the adverse financial results for 2019, the negative projected cash results for 2020 and a significant decline in its market capitalization. The Company concluded that the fair value of the reporting unit was less than the carrying amount in excess of goodwill. As a result, during the fourth quarter of 2019 the Company recorded a $12,546,000 impairment charge, which is presented within the caption, “Loss on impairment” in the accompanying consolidated statements of operations. For the year ended December 31, 2018, the Company recognized approximately $607,000 in impairment loss related to the write-off of the capitalized costs for the design and development of an application to be sold on the iOS and Android store platforms. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
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 receives $10,000 per month for advisory services and $5,000 per quarter as Audit Committee Chair in addition to regular quarterly board meeting fees. This arrangement has no specified termination date. For year ended December 31, 2019 and 2018, the Company has expensed approximately $125,000, and $0 in compensation to Mr. Monteleone, respectively. 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. 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 year ended December 31, 2019, the Company expensed approximately $68,000 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 will provide information to key policymakers in the legislature and executive branches of government on the benefits of the cellular therapies offered by LHI, advocate for legislation that supports policies beneficial to patient access and oppose 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. For the year ended December 31, 2019, the Company expensed approximately $71,000. The Company terminated this agreement in March 2020. Board Members and Board Member Expenses In July 2019, the Board appointed Dr. Andre Terzic and Dr. Atta Behfar to the Board. On November 18, 2019, Dr. Andre Terzic and Dr. Atta Behfar resigned from the Company’s Board of Directors to avoid any potential conflicts that could arise from the Company’s Service Agreement with Rion. Drs. Terzic and Behfar are co-founders of Rion. For the year ended December 31, 2019, and December 31, 2018 the Company paid $5,000 and $0, respectively, each for Board of Director fees to Michael Yurkowsky and to Raymond Monteleone for a total of $10,000, and $0 respectively. Debt and Other Obligations The Company had various related party transactions in 2018. For the period of January 1, 2018 to March 13, 2018, the Company received approximately $528,000 from one of its shareholders (RMS members) and approximately $228,000 from its CEO (RMS CEO) as part of a line of credit that was established in 2017. On March 13, 2018, the entire $1,856,000 line of credit received from the RMS members and the CEO, including contributions from 2017, was transferred to the BioCell Capital, LLC debt instrument, (“BioCell Capital Line of Credit”). The BioCell Capital Line of Credit also consisted of capital contributions from related parties totaling approximately $4,306,000, inclusive of the aforementioned $1,856,000, to RMS in 2018. The BioCell Capital Line of Credit was converted to RMS members’ equity and was excluded from the APA on January 8, 2019. The Company also received a short-term advance from one of its shareholders (RMS members), who was also the CEO of H-CYTE, in the amount of $180,000 in December 2018 for working capital needs. This liability was not assumed in the Merger. The short-term notes, related party as of December 31, 2019 of $1,635,000 is comprised of four loans made to the Company during 2019, 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. A loan for $900,000 was made on July 25, 2019. This loan accrues interest at 5.5% and is due and payable upon demand of the creditor. A loan for $350,000 was made on September 26, 2019 with the following terms: ● 12% interest rate with a maturity date of March 26, 2020. ● The Company was unable to pay back the principal and interest by November 26, 2019; therefore, it issued to Lender a three-year warrant to purchase 400,000 shares of the Company’s common stock with a purchase price of $0.75 per share in accordance with the terms of the note. ● The Company was unable to pay back the loan on March 26, 2020, therefore, the interest rate increased to 15%. A loan for $150,000 was made on October 28, 2019 with the following terms: ● 12% interest rate with a maturity date of April 28, 2020. ● The Company was unable to pay back the principal and interest by December 28, 2019; therefore, it issued to Lender a three-year warrant to purchase 171,429 shares of the Company’s common stock with a purchase price of $0.75 per share in accordance with the terms of the note. ● If the Company is unable to pay the loan as of April 28, 2020, the interest rate increases to 15%. A loan for $235,000 was made on November 13, 2019 with the following terms: ● 12% interest rate with a maturity date of May 13, 2020. ● The Company was unable to pay back the principal and interest by January 13, 2020, therefore in January 2020 it issued to Lender a three-year warrant to purchase 268,571 shares of the Company’s common stock with a purchase price of $0.75 per share in accordance with the terms of the note. ● If the Company is unable to pay the loan as of May 13, 2020, the interest rate increases to 15%. In connection with the April Offering, Mr. Horne subordinated his notes to the April Secured Notes. |
Equity Transactions
Equity Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity Transactions | Note 9 - Equity Transactions For the consolidated statement of stockholders’ deficit as of December 31, 2018, 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 the beginning of the periods presented 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 (40) 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. Pursuant to this SPA, the Company initially offered a minimum of $1,000,000 and a maximum of $6,000,000 of Units, and subsequently increased the maximum amount to $8,000,000 (the “Maximum Amount”) of Units at a price of $50,000 per Unit until the earlier of (i) the closing of the subscription of the Maximum Amount and (ii) March 31, 2019 (the “Termination Date”), subject to the Company’s earlier termination at its discretion. The SPA includes the customary representations and warranties from the Company and purchasers. Mr. Gorlin, the Company’s former Chairman of the Board, converted a $200,000 promissory note owed to him by the Company in exchange for four (4) Units on the same terms as all other Purchasers. Mr. Gorlin subsequently converted the promissory note underlying the Units into an aggregate of 500,000 shares of common stock, eliminating the Company’s debt obligation. Each Convertible Note had an interest rate of 12% per annum, a principal amount of $50,000 maturity date of January 8, 2020, and are convertible into shares of common stock at a price of $0.40 subject to adjustment as provided for in the Convertible Note. Pursuant to the terms of the Convertible Note, each holder of the Convertible Note shall not own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of common stock issuable upon exercise of such Convertible Note. If defaulted, the penalty interest rate of the Convertible Note shall rise to 18% per annum. In addition, each Warrant is exercisable at a price of $0.75 per share (the “Exercise Price”), subject to adjustments stated therein. The holder of each Warrant may purchase the number of shares of common stock equal to the number of shares of common stock issuable upon conversion of each Convertible Note while the Warrant is exercisable. The Warrants have a term of three years and shall be exercised in cash or on a cashless basis as described in the Warrant agreement. All Convertible Notes were converted into an aggregate of 18,000,000 shares of common stock upon closing. 17,500,000 of these shares were issued for cash and 500,000 shares were issued for conversion of short-term debt. The issuance costs for this private placement were approximately $133,000. Additionally, in July 2019, the Company raised $100,000 by selling 200,000 shares of common stock at $0.50 per share in a separate private placement. The Company also issued the investors 100,000 warrants with an exercise price of $1.00 per share. For the year ended December 31, 2019, the Company sold a total of 17,700,000 shares of common stock through private placements for cash and another 500,000 shares for conversion of short-term debt. As reported on Form 8-K filings on January 25, 2019, February 8, 2019, March 15, 2019 and April 5, 2019, 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 that latest date, excluding the shares issued for conversion of short-term debt, discussed below. In July 2019, the Company raised $100,000 by selling 200,000 shares of common stock at $0.50 per share in a separate private placement which brought the total of raised from all these offerings to $7,100,000. 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. 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. 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. On April 25, 2019, the Company issued 4,225,634 shares of common stock valued at $0.40 per share to Mr. William E. Horne, the Company’s CEO, in a restricted stock award which was 100% vested when issued. The Company recognized approximately $1,690,000 of compensation expense during the year ended December 31, 2019 related to the restricted stock award. This restricted stock award was issued pursuant to his employment agreement with the Company, which stated that this restricted stock award (as well as the incentive stock options issued in the quarter ended March 31, 2019) would be fully vested if not issued within fifteen days of the Merger. Neither award was issued within that time frame and both awards became fully vested when issued. The aggregate number of shares of common stock from these two awards is 4,475,634 and was calculated based on 7% of the Company’s issued and outstanding common stock as of the closing of the Merger. During the year ended December 31, 2019, 715,279 shares were issued pursuant to conversions of 2,650 shares of Series B Convertible Preferred Stock and 50,367 shares for accrued dividends thereunder. 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. The Series B Warrants were adjusted to fair value on the date of the exchange with the change in fair value being recorded in earnings. The fair value of the common stock issued was $73,000 which approximated the fair value of the Series B Warrants exchanged. 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 90% of that conversion price, or $0.36. 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. The Company also repurchased 500 shares of Series B Preferred Stock for $50,000 plus accrued dividends. 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. Including the expense of approximately $1,690,000 related to the restricted stock award to the Company’s CEO and approximately $95,000 of compensation expense with respect to vested stock options, total stock-based compensation expense for the year ended December 31, 2019 was approximately $1,785,000. The recognition of the $1,690,000 in compensation expense was the result of the stock award being 100% vested upon issuance. This restricted stock award was issued pursuant to his employment agreement with the Company, which stated that this grant would be fully vested if not issued within fifteen days of the reverse merger transaction. The restricted stock award was not issued within that time frame and was fully vested when issued. Stock Option Activity For the year ended December 31, 2019, the Company recognized approximately $95,000, 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 year ended December 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 December 31, 2019, there were 3,750 shares of unvested stock options and unrecognized compensation expense totaled approximately $600. The remaining expense will be recognized as an expense on a straight-line basis over the remaining weighted average service period which is approximately 6.28 years. The following is a summary of stock option activity for the year ending December 31, 2019: Shares Weighted Average Exercise Price Weighted Average Remaining Term (Years) Outstanding at December 31, 2018 — $ — — Assumed with the Merger 557,282 $ 2.78 6.99 Other activity since January 8, 2019: Granted 250,000 $ 0.40 9.02 Cancelled (382,282 ) $ 2.86 — Outstanding at December 31, 2019 425,000 $ 1.38 7.71 Exercisable at December 31, 2019 421,250 $ 1.38 7.71 Non-Controlling Interest For the year-ended December 31, 2019 and 2018, 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 entities 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 years ended December 31, 2018 or 2019 related to the net income as it was $0 each month through the management fee charged by the Company. The only change in the non- controlling interest balance in 2018 was related to the acquisition of 100% interest of State in 2018; there was no change in non-controlling interest in 2019. |
Commitments & Contingencies
Commitments & Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | Note 10 – Commitments & Contingencies Biotechnology Agreement On June 21, 2019, the Company entered into a 10-year exclusive and extendable product supply agreement with Rion that will enhance its existing cytotherapy product line, developing a disruptive technology for COPD, the fourth leading cause of death in the U.S. Rion has established a unique exosome technology to harness the healing power of the body. Rion’s novel 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. With this agreement, Rion will serve as the product supplier and will co-develop a proprietary cellular platform with H-CYTE for the treatment of COPD. H-CYTE will control the commercial development and facilitate 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. On October 9, 2019, the Company entered into a services agreement with Rion, LLC 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. The description of services around the L-CYTE-01 product include research and development, process development, point of care GMP process, and investigational new drug (IND) generation for submission to the FDA. The total compensation under the agreement is $1,500,000. H-CYTE paid Rion $750,000 in November, 2019 per the agreement to start the services outlined which is recorded as a prepaid expense on the balance sheet as of December 31, 2019 as services did not begin until 2020. The remaining $750,000 is due and payable upon the achievement of certain milestones in the services agreement; at this time, the Company is not able to estimate when these milestones will occur. Regenerative Medical Equipment & Services Agreement On December 1, 2019, H-CYTE entered into an agreement with Alliance Health Services S.C. to provide specialized equipment and supplies, medical practices, procedures and protocols for regenerative medicine. Additionally, certain related training, educational development, compliance, marketing, supply chain management, and support services are provided. H-CYTE is to receive as compensation for these services for a monthly fee of $5,000. Alliance Health Services also agrees to purchase the supplies needed for the regenerative medicine protocols at cost provided to H-CYTE from its manufacturer plus $450 per treatment utilization. H-CYTE prorated the initial monthly fee from $5,000 to $3,333 which were recorded as accounts receivable as of December 31, 2019. Due to the coronavirus pandemic, this agreement was suspended indefinitely on March 23, 2020. Consulting Agreements The Company entered into an agreement with Jesse Crowne, a former Director and Co-Chairman of the Board of the Company, to provide business development consulting services for a fee of $5,000 per month. Additionally, 62,500 shares of common stock at $0.29 per share was issued in connection with a separate agreement on August 29, 2019. The Company incurred expense of approximately $83,000 for the year ended December 31, 2019 related to these agreements. Since these agreements 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 Company entered into a consulting agreement with LilyCon Investments, LLC effective February 1, 2019 for services related to evaluation and negotiation of future acquisitions, joint ventures, and site evaluations/lease considerations. The duration of the consulting agreement is for a period of twelve months in the amount of $12,500 per month with a $15,000 signing bonus. Either party may terminate this agreement with or without cause upon 30 days written notice. The agreement also provides LilyCon Investments with $35,000 in stock (to be calculated using an annual variable weighted average price from February 2019 through January 2020) to be granted on the one-year anniversary of this agreement, if the agreement has not been terminated prior to that date. For year ended December 31, 2019, the Company expensed a total of approximately $153,000 in compensation to LilyCon Investments. In February 2020, the Company issued LilyCon Investments $35,000 in shares of H-CYTE stock at an average share price of $0.31 per share for a total of 106,061 shares per the terms of the agreement. In March 2020, this agreement was modified to lower the monthly payment amount to $5,000. This agreement was terminated effective April 1, 2020. 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 receives $10,000 per month for advisory services and $5,000 per quarter as Audit Committee Chair in addition to regular quarterly board meeting fees. This arrangement has no specified termination date. For year ended December 31, 2019 and 2018, the Company has expensed approximately $125,000, and $0 in compensation to Mr. Monteleone, respectively. Effective March 25, 2020, the Company reduced the fees for the advisory services to $5,000 per month and the fees per quarter that Mr. Monteleone was to receive as the Audit Committee Chair to $2,500. 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 year ended December 31, 2019, the Company expensed approximately $68,000 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. The monthly fee started at $4,500 and increased to approximately $7,500 per month. Strategos will provide information to key policymakers in the legislature and executive branches of government on the benefits of the cellular therapies offered by the Lung Health Institute, advocate for legislation that supports policies beneficial to patient access and oppose 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. For the year ended December 31, 2019, the Company expensed approximately $71,000. The Company terminated this agreement in March 2020. The Company entered into a consulting agreement with Goldin Solutions, effective August 4, 2019, for media engagement and related efforts, including both proactive public relations and crisis management services. The agreement has a minimum term of six months, with a $34,650 monthly fee plus expenses payable each month, with the exception of a first month discount of $12,600. For year ended December 31, 2019, the Company expensed $162,000. The Company terminated this agreement in March 2020. Distribution center and logistic services agreement The Company has a non-exclusive distribution center agreement with a logistics service provider in Berlin, Germany pursuant to which they manage and coordinate the DenerveX System products which the Company exports to the EU through June 2020. The Company paid a fixed monthly fee of €4,500 (approximately $5,050 based on the EU exchange rate at December 31, 2019) for all accounting, customs declarations and office support, and a variable monthly fee ranging from €1,900 to €6,900 (approximately $2,300 to $8,300), based off volume of shipments, for logistics, warehousing and customer support services. Total expenses incurred for the distribution center and logistics agreement were approximately $49,000 for the year ended December 31, 2019. Since this agreement was assumed on January 8, 2019 as part of the reverse merger transaction, there were no historical costs related to this prior to January 8, 2019. Patent Assignment and Contribution Agreements The terms of a Contribution and Royalty Agreement dated January 31, 2013 with Dr. Scott Haufe, M.D was assumed in the Merger as of January 8, 2019. This agreement provides for the Company to pay Dr. Haufe royalties equal to 1% of revenues earned from sales of any and all products derived from the use of the DenerveX technology. Royalties are payable to Dr. Haufe within 30 days after the close of each calendar quarter based on actual cash collected from sales of applicable products. The royalty period expires on September 6, 2030. The Company incurred approximately $1,100 in royalty expense under the Contribution and Royalty agreement for the year ended December 31, 2019, all of which was included in accounts payable at December 31, 2019. Since this agreement was assumed on January 8, 2019 as part of the Merger, there were no historical costs related to this prior to January 8, 2019. Due to the discontinuance of the DenerveX product, no further expense from this agreement is expected. 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. 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 year ended December 31, 2019 and 2018, payments totaling approximately $141,000 and $119,000, respectively, were made to these physicians’ legal entities. Due to the ramifications of the coronavirus pandemic, the Company ceased 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 December 31, 2019. The Company is not aware of any legal action regarding this matter. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 11 –Debt 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. The convertible notes had maturity dates between August and September 2019. In November 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 recognized an additional $80,225 in penalties and late fees in relation to these notes for the year ended December 31, 2019. 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 for the year ending December 31, 2019. Additionally, approximately 424,000 warrants were issued in connection with the extension of the note. The fair market value of the warrants on September 18, 2019, the day the warrants were issued, was approximately $106,000, which the Company recognized as an expense for the year ending December 31, 2019. 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 $78,000 at December 31, 2019. The Company incurred interest expense related to the promissory notes for the year ended December 31, 2019 in the amount of approximately $2,000; no interest expense was incurred during 2018 as these notes were assumed on January 8, 2019. |
Derivative Liability- Warrants
Derivative Liability- Warrants and Redemption Put Liability | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability- Warrants and Redemption Put Liability | Note 12 – Derivative Liability- Warrants and Redemption Put Liability Financial assets and liabilities carried at fair value as of December 31, 2019 are classified in the table below in one of the three categories described in Note 3: 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 December 31, 2018 or 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 year ended December 31, 2019: Derivative Liability- Warrants January 8, 2019 - date of dilutive financing $ 1,215,678 Exchange for common stock (72,563 ) Fair value adjustments (827,260 ) Balance at December 31, 2019 $ 315,855 Redemption Put Liability November 15, 2019 - date of issuance $ 614,095 Fair value adjustments (346,696 ) Balance at December 31, 2019 $ 267,399 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, has been recorded as a derivative liability in the purchase price allocation. The derivative liability has been remeasured to fair value at the end of each reporting period and the cumulative change in fair value, approximately $827,000, has been recorded as a component of other income (expense) in the Company’s consolidated statement of operations for the year ended December 31, 2019. The fair value of the derivative liability included on the consolidated balance sheet was approximately $316,000 as of December 31, 2019. 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 the date they were accounted for as liabilities (assumed in Merger as of January 8, 2019) and December 31, 2019, respectively, using the following assumptions: January 8, 2019 December 31, 2019 Fair value of underlying stock $ 0.40 $ 0.13 Exercise price $ 0.40 $ 0.40 Risk free rate 2.57 % 1.58-1.59% Expected term (years) 3.00 1.34-2.02 Stock price volatility 115 % 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 the closing date of November 15, 2019 and December 31, 2019: November 15, 2019 December 31, 2019 Fair value of underlying stock $ 0.118 $ 0.056 Exercise price $ 0.20409 $ 0.20409 Risk free rate 1.84 % 1.92 % Expected term (in years) 10.0 9.9 Stock price volatility 90 % 92 % Expected dividend yield — — Likelihood of redemption 50 % 50 % 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 cumulative change in fair value, approximately $347,000, has been recorded as a component of other income (expense) in the Company’s consolidated statement of operations for year ended December 31, 2019. The fair value of the redemption put liability included on the consolidated balance sheet was approximately $267,000 as of December 31, 2019. |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock Warrants | |
Common Stock Warrants | Note 13 - Common Stock Warrants Fair value measurement valuation techniques, to the extent possible, should maximize the use of observable inputs and minimize the use of unobservable inputs. The Company’s fair value measurements of all warrants are designated as Level 1 since all of the significant inputs are observable and quoted prices used for volatility were available in an active market. A summary of the Company’s warrant issuance activity and related information for the year ended December 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 1.53 Exchanged (1,007,813 ) 0.40 — Expired (2,183,478 ) 2.73 — Issued 35,888,624 $ 0.73 5.36 Outstanding and exercisable at 12/31/19 44,806,076 0.78 4.59 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 issued at December 31, 2019 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 (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 | 12 Months Ended |
Dec. 31, 2019 | |
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”). The Shares were sold at a price of $40.817 per Share and each Share is convertible into 100 shares of Common Stock. Accordingly, the conversion price into common stock is $0.40817 per share. In connection with the FWHC Investment, the Company, FWHC and certain key holders entered into a Right of First Refusal and Co-Sale Agreement (the “RFRC Agreement”) which provides for certain rights with respect to the shares held by FWHC and the key holders. The key holders are identified in the RFRC Agreement and include the Company’s principal stockholder RMS Shareholder, LLC and the Company’s CEO, William E. Horne. The Company, FWHC and certain other holders of the Company’s voting stock entered into a Voting Agreement (“Voting Agreement”) with respect to the size and composition of the Company’s Board and certain other items if requested by FWHC. In connection the FWHC Investment, the Company and FWHC entered into an Investors’ Rights Agreement (the “IRA”) which provided FWHC with other additional rights including but not limited to, registration rights, board observer rights, and a right of first refusal for future offerings. The Series D Shares vote with the common shareholders on an if-converted basis and provide for cumulative dividends at 8% of the stated value, payable upon a liquidation or redemption. For any other dividends, the Series D Shares will participate with common stock on an as-converted basis. Each Series D Share is convertible into common shares at a conversion price of $100 per common share. The conversion price is subject to adjustment for anti-dilution protection and traditional equity restructuring and reorganizations. The Series D Shares will be mandatorily converted upon the earlier of 1) the written consent of holders of a majority of Series D shareholders and 2) the common stock is listed and quoted on one of the NASDAQ markets or the New York Stock Exchange as a result of a public offering at a price of at least $1.22451 per share and proceeds of at least $25 million. The Series D Shares also contain an embedded mandatory redemption provision which will occur at the earliest of: (a) 90 days following the date that William E. Horne is no longer serving as the Corporation’s CEO and a majority of the Series D holders do not approve of his replacement, (b) William E Horne transfers more than 25% of the stock owned by him to a person not related to him or a current shareholder or (c) the Company’s common stock is not listed on a NASDAQ market or the New York Stock Exchange within 30 months as a result of a public offering generating minimum net proceeds of at least $25 million (the “Trigger Date”). The redemption price to be paid is the greater of a) the Original Issue Price of $40.817, plus any accrued and unpaid dividends and (b) the fair market value of the Series D Shares on the redemption date. In lieu of redeeming the Series D Shares for cash, the holder may elect to receive “Trigger Event Warrants” equal to the number of shares of common stock the Series D Shares are convertible into on the Trigger Date. The Trigger Event Warrants will have a ten-year term from the date of redemption and allow the holders to purchase shares of common stock at a price equal to the lower of a) 0.50% of the Original Issue Price and b) the Series D conversion price on the Trigger Date. 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 inception and December 31, 2019, was approximately $614,000 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: October 18, 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. The Company recorded $60,493 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 $6,060,493 at December 31, 2019. 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 common stock. The Company accrues these dividends as they are earned each period. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 - Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, “Income Taxes”. Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the basis difference reverses. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income and the availability of tax planning strategies. The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. As of December 31, 2019, the Company has not incurred any interest or penalties relating to uncertain tax positions. For the years ended December 31, 2019 and 2018, the Company has incurred net losses and, therefore, has no current income tax liability and recognized no income tax expense. The net deferred tax asset generated by these losses, which principally consist of operating losses deferred for income tax purposes, is fully reserved as of December 31, 2019 and 2018 since it is more likely than not that the benefit will not be realized in future periods. A reconciliation of the statutory federal income tax expense (benefit) to the effective tax is as follows for the years ended December 31: 2019 2018 Statutory rate – federal 21.0 % 21.0 % Effect of: State income tax, net of federal benefit 3.0 5.0 State NOL true-up (2.0 ) - Goodwill impairment (9.0 ) - Other permanent differences - (1.0 ) Change in valuation allowances (13.0 ) (25.0 ) Income taxes 0.0 % 0.0 % The Company’s financial statements contain certain deferred tax assets which have arisen primarily as a result of losses incurred that are considered startup costs for tax purposes, as well as net deferred income tax assets resulting from other temporary differences related to certain reserves and differences between book and tax depreciation and amortization. The Company records a valuation allowance against our net deferred tax assets when we determine that based on the weight of available evidence, it is more likely than not that the net deferred tax assets will not be realized. Management of the Company evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and determined that it is more likely than not that the Company will not recognize the benefits of the deferred tax assets. As a result, a full valuation allowance was recorded as of December 31, 2019 and 2018. Deferred tax assets and liabilities consist of the following at December 31: 2019 2018 Deferred Tax Assets: Federal and state net operating loss carryforwards $ 7,302,375 $ 666,888 Capitalized start-up costs 2,483,736 154,791 Capitalized research and development costs 424,390 - Patents 57,907 - Share-based compensation 242,437 - Other 25,405 81,801 Total gross deferred tax assets 10,536,250 903,480 Valuation Allowance (10,536,250 ) (903,480 ) Net deferred tax assets $ — — The Company is required to file federal income tax returns and state income tax returns in the states of Florida, Georgia and Minnesota. There are no uncertain tax positions at December 31, 2019. The Company has not undergone any tax examinations since inception and is therefore not subject to examination by any applicable tax authorities. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | N ote 16 - Subsequent Events COVID-19 has adversely affected the Company’s financial condition and results of operations. The impact of the COVID-19 outbreak on the businesses and the economy in the U.S. and the rest of the world is, and is expected to continue to be, significant. The extent to which COVID-19 outbreak will impact business and the economy is highly uncertain and cannot be predicted. Accordingly, the Company cannot predict the extent to which its financial condition and results of operation will be affected. The Company recently has taken 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. This decision has put significant financial strain on the Company. 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 believes these expense reductions are necessary during the unexpected COVID-19 pandemic. Due to 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 fourth quarter 2019 revenue was approximately $1.8 million. The Company expects that the first quarter will be substantially less than the fourth quarter 2019 and future quarters’ revenue is dependent on the timing for 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. 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. In January 2020, the Company closed on an additional $100,000 in the Series D SPA. On March 27, 2020 and April 9, 2020, the Company issued a Note, each one in the principal amount of $500,000 to the Investor for a total of $1,000,000 in exchange for loans in such amount to cover working capital needs. Each Note bears simple interest at a rate of 8% 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. On April 17, 2020, the Company entered into a Secured Convertible Note and Warrant Purchase Agreement (the “April SPA”) with an aggregate of 32 investors (the “Purchaser(s)”) pursuant to which the Company received an aggregate of $2,812,445 in gross proceeds (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 an aggregate of $2,812,445 in Secured Convertible Promissory Notes (the “April Secured Notes’). The April Secured Notes bear interest at 12% per annum and have a maturity date of October 31, 2020. The April Secured Notes are secured by all of the Company’s assets pursuant to a security agreement and an intellectual Property Security Agreement which are included as Exhibits to this Annual report on Form 10-K. The conversion price of the April Secured Notes shall be equal to the lesser of (i) the price per share paid by an investor, in the Qualified Financing (as defined below) for such new securities and (ii) the price per share obtained by dividing (x) $3,000,000 by the number of fully diluted shares outstanding immediately prior to the Qualified Financing. Qualified Financing is defined as an offering of preferred stock of at least $3.6 million, exclusive of the conversion of any April Secured Note or the Backstop Commitment (as defined below), at a price of at least $0.01279 per share. The obligations on the April Secured Notes are guaranteed by each of the Company’s subsidiaries. FWHC Bridge, LLC, which is an affiliate of FWHC, who has acted as our lead investor in the last several financing transactions and was the lender of the $1,000,000 loaned to the Company in March and April, was the lead investor in the April Offering purchasing $1,535,570 of April Secured Notes. YPH Holdings, LLC, which is an affiliate of Michael Yurkowsky, who is a Director of the Company, purchased $25,000 of April Secured Notes on the same terms as all other investors. Each Purchaser received a warrant to purchase 100% of the aggregate number of shares of common stock into which such Purchaser’s April Secured Note may ultimately be converted, except that the holders of the Notes issued in March and April in the total amount of $1,000,000 received warrants to purchase up to 200% of the aggregate number of shares of Common stock into which such Note may ultimately be converted The April Warrants have an exercise price equal to the purchase price in the Qualified Offering. The April SPA provides a commitment on the part of each Purchaser to agree to invest an identical amount (as purchased in the April Offering) in the Qualified Offering as a backstop commitment (the “Backstop Commitment”). The Qualified Offering is contemplated to be made in the form of a rights offering to holders of all of the Company’s common stock. Accordingly, in the event that any stockholders do not participate in the Qualified Offering, their purchase would be filled by the Purchasers on a pro rata basis. In the event that any Purchaser fails to fulfil its Backstop Commitment then the April Warrants issued to such Purchaser in the April Offering will be cancelled. In connection with the April Offering, the Company’s CEO Bill 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 (i.e. $225,000 per annum. Mr. Horne also agreed to subordinate the promissory notes owed to him by the Company to the April Secured Notes. As part of the April Offering, the holders of certain existing warrants which contained anti- dilution price protection and other objectionable features that would have been triggered by the April Offering agreed to a one-time adjustment of their exercise price to $.015 per share and to gross up the number of warrants issuable. In consideration, the holders of such pre-existing warrants waived all future anti-dilution price protection. In addition, in connection with the April Offering, the Company entered into an amendment with the Investor for the remaining convertible notes which were originally issued in 2018 and assumed in the Merger. These notes have a principal amount of $424,615 as of December 31, 2019. The amendment provides that the conversion price of the notes will be equal to the purchase price in the Qualified Offering. The holder waived all future anti-dilution price protection. 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 First Amendment to Hawes Secured Convertible Promissory Note, are each qualified in their entirety by the full text of such agreements which are filed as Exhibits to this Annual Report on Form 10k. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation U.S. GAAP requires that a related entity be consolidated with a company when certain conditions exist. An entity is considered to be a VIE when it has equity investors who lack the characteristics of having a controlling financial interest, or its capital is insufficient to permit it to finance its activities without additional subordinated financial support. Consolidation of a VIE by the Parent would be required if it is determined that the Parent will absorb a majority of the VIE’s expected losses or residual returns if they occur, retain the power to direct or control the VIE’s activities, or both. The accompanying audited consolidated financial statements include the accounts of the Parent, its wholly owned subsidiaries, and its VIEs. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates In preparing the financial statements, U.S. GAAP requires disclosure regarding estimates and assumptions used by management that affect the amounts reported in financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash | Cash The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash balances at December 31, 2019 and 2018 consists of funds deposited in checking accounts with commercial banks. |
Accounts Receivable | Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. Trade accounts receivable are stated net of an estimate made for doubtful accounts, if any. Management evaluates the adequacy of the allowance for doubtful accounts regularly to determine if any account balances will potentially be uncollectible. Customer account balances are considered past due or delinquent based on the contractual agreement with each customer. Accounts are written off when, in management’s judgment, they are considered uncollectible. At December 31, 2019 and December 31, 2018, management believes no allowance is necessary. For the year ended December 31, 2019 and 2018, the Company recorded bad debt expense of approximately $90,000 and $3,000, respectively. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company reviews the values assigned to long-lived assets, including property and equipment and certain intangible assets, to determine whether events and circumstances have occurred which indicate that the remaining estimated useful lives may warrant revision or that the remaining balances may not be recoverable. The evaluation of asset impairment requires management to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment, and actual results may differ from estimated amounts. In such reviews, undiscounted cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required. For the year ended December 31, 2019 and 2018, the Company recognized an impairment charge of approximately $2,944,000 and $607,000, respectively, related to certain intangible assets (See Note 7). |
Goodwill | Goodwill Goodwill represents the excess of purchase price over fair value of net identified tangible and intangible assets and liabilities acquired. The Company does not amortize goodwill; it tests goodwill for impairment on at least an annual basis. An impairment loss, if any, is measured as the excess of the carrying value of the reporting unit over the fair value of the reporting unit. As of December 31, 2019, the Company performed a quantitative test and determined that the carrying value of the reporting unit exceeded the fair value. The Company’s goodwill balance was determined to be impaired as of the balance sheet date due to the adverse financial results for 2019, the negative projected cash results for 2020 and a significant decline in its market capitalization. As a result, we recorded a goodwill impairment charge of approximately $12,564,000 during the year ended December 31, 2019 (See Note 7). |
Leases | Leases In February 2016, the Financial Accounting Standard Board (“FASB”) established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02 (as amended), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company has not entered into significant lease agreements in which it is the lessor. For the lease agreements in which the Company is lessee, under Topic 842, lessees are required to recognize a lease liability and right-of-use asset for all leases (except for short-term leases) at the lease commencement date. Effective January 1, 2019, the Company adopted this guidance, applied the modified retrospective transition method and elected the transition option to use the effective date as the date of initial application. The Company recognized the cumulative effect of the transition adjustment on the consolidated balance sheet as of the effective date and did not provide any new lease disclosures for periods before the effective date. With respect to the practical expedients, the Company elected the package of transitional-related practical expedients and the practical expedient not to separate lease and non-lease components. |
Other Receivables | Other Receivables Other receivables totaling approximately $19,000 and $5,000 at December 31, 2019 and 2018, respectively include receivables from the non-acquired Lung Institute, LLC due to Lung Institute Tampa, LLC for approximately $10,000 and $0, and approximately $9,000 and $5,000 reimbursement receivable for expenses from RMS at December 31, 2019 and 2018, respectively. The $10,000 receivable was a result of the Lung Institute, LLC being a transitory entity for Lung Institute Tampa, LLC while the merchant services accounts are being transferred. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with U.S. GAAP as outlined in the FASB ASC 606, Revenue From Contracts with Customers The Company uses a standard pricing model for the types of cellular therapy treatments that is offered to its patients. The transaction price accounts for medical, surgical, facility, and office services rendered by the Company for consented procedures and is recorded as revenue. The Company recognizes revenue when the terms of a contract with a patient are satisfied. The Company offers two types of cellular therapy treatments to their patients. 1) The first type of treatment includes medical services rendered typically over a two-day period in which the patient receives cellular therapy. For this treatment type, revenue is recognized in full at time of service. 2) The Company also offers a four-day treatment in which medical services are rendered typically over a two-day period and then again, approximately three months later, medical services are rendered for an additional two days of treatment. Payment is collected in full for both service periods at the time the first treatment is rendered. Revenue is recognized when services are performed based on the estimated standalone selling price of each service. The Company has deferred recognition of revenue amounting to approximately $1,046,000 and $326,000 at December 31, 2019 and 2018, respectively. The Company’s policy is to not offer refunds to patients. However, in limited instances the Company may make exceptions to this policy for extenuating circumstances. These instances are evaluated on a case by case basis and may result in a patient refund. Management performed an analysis of its customer refund history for refunds issued related to prior year’s revenue. Management used the results of this historical refund analysis to record a reserve for anticipated future refunds related to recognized revenue. At December 31, 2019 and 2018, the estimated allowance for refunds was approximately $63,000 and $0, respectively and is recorded in a contra revenue account. |
Research and Development Costs | Research and development costs Research and development expenses are recorded in operating expenses in the period in which they are incurred. |
Advertising | Advertising Advertising costs are recorded in operating expenses in the period in which they are incurred. |
Stock-based Compensation | Stock-Based Compensation The Company maintains a stock option incentive plan and accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation |
Income Taxes | Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, “Income Taxes”. Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the difference turns around. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income and the availability of tax planning strategies. From inception to December 31, 2019, the Company has incurred net losses and, therefore, has no current income tax liability. The net deferred tax asset generated by these losses is fully reserved as of December 31, 2019 and 2018, respectively, since it is currently likely that the benefit will not be realized in future periods. As a result of the acquisition, the Company is required to file federal income tax returns and state income tax returns in the states of Arizona, Florida, Georgia, Minnesota, Pennsylvania, Tennessee, and Texas. There are no uncertain tax positions at December 31, 2019 or December 31, 2018. The Company has not undergone any tax examinations since inception. |
Net Loss Per Share | 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: 44,806,076 warrants and 425,000 common stock options outstanding were considered anti-dilutive and excluded for the year ending December 31, 2019. At December 31, 2019, 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 38,887,847 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. For the year ended December 31, 2018, there were no dilutive securities as the accounting acquirer did not historically have stock-based securities. |
Fair Value Measurements | Fair Value Measurements The Company measures certain non-financial assets, liabilities, and equity issuances at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets and non-amortizing intangible assets for impairment; allocating value to assets in an acquired asset group; and applying accounting for business combinations. The Company classified its stock warrants as either liability or equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity” (ASC 480) and ASC 815, “Derivatives and Hedging” (ASC 815), depending on the specific terms of the warrant agreement. The Series B Warrants included a down-round protection feature that would also result in the issuance of additional shares of stock, are classified as liabilities pursuant to ASC 815 and are initially and subsequently measured at their estimated fair values. The Company will continue to record liability-classified warrants at fair value until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. For additional discussion on the Series B Warrants, see Note 12. The Company classified a redemption provision in its Series D Preferred Stock as a derivative liability in accordance with ASC 815. The Company will continue to record the redemption provision as a “Redemption Put Liability” until the Series D is converted or redeemed. For additional discussion on the Redemption Put Liability, see Note 12. The Company uses the fair value measurement framework to value these assets and report the fair values in the periods in which they are recorded, adjusted above, or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: ● Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; ● Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data; and ● Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate. The Company evaluates its financial liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. Although the Company believes that the recorded fair value of our financial instruments is appropriate at December 31, 2019, these fair values may not be indicative of net realizable value or reflective of future fair values. There were no financial assets or liabilities carried at fair value as of December 31, 2018. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 |
Schedule of Revenue and Net Loss Attributable to Acquisition | The following schedule represents the amount of revenue and net loss attributable to the MedoveX acquisition which have been included in the consolidated statements of operations for the periods subsequent to the acquisition date: For the Year Ended December 31, 2019 Revenues $ 67,631 Net loss attributable to MedoveX $ (4,754,680 ) |
Schedule of Pro Forma Financial Information | The pro forma results do not necessarily reflect the actual results of operations of the combined companies under the current ownership and operation. For the Year Ended December 31, 2018 RMS MedoveX Pro Forma Revenues $ 7,883,115 $ 818,211 $ 8,701,326 Net loss (4,394,149 ) (4,908,644 ) (9,302,793 ) Net loss attributable to common shareholders (4,394,149 ) (5,477,873 ) (9,872,022 ) Loss per share- basic and diluted $ (0.13 ) $ (0.23 ) $ (0.17 ) |
Right-of-use Asset and Lease _2
Right-of-use Asset and Lease Liability (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense for the years ended December 31, 2019 and 2018, respectively, are as follows: Year ended December 31, 2019 2018 Operating lease expense $ 579,770 $ 533,035 |
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 years ended December 31, 2019 and 2018, respectively, are as follows: Year ended December 31, 2019 2018 Operating cash flows from operating leases (1) $ 579,770 $ - |
Schedule of Supplemental Balance Sheet and Other Information | Supplemental balance sheet and other information related to operating leases are as follows (1): December 31, 2019 Operating leases: Operating leases right-of-use assets $ 738,453 Lease liability, current 453,734 Lease liability, net of current portion 302,175 Total operating lease liabilities $ 755,909 Weighted average remaining lease term 2.2 years Weighted average discount rate 7.75% (1) There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. |
Schedule of Maturities of Lease Liabilities | Maturities of operating lease liabilities as of December 31, 2019 are as follows: Operating leases Operating leases: Due in one year or less $ 492,141 Due after one year through two years 154,559 Due after two years through three years 102,891 Due after three years through four years 69,333 Total lease payments 818,924 Less interest (63,015 ) Total $ 755,909 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consists of the following: Useful Life December 31, 2019 December 31, 2018 Furniture and fixtures 5-7 years $ 231,222 $ 149,285 Computers and software 3-7 years 244,039 278,234 Leasehold improvements 15 years 157,107 156,133 632,368 583,652 Less accumulated depreciation (412,665 ) (316,736 ) Total $ 219,703 $ 266,916 |
Equity Transactions (Tables)
Equity Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Stock Option Activity | The following is a summary of stock option activity for the year ending December 31, 2019: Shares Weighted Average Exercise Price Weighted Average Remaining Term (Years) Outstanding at December 31, 2018 — $ — — Assumed with the Merger 557,282 $ 2.78 6.99 Other activity since January 8, 2019: Granted 250,000 $ 0.40 9.02 Cancelled (382,282 ) $ 2.86 — Outstanding at December 31, 2019 425,000 $ 1.38 7.71 Exercisable at December 31, 2019 421,250 $ 1.38 7.71 |
Derivative Liability- Warrant_2
Derivative Liability- Warrants and Redemption Put Liability (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Derivative Liabilities at Fair Value | Financial assets and liabilities carried at fair value as of December 31, 2019 are classified in the table below in one of the three categories described in Note 2: 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 December 31, 2018 or 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 year ended December 31, 2019: Derivative Liability- Warrants January 8, 2019 - date of dilutive financing $ 1,215,678 Exchange for common stock (72,563 ) Fair value adjustments (827,260 ) Balance at December 31, 2019 $ 315,855 Redemption Put Liability November 15, 2019 - date of issuance $ 614,095 Fair value adjustments (346,696 ) Balance at December 31, 2019 $ 267,399 |
Redemption Liability [Member] | |
Schedule of Assumptions for Warrants | The Company estimated the fair value of the warrant derivative liability as of the date they were accounted for as liabilities (assumed in Merger as of January 8, 2019) and December 31, 2019, respectively, using the following assumptions: January 8, 2019 December 31, 2019 Fair value of underlying stock $ 0.40 $ 0.13 Exercise price $ 0.40 $ 0.40 Risk free rate 2.57 % 1.58-1.59% Expected term (years) 3.00 1.34-2.02 Stock price volatility 115 % 143-154% Expected dividend yield — — |
Derivative Liability- Warrants [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 the closing date of November 15, 2019 and December 31, 2019: November 15, 2019 December 31, 2019 Fair value of underlying stock $ 0.118 $ 0.056 Exercise price $ 0.20409 $ 0.20409 Risk free rate 1.84 % 1.92 % Expected term (in years) 10.0 9.9 Stock price volatility 90 % 92 % Expected dividend yield — — Likelihood of redemption 50 % 50 % |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Warrant Activity | A summary of the Company’s warrant issuance activity and related information for the year ended December 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 1.53 Exchanged (1,007,813 ) 0.40 — Expired (2,183,478 ) 2.73 — Issued 35,888,624 $ 0.73 5.36 Outstanding and exercisable at 12/31/19 44,806,076 0.78 4.59 |
Schedule of Assumptions for Warrants | The inputs used in the Black-Scholes valuation technique to value each of the warrants issued at December 31, 2019 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 (1) |
Mezzanine Equity and Series D_2
Mezzanine Equity and Series D Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: October 18, 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 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (benefit) | A reconciliation of the statutory federal income tax expense (benefit) to the effective tax is as follows for the years ended December 31: 2019 2018 Statutory rate – federal 21.0 % 21.0 % Effect of: State income tax, net of federal benefit 3.0 5.0 State NOL true-up (2.0 ) - Goodwill impairment (9.0 ) - Other permanent differences - (1.0 ) Change in valuation allowances (13.0 ) (25.0 ) Income taxes 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following at December 31: 2019 2018 Deferred Tax Assets: Federal and state net operating loss carryforwards $ 7,302,375 $ 666,888 Capitalized start-up costs 2,483,736 154,791 Capitalized research and development costs 424,390 - Patents 57,907 - Share-based compensation 242,437 - Other 25,405 81,801 Total gross deferred tax assets 10,536,250 903,480 Valuation Allowance (10,536,250 ) (903,480 ) Net deferred tax assets $ — — |
Description of the Company (Det
Description of the Company (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from product | $ 1,800,000 | $ 8,346,858 | $ 7,883,115 | |
Loss on impairment of intangible asset | $ (12,546,000) | 606,595 | ||
Written off inventory | $ 131,455 | |||
Employee layoff percentage | 40.00% | |||
Product Supply Agreement [Member] | Rion LLC [Member] | ||||
Agreement term | 10 years | |||
Loss on impairment of intangible asset | $ (2,944,000) | |||
Written off inventory | 131,000 | |||
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) | Apr. 17, 2020EUR (€)shares | Apr. 09, 2020USD ($) | Mar. 27, 2020USD ($) | Mar. 23, 2020 | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 17, 2020$ / shares | Apr. 17, 2020EUR (€) | Apr. 13, 2020USD ($) | Dec. 31, 2019EUR (€) |
Net loss | $ | $ (29,807,878) | $ (4,394,149) | ||||||||||
Employee layoff percentage | 40.00% | |||||||||||
Revenue | $ | $ 1,800,000 | 8,346,858 | 7,883,115 | |||||||||
Debt principal amount | € 424,615 | |||||||||||
Proceeds from notes | $ | 1,635,000 | 180,000 | ||||||||||
Proceeds from warrants | $ | 2,613,965 | |||||||||||
Cash on hand | $ | $ 1,424,096 | $ 1,424,096 | $ 1,424,096 | $ 69,628 | ||||||||
Subsequent Event [Member] | ||||||||||||
Employee layoff percentage | 40.00% | |||||||||||
Warrants exercise price per share | $ / shares | $ 0.015 | |||||||||||
Subsequent Event [Member] | Bill Horne [Member] | ||||||||||||
Salary reduction per month | € 0 | |||||||||||
Salary increase per month | 18,750 | |||||||||||
Salary per annum | 225,000 | |||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | ||||||||||||
Debt interest rate | 12.00% | |||||||||||
Proceeds from offering | € 2,812,445 | |||||||||||
Promissory notes, value | € 2,812,445 | |||||||||||
Promissory note, maturity date | Oct. 31, 2020 | |||||||||||
Number of fully diluted shares outstanding | shares | 3,000,000 | |||||||||||
Preferred stock, offering price | € 3,600,000 | |||||||||||
Debt conversion price per share | $ / shares | $ 0.01279 | |||||||||||
Percentage of warrants to purchase aggregate number of common shares | 200.00% | |||||||||||
Proceeds from warrants | € 1,000,000 | |||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | Michael Yurkowsky [Member] | ||||||||||||
Proceeds from notes | € 25,000 | |||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | FWHC Bridge,LLC [Member] | ||||||||||||
Promissory notes, value | € 1,535,570 | |||||||||||
Loan amount by lender | € 1,000,000 | |||||||||||
Percentage of warrants to purchase aggregate number of common shares | 100.00% | |||||||||||
Subsequent Event [Member] | Note [Member] | Investor [Member] | ||||||||||||
Debt principal amount | $ | $ 500,000 | $ 500,000 | ||||||||||
Total amount in exchange for loans | $ | $ 1,000,000 | $ 1,000,000 | ||||||||||
Debt interest rate | 8.00% | 8.00% | ||||||||||
Cash on hand | $ | ||||||||||||
Subsequent Event [Member] | Demand Note [Member] | FWHC Bridge,LLC [Member] | ||||||||||||
Cash on hand | $ | $ 585,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for doubtful accounts | |||
Bad debt expenses | 90,137 | ||
Impairment charge | 2,944,000 | 2,944,000 | 607,000 |
Goodwill impairment charge | 12,564,000 | 12,564,000 | |
Other receivables | 18,673 | 18,673 | 5,144 |
Deferred revenue recognition | 1,046,156 | 1,046,156 | 326,064 |
Allowance for refunds | 63,000 | 63,000 | 0 |
Uncertain tax positions | |||
Anti-dilutive securities shares outastanding | |||
Lung Institute, LLC [Member] | |||
Other receivables | 10,000 | 10,000 | $ 0 |
Reimbursement receivable | $ 9,000 | $ 9,000 | $ 5,000 |
Warrant [Member] | |||
Anti-dilutive securities shares outastanding | 44,806,076 | ||
Common Stock Options [Member] | |||
Anti-dilutive securities shares outastanding | 425,000 | ||
Series B and Series D Preferred Stock [Member] | |||
Anti-dilutive securities shares outastanding | 38,887,847 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) | Feb. 06, 2019$ / sharesshares | Jan. 08, 2019USD ($)shares | Feb. 28, 2019shares | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 30, 2018$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2019EUR (€)shares | Nov. 30, 2019USD ($) |
Number of shares issued for acquisition, value | |||||||||
Percentage of voting interest acquired | 55.00% | ||||||||
Shares issued during period, value | $ 4,419,787 | ||||||||
Cash excluded from purchase | $ 302,710 | ||||||||
Interest payable | 755,216 | ||||||||
Accounts payable | 1,645,399 | ||||||||
Market capitalization | 10,811,908 | ||||||||
Impairment charge | $ 2,944,000 | 2,944,000 | $ 607,000 | ||||||
Goodwill impairment charge | $ 12,564,000 | $ 12,564,000 | |||||||
Debt outstanding balance | € | € 424,615 | ||||||||
Common stock, par value | $ / shares | $ .001 | $ .001 | $ .001 | ||||||
Number of shares issued on conversion | shares | 250,000 | ||||||||
Proceeds from notes | $ 1,635,000 | $ 180,000 | |||||||
Proceeds from warrants | $ 2,613,965 | ||||||||
Promissory Note [Member] | |||||||||
Debt maturity date | Mar. 1, 2021 | ||||||||
Aggregate monthly installments amount | $ 5,800 | ||||||||
Debt interest rate | 5.00% | 5.00% | 5.00% | ||||||
Notes payable | 99,000 | ||||||||
Accrued interest | $ 3,000 | ||||||||
Debt outstanding balance | $ 78,000 | $ 78,000 | |||||||
Convertible Notes [Member] | |||||||||
Debt maturity date | Sep. 30, 2020 | ||||||||
Notes payable | $ 350,000 | ||||||||
Debt conversion price per share | $ / shares | $ 0.36 | $ 0.36 | $ 0.36 | ||||||
Number of shares issued on conversion | shares | 251,667 | 1,875,000 | |||||||
Series C Preferred Stock [Member] | |||||||||
Number of additional exchange shares issued | shares | 17,264 | ||||||||
RMS [Member] | |||||||||
Common stock, par value | $ / shares | $ 33,700 | $ 33,700 | |||||||
RMS [Member] | Series C Preferred Stock [Member] | |||||||||
Number of shares issued for acquisition | shares | 33,661 | ||||||||
Asset Purchase Agreement [Member] | |||||||||
Common stock, shares outstanding | shares | 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 | shares | 33,661 | ||||||||
Number of additional shares issued | shares | 6,111 | ||||||||
Number of shares issued for acquisition, value | $ 2,000,000 | ||||||||
Number of shares converted | shares | 1,000 | ||||||||
Percentage of voting interest acquired | 55.00% | ||||||||
Shares issued during period, value | $ 5,650,000 | ||||||||
Number of additional exchange shares issued | shares | 17,264 | ||||||||
Cash excluded from purchase | $ 70,000 | ||||||||
Convertible debt to a related party | 4,300,000 | ||||||||
Interest payable | 158,000 | ||||||||
Short-term notes, related party | 180,000 | ||||||||
Accounts payable | 398,000 | ||||||||
Other current liabilities | $ 285,000 | ||||||||
Asset Purchase Agreement [Member] | RMS [Member] | Series C Preferred Stock [Member] | |||||||||
Number of shares issued for acquisition | shares | 39,772 | ||||||||
Number of additional shares issued | shares | 11,153 | ||||||||
Number of shares converted | shares | 17,263,889 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Debt outstanding balance | $ 750,000 | $ 750,000 | |||||||
Number of unites issued | shares | 15 | ||||||||
Debt conversion price per share | $ / shares | $ 0.40 | $ 0.40 | |||||||
Proceeds from sale of convertible note and equity | $ 750,000 | ||||||||
Warrants to purchase common stock | shares | 1,875,000 | 1,875,000 | 1,875,000 | ||||||
Number of shares issued on conversion | shares | 1,875,000 | ||||||||
Proceeds from notes | $ 505,424 | ||||||||
Proceeds from warrants | 244,576 | ||||||||
Fair value of notes payable | $ 598,000 | $ 598,000 | |||||||
Securities Purchase Agreement [Member] | Convertible Notes [Member] | |||||||||
Debt interest rate | 12.00% | ||||||||
Number of unites issued | shares | 1,000,000 | ||||||||
Purchase price per unit | $ / shares | $ 50,000 | ||||||||
Debt conversion description | Each Unit consisted 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 of Units, 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 are 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. As a result of the price adjustment feature, the conversion price of the convertible notes was adjusted to $0.36 per share. The convertible notes had maturity dates between August and September 2019 totaling $650,000 (see Note 11). | ||||||||
Common stock, par value | $ / shares | $ 0.001 | ||||||||
Debt conversion price per share | $ / shares | $ 0.40 | ||||||||
Warrants term | 3 years | ||||||||
Warrants exercise price, per share | $ / shares | $ 0.75 | ||||||||
Conversion price description | As a result of the price adjustment feature, the conversion price of the convertible notes was adjusted to $0.36 per share. |
Business Acquisition - Schedule
Business Acquisition - Schedule of Fair Value of Consideration Transferred (Details) | Jan. 08, 2019USD ($)$ / 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 |
Convertible Notes [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 |
Business Acquisition - Schedu_4
Business Acquisition - Schedule of Revenue and Net Loss Attributable to Acquisition (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 1,800,000 | $ 8,346,858 | $ 7,883,115 |
Net loss attributable to MedoveX | (29,807,878) | $ (4,394,149) | |
Medovex Corp [Member] | |||
Revenues | 67,631 | ||
Net loss attributable to MedoveX | $ (4,754,680) |
Business Acquisition - Schedu_5
Business Acquisition - Schedule of Pro Forma Financial Information (Details) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / shares | |
Revenues | $ 8,701,326 |
Net loss | (9,302,793) |
Net loss attributable to common shareholders | $ (9,872,022) |
Loss per share- basic and diluted | $ / shares | $ (0.17) |
RMS [Member] | |
Revenues | $ 7,883,115 |
Net loss | (4,394,149) |
Net loss attributable to common shareholders | $ (4,394,149) |
Loss per share- basic and diluted | $ / shares | $ (0.13) |
Medovex Corp [Member] | |
Revenues | $ 818,211 |
Net loss | (4,908,644) |
Net loss attributable to common shareholders | $ (5,477,873) |
Loss per share- basic and diluted | $ / shares | $ (0.23) |
Right-of-use Asset and Lease _3
Right-of-use Asset and Lease Liability (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2019 | |||
Current lease liabilities | $ 453,734 | [1] | |||
Long-term lease liabilities | 302,175 | [1] | |||
Rou assets | 738,453 | [1] | |||
Operating lease expense | [1] | $ 579,770 | |||
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 | ||||
[1] | There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. |
Right-of-use Asset and Lease _4
Right-of-use Asset and Lease Liability - Schedule of Components of Lease Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Operating lease expense | $ 579,770 | $ 533,035 |
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 ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Leases [Abstract] | |||
Operating cash flows from operating leases | [1] | $ 579,770 | |
[1] | There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. |
Right-of-use Asset and Lease _6
Right-of-use Asset and Lease Liability - Schedule of Supplemental Balance Sheet and Other Information (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | ||
Leases [Abstract] | ||||
Operating leases: Operating leases right-of-use assets | $ 738,453 | [1] | ||
Operating leases: Lease liability, current | 453,734 | [1] | ||
Operating leases: Lease liability, net of current portion | 302,175 | [1] | ||
Total operating lease liabilities | [1] | $ 755,909 | ||
Weighted average remaining lease term | [1] | 2 years 2 months 12 days | ||
Weighted average discount rate | [1] | 7.75% | ||
[1] | There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. |
Right-of-use Asset and Lease _7
Right-of-use Asset and Lease Liability - Schedule of Maturities of Lease Liabilities (Details) | Dec. 31, 2019USD ($) | |
Leases [Abstract] | ||
Operating leases: Due in one year or less | $ 492,141 | |
Operating leases: Due after one year through two years | 154,559 | |
Operating leases: Due after two years through three years | 102,891 | |
Operating leases: Due after three years through four years | 69,333 | |
Operating leases: Total lease payments | 818,924 | |
Operating leases: Less interest | (63,015) | |
Total | $ 755,909 | [1] |
[1] | There is no comparable information for operating leases at or for the year ended December 31, 2018 since the Company adopted ASU No. 2016-02 on January 1, 2019 and elected to recognize operating lease right-of-use assets and operating lease liabilities at the adoption date. |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 98,000 | $ 95,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment | $ 632,368 | $ 583,652 |
Less accumulated depreciation | (412,665) | (316,736) |
Property and Equipment, net | 219,703 | 266,916 |
Furniture and Fixtures [Member] | ||
Property and equipment | $ 231,222 | 149,285 |
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 | 278,234 |
Computers and Software [Member] | Minimum [Member] | ||
Useful Life | 3 years | |
Computers and Software [Member] | Maximum [Member] | ||
Useful Life | 7 years | |
Leasehold Improvements [Member] | ||
Property and equipment | $ 157,107 | $ 156,133 |
Useful Life | 15 years |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated amortization | $ 736,000 | |
Non-cash charge of impair the carrying value oftechnology related intangible | 2,944,000 | |
Loss on impairment | $ 12,546,000 | $ (606,595) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 25, 2020 | Nov. 13, 2019 | Oct. 28, 2019 | Sep. 26, 2019 | Feb. 15, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Mar. 13, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 17, 2020 | Nov. 26, 2019 | Jul. 25, 2019 |
Short term note received amount | $ 180,000 | ||||||||||||
Loan One [Member] | |||||||||||||
Loans payable | $ 900,000 | ||||||||||||
Debt, interest rate | 5.50% | ||||||||||||
Loan Two [Member] | |||||||||||||
Advance was repaid | $ 350,000 | ||||||||||||
Debt, interest rate | 12.00% | ||||||||||||
Debt, maturity date | Mar. 26, 2020 | ||||||||||||
Increase in interest rate | 15.00% | ||||||||||||
Loan Three [Member] | |||||||||||||
Advance was repaid | $ 150,000 | ||||||||||||
Debt, interest rate | 12.00% | ||||||||||||
Debt, maturity date | Apr. 28, 2020 | ||||||||||||
Increase in interest rate | 15.00% | ||||||||||||
Loan Four [Member] | |||||||||||||
Advance was repaid | $ 235,000 | ||||||||||||
Debt, interest rate | 12.00% | ||||||||||||
Debt, maturity date | May 13, 2020 | ||||||||||||
Increase in interest rate | 15.00% | ||||||||||||
Michael Yurkowsky [Member] | |||||||||||||
Officers compensation | $ 5,000 | $ 0 | |||||||||||
Mr.Raymond Monteleone [Member] | |||||||||||||
Officers compensation | 5,000 | 0 | |||||||||||
Michael Yurkowsky and Raymond Monteleone [Member] | |||||||||||||
Officers compensation | 10,000 | 0 | |||||||||||
Shareholders [Member] | |||||||||||||
Amount received from related party | $ 528,000 | ||||||||||||
BioCell Capital Line of Credit [Member] | |||||||||||||
Related party contributions amount | 4,306,000 | ||||||||||||
Aforementioned amount | $ 1,856,000 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Warrants exercise price, per share | $ 0.015 | ||||||||||||
Mr.Raymond Monteleone [Member] | |||||||||||||
Compensation expenses | 125,000 | $ 0 | |||||||||||
CEO [Member] | |||||||||||||
Amount received from related party | 228,000 | ||||||||||||
Line of credit | $ 1,856,000 | ||||||||||||
CEO [Member] | Horne Management, LLC [Member] | Four Loans [Member] | |||||||||||||
Notes payable related party | 1,635,000 | ||||||||||||
Lender [Member] | Loan Two [Member] | |||||||||||||
Warrants term | 3 years | ||||||||||||
Warrants to purchase common stock | 400,000 | ||||||||||||
Warrants exercise price, per share | $ 0.75 | ||||||||||||
Lender [Member] | Loan Three [Member] | |||||||||||||
Warrants term | 3 years | ||||||||||||
Warrants to purchase common stock | 171,429 | ||||||||||||
Warrants exercise price, per share | $ 0.75 | ||||||||||||
Lender [Member] | Loan Four [Member] | |||||||||||||
Warrants term | 3 years | ||||||||||||
Warrants to purchase common stock | 268,571 | ||||||||||||
Warrants exercise price, per share | $ 0.75 | ||||||||||||
Oral Consulting Agreement [Member] | Subsequent Event [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 | $ 68,000 | ||||||||||||
Consulting Agreement [Member] | Strategos Public Affairs, LLC [Member] | |||||||||||||
Audit fees | $ 4,500 | 7,500 | |||||||||||
Compensation expenses | 71,000 | ||||||||||||
Monthly fee | $ 4,500 | $ 7,500 |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) | Apr. 25, 2019USD ($)$ / sharesshares | Feb. 06, 2019USD ($)$ / sharesshares | Jan. 08, 2019USD ($)$ / sharesshares | Aug. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Feb. 28, 2019shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2019EUR (€)shares | Apr. 05, 2019USD ($) | Mar. 15, 2019USD ($) | Feb. 08, 2019USD ($) | Jan. 25, 2019USD ($) |
Common stock, par value | $ / shares | $ .001 | $ .001 | ||||||||||||
Additional paid-in capital | $ 28,172,146 | $ 3,566,339 | ||||||||||||
Accumulated deficit | (37,362,531) | (9,296,408) | ||||||||||||
Non-controlling interest | (370,132) | (370,132) | ||||||||||||
Debt instrument face amount | € | € 424,615 | |||||||||||||
Debt instrument converted shares | shares | 250,000 | |||||||||||||
Shares issued during period, value | 4,419,787 | |||||||||||||
Number of shares issued for consulting fees | shares | 130,085 | |||||||||||||
Number of shares issued for consulting fees, value | $ 52,033 | |||||||||||||
Shares issued price per share | $ / shares | $ 0.40 | |||||||||||||
Value of shares issued for services | 95,533 | |||||||||||||
Total expense in compensation | 1,785,082 | |||||||||||||
Non-Controlling Interest [Member] | ||||||||||||||
Acquisition percentage related to non-controlling interest | 100.00% | |||||||||||||
Stock Option [Member] | ||||||||||||||
Compensation expense | $ 95,000 | |||||||||||||
Common stock awarded | shares | 250,000 | |||||||||||||
Number of options to purchase shares of common stock | shares | 250,000 | |||||||||||||
Unvested stock options | shares | 3,750 | 3,750 | ||||||||||||
Unrecognized compensation cost | $ 600 | |||||||||||||
Weighted average service period | 6 years 3 months 11 days | |||||||||||||
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 | $ / shares | $ 0.29 | |||||||||||||
Number of shares issued for services | shares | 150,000 | |||||||||||||
Value of shares issued for services | $ 43,500 | |||||||||||||
CEO [Member] | Restricted Stock Award [Member] | ||||||||||||||
Compensation expense | $ 95,000 | |||||||||||||
Vested percentage | 100.00% | |||||||||||||
Total expense in compensation | $ 1,785,000 | |||||||||||||
Related to vested amount | 1,690,000 | |||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||
Debt instrument face amount | $ 750,000 | |||||||||||||
Debt instrument converted shares | shares | 1,875,000 | |||||||||||||
Debt conversion price per share | $ / shares | $ 0.40 | |||||||||||||
Number of common stock shares sold | shares | 15 | |||||||||||||
Warrants to purchase common stock | shares | 1,875,000 | 1,875,000 | ||||||||||||
Fair value of notes payable | $ 598,000 | |||||||||||||
Securities Purchase Agreement [Member] | Convertible Note [Member] | ||||||||||||||
Debt instrument face amount | $ 50,000 | |||||||||||||
Cancellation of debt | $ 100,000 | |||||||||||||
Debt instrument converted value | $ 100,000 | |||||||||||||
Debt instrument converted shares | shares | 250,000 | 18,000,000 | ||||||||||||
Debt interest rate | 12.00% | |||||||||||||
Debt, maturity date | Jan. 8, 2020 | |||||||||||||
Debt conversion price per share | $ / shares | $ 0.40 | $ 0.40 | ||||||||||||
Penalty interest rate | 18.00% | |||||||||||||
Warrants exercise price, per share | $ / shares | $ 0.75 | |||||||||||||
Warrant term | 3 years | |||||||||||||
Percentage for common stock outstanding | 4.99% | |||||||||||||
Number of shares issued | shares | 17,500,000 | |||||||||||||
Debt issuance cost | $ 133,000 | |||||||||||||
Securities Purchase Agreement [Member] | Short-Term Debt [Member] | ||||||||||||||
Debt instrument converted shares | shares | 500,000 | |||||||||||||
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 | |||||||||||||
Number of units exchanged | shares | 40 | |||||||||||||
Purchase price per share | $ / shares | $ 0.075 | |||||||||||||
Proceeds from initially offering | $ 8,000,000 | |||||||||||||
Securities Purchase Agreement [Member] | Four Purchasers [Member] | Minimum [Member] | ||||||||||||||
Proceeds from initially offering | 1,000,000 | |||||||||||||
Securities Purchase Agreement [Member] | Four Purchasers [Member] | Maximum [Member] | ||||||||||||||
Proceeds from initially offering | 6,000,000 | |||||||||||||
Securities Purchase Agreement [Member] | Four Purchasers [Member] | Convertible Note [Member] | ||||||||||||||
Debt instrument face amount | $ 50,000 | |||||||||||||
Purchase price per share | $ / shares | $ 50,000 | |||||||||||||
Securities Purchase Agreement [Member] | Former Chairman [Member] | ||||||||||||||
Number of units exchanged | shares | 4 | |||||||||||||
Debt instrument converted value | $ 200,000 | |||||||||||||
Securities Purchase Agreement [Member] | Mr.Gorlin [Member] | ||||||||||||||
Debt instrument converted shares | shares | 500,000 | |||||||||||||
Securities Purchase Agreement [Member] | Investors [Member] | ||||||||||||||
Warrants exercise price, per share | $ / shares | $ 1 | |||||||||||||
Warrants to purchase common stock | shares | 100,000 | |||||||||||||
Securities Purchase Agreement [Member] | Additional Purchasers [Member] | ||||||||||||||
Aggregate amount of capital raised | $ 7,000,000 | $ 7,000,000 | $ 7,000,000 | $ 7,000,000 | ||||||||||
Employment Agreement [Member] | Mr. William Horne [Member] | ||||||||||||||
Shares issued during period, value | $ 4,225,634 | |||||||||||||
Shares issued price per share | $ / shares | $ 0.40 | |||||||||||||
Compensation expense | $ 1,690,000 | |||||||||||||
Vested percentage | 100.00% | |||||||||||||
Common stock awarded | shares | 4,475,634 | |||||||||||||
Percentage for common stock outstanding | 7.00% | |||||||||||||
Number of options to purchase shares of common stock | shares | 4,475,634 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Number of shares converted | shares | 17,263,889 | |||||||||||||
Shares issued during period, value | $ 17,700 | |||||||||||||
Number of shares issued for services | shares | 280,085 | |||||||||||||
Value of shares issued for services | $ 280 | |||||||||||||
Number of shares issued | shares | 17,700,000 | |||||||||||||
Private Placement [Member] | Securities Purchase Agreement [Member] | ||||||||||||||
Debt instrument converted shares | shares | 500,000 | |||||||||||||
Aggregate amount of capital raised | $ 7,100,000 | |||||||||||||
Value of common stock shares sold | $ 100,000 | |||||||||||||
Number of common stock shares sold | shares | 200,000 | 17,700,000 | ||||||||||||
Sale of stock, price per share | $ / shares | $ 0.50 | |||||||||||||
Series B Warrant Holders [Member] | ||||||||||||||
Shares issued during period, value | $ 73,000 | |||||||||||||
Shares issued price per share | $ / shares | $ 0.40 | |||||||||||||
Number of shares issued | shares | 403,125 | |||||||||||||
Warrants to purchase common stock | shares | 1,007,813 | 1,007,813 | ||||||||||||
Fair value of warrants | $ 75,000 | |||||||||||||
Warrant [Member] | Securities Purchase Agreement [Member] | ||||||||||||||
Debt conversion price per share | $ / shares | $ 0.40 | |||||||||||||
Warrant [Member] | Securities Purchase Agreement [Member] | 90% of the Conversion Price [Member] | ||||||||||||||
Debt conversion price per share | $ / shares | $ 0.36 | |||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||
Number of additional exchange shares issued | shares | 17,264 | |||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||
Number of shares converted | shares | 715,279 | |||||||||||||
Value of converted shares | $ 2,650 | |||||||||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||
Series B Convertible Preferred Stock [Member] | Accrued Dividends [Member] | ||||||||||||||
Number of shares converted | shares | 50,367 | |||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||
Number of shares converted | shares | 715,279 | |||||||||||||
Number of common stock shares sold | shares | 9,250 | |||||||||||||
Beneficial conversion feature | $ 33,000 | |||||||||||||
Preferred stock, par value | $ / shares | $ 0.001 | |||||||||||||
Number of shares repurchased | shares | 500 | |||||||||||||
Accrued dividends | $ 50,000 | |||||||||||||
Series B Preferred Stock [Member] | Accrued Dividends [Member] | ||||||||||||||
Number of shares converted | shares | 2,650 | |||||||||||||
RMS [Member] | ||||||||||||||
Common stock, par value | $ / shares | $ 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 | shares | 33,661,000 | |||||||||||||
RMS [Member] | Series C Preferred Stock [Member] | ||||||||||||||
Number of shares issued for acquisition | shares | 33,661 |
Equity Transactions - Summary o
Equity Transactions - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Equity [Abstract] | |
Number of Shares Options Outstanding Beginning Balance | shares | |
Number of Shares Options, Assumed with merger transaction | shares | 557,282 |
Number of Options Granted | shares | 250,000 |
Number of Options Cancelled | shares | (382,282) |
Number of Shares Options Outstanding Ending Balance | shares | 425,000 |
Number of Shares Options Exercisable | shares | 421,250 |
Weighted Average Exercise Price Outstanding Beginning Balance | $ / shares | |
Weighted Average Exercise Price, Assumed with merger transaction | $ / shares | 2.78 |
Weighted Average Exercise Price Granted | $ / shares | 0.40 |
Weighted Average Exercise Price Cancelled | $ / shares | 2.86 |
Weighted Average Exercise Price Outstanding Ending Balance | $ / shares | 1.38 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 1.38 |
Weighted Average Remaining Term (years) Outstanding, Beginning | 0 years |
Weighted Average Remaining Term (years) Assumed with merger transaction | 6 years 11 months 26 days |
Weighted Average Remaining Term (years) Outstanding, Granted | 9 years 7 days |
Weighted Average Remaining Term (years) Outstanding, Ending | 7 years 8 months 16 days |
Weighted Average Remaining Term (years) Exercisable | 7 years 8 months 16 days |
Commitments & Contingencies (De
Commitments & Contingencies (Details Narrative) | Mar. 31, 2020USD ($) | Mar. 25, 2020USD ($) | Feb. 29, 2020$ / sharesshares | Dec. 02, 2019USD ($) | Oct. 09, 2019USD ($) | Aug. 29, 2019USD ($)$ / sharesshares | Feb. 15, 2019USD ($) | Feb. 02, 2019USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Nov. 30, 2019USD ($) | Mar. 31, 2019$ / shares |
Prepaid expenses | $ 810,143 | $ 59,678 | ||||||||||||
Due to related parties | 1,635,000 | 180,000 | ||||||||||||
Stock per share | $ / shares | $ 0.40 | |||||||||||||
Guarantor obligations | 141,000 | 119,000 | ||||||||||||
Mr.Raymond Monteleone [Member] | ||||||||||||||
Compensation expenses | 125,000 | 0 | ||||||||||||
Services Agreement [Member] | Rion, LLC [Member] | ||||||||||||||
Compensation expenses | $ 1,500,000 | |||||||||||||
Prepaid expenses | $ 750,000 | |||||||||||||
Due to related parties | $ 750,000 | |||||||||||||
Regenerative Medical Equipment and Services Agreement [Member] | Alliance Health Services [Member] | ||||||||||||||
Monthly fees | $ 5,000 | |||||||||||||
Treatment utilization | $ 450 | |||||||||||||
Regenerative Medical Equipment and Services Agreement [Member] | Alliance Health Services [Member] | Maximum [Member] | Accounts Receivable [Member] | ||||||||||||||
Monthly fees | 5,000 | |||||||||||||
Regenerative Medical Equipment and Services Agreement [Member] | Alliance Health Services [Member] | Minimum [Member] | Accounts Receivable [Member] | ||||||||||||||
Monthly fees | 3,333 | |||||||||||||
Consulting Agreements [Member] | ||||||||||||||
Number of shares issued | shares | 62,500 | |||||||||||||
Stock per share | $ / shares | $ 0.29 | |||||||||||||
Total incurred expense | $ 83,000 | |||||||||||||
Consulting Agreements [Member] | Jesse Crowne [Member] | ||||||||||||||
Consulting fees | 5,000 | |||||||||||||
Consulting Agreement [Member] | LilyCon Investments, LLC [Member] | ||||||||||||||
Compensation expenses | 153,000 | |||||||||||||
Consulting fees | 12,500 | |||||||||||||
Signing bonus | $ 15,000 | |||||||||||||
Agreement, description | The agreement also provides LilyCon Investments with $35,000 in stock (to be calculated using an annual variable weighted average price from February 2019 through January 2020) to be granted on the one-year anniversary of this agreement, if the agreement has not been terminated prior to that date. | The agreement also provides LilyCon Investments with $35,000 in stock (to be calculated using an annual variable weighted average price from February 2019 through January 2020) to be granted on the one-year anniversary of this agreement, if the agreement has not been terminated prior to that date. | ||||||||||||
Consulting Agreement [Member] | LilyCon Investments, LLC [Member] | Subsequent Event [Member] | ||||||||||||||
Monthly fees | $ 5,000 | |||||||||||||
Number of shares issued | shares | 35,000 | |||||||||||||
Stock per share | $ / shares | $ 0.31 | |||||||||||||
Total number of shares issued | shares | 106,061 | |||||||||||||
Agreement maturity date | Apr. 1, 2020 | |||||||||||||
Consulting Agreement [Member] | Strategos Public Affairs LLC [Member] | ||||||||||||||
Compensation expenses | $ 71,000 | |||||||||||||
Monthly fees | $ 4,500 | $ 7,500 | ||||||||||||
Agreement maturity date | Mar. 31, 2020 | Mar. 31, 2020 | ||||||||||||
Consulting Agreement [Member] | Goldin Solutions [Member] | ||||||||||||||
Monthly fees | $ 34,650 | |||||||||||||
Total incurred expense | $ 162,000 | |||||||||||||
Agreement maturity date | Mar. 31, 2020 | Mar. 31, 2020 | ||||||||||||
Consulting Agreement [Member] | Goldin Solutions [Member] | First Month Discount [Member] | ||||||||||||||
Monthly fees | $ 12,600 | |||||||||||||
Oral Consulting Arrangement [Member] | Mr.Raymond Monteleone [Member] | ||||||||||||||
Compensation expenses | 125,000 | $ 0 | ||||||||||||
Advisory service fee | $ 10,000 | |||||||||||||
Oral Consulting Arrangement [Member] | Subsequent Event [Member] | Mr.Raymond Monteleone [Member] | ||||||||||||||
Advisory service fee | $ 5,000 | |||||||||||||
Oral Consulting Arrangement [Member] | Subsequent Event [Member] | Mr.Raymond Monteleone [Member] | Audit Committee Chair [Member] | ||||||||||||||
Advisory service fee | $ 2,500 | |||||||||||||
Oral Consulting Arrangement [Member] | St. Louis Family Office, LLC [Member] | ||||||||||||||
Agreement maturity date | Jun. 30, 2019 | |||||||||||||
Advisory service fee | $ 10,000 | |||||||||||||
Management Services Agreements [Member] | ||||||||||||||
Consulting fees | 68,000 | |||||||||||||
Distribution Center and Logistic Services Agreement [Member] | ||||||||||||||
Monthly fees | 5,050 | |||||||||||||
Total incurred expense | 49,000 | |||||||||||||
Distribution Center and Logistic Services Agreement [Member] | EURO [Member] | ||||||||||||||
Monthly fees | € | € 4,500 | |||||||||||||
Distribution Center and Logistic Services Agreement [Member] | Maximum [Member] | ||||||||||||||
Monthly fees | 8,300 | |||||||||||||
Distribution Center and Logistic Services Agreement [Member] | Maximum [Member] | EURO [Member] | ||||||||||||||
Monthly fees | € | 6,900 | |||||||||||||
Distribution Center and Logistic Services Agreement [Member] | Minimum [Member] | ||||||||||||||
Monthly fees | $ 2,300 | |||||||||||||
Distribution Center and Logistic Services Agreement [Member] | Minimum [Member] | EURO [Member] | ||||||||||||||
Monthly fees | € | € 1,900 | |||||||||||||
Patent Assignment and Contribution Agreement [Member] | ||||||||||||||
Agreement, description | This agreement provides for the Company to pay Dr. Haufe royalties equal to 1% of revenues earned from sales of any and all products derived from the use of the DenerveX technology. Royalties are payable to Dr. Haufe within 30 days after the close of each calendar quarter based on actual cash collected from sales of applicable products. The royalty period expires on September 6, 2030. | This agreement provides for the Company to pay Dr. Haufe royalties equal to 1% of revenues earned from sales of any and all products derived from the use of the DenerveX technology. Royalties are payable to Dr. Haufe within 30 days after the close of each calendar quarter based on actual cash collected from sales of applicable products. The royalty period expires on September 6, 2030. | ||||||||||||
Contribution and Royalty agreement [Member] | ||||||||||||||
Royalty expense | $ 1,100 | |||||||||||||
Royalty expiration | Sep. 6, 2030 | Sep. 6, 2030 | ||||||||||||
Total guaranteed payments | $ 42,000 |
Debt (Details Narrative)
Debt (Details Narrative) | Feb. 06, 2019USD ($)$ / sharesshares | Feb. 28, 2019shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2019EUR (€) | Nov. 30, 2019USD ($) | Sep. 30, 2018$ / shares |
Common stock, par value | $ / shares | $ .001 | $ .001 | |||||
Number of shares issued on conversion | shares | 250,000 | ||||||
Proceeds from debt | $ 4,306,300 | ||||||
Debt principal amount | € | € 424,615 | ||||||
Fair value of warrants | 73,000 | ||||||
Interest expense | $ 299,331 | 184,183 | |||||
Convertible Notes [Member] | |||||||
Debt description | Eliminating $100,000 of the Company's debt obligation. | The convertible notes had maturity dates between August and September 2019. | |||||
Market value of common stock | $ / shares | $ 0.36 | $ 0.36 | |||||
Number of shares issued on conversion | shares | 251,667 | 1,875,000 | |||||
Deemed dividend | $ 288,000 | ||||||
Proceeds from debt | $ 100,000 | ||||||
Debt conversion convertible outstanding | $ 750,000 | ||||||
Notes Payable | $ 350,000 | ||||||
Fees and penalties | $ 80,225 | ||||||
Debt, maturity date | Sep. 30, 2020 | ||||||
Convertible Notes [Member] | Three of the Noteholders [Member] | |||||||
Accrued interest | $ 52,033 | ||||||
Third Noteholder [Member] | |||||||
Notes Payable | $ 300,000 | ||||||
Accrued interest | 40,000 | ||||||
Fees and penalties | 85,000 | ||||||
Debt principal amount | $ 425,000 | ||||||
One Year Extended Note [Member] | |||||||
Number of warrants issued | shares | 424,000 | ||||||
Fair value of warrants | $ 106,000 | ||||||
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% | 5.00% | |||||
Promissory Notes [Member] | |||||||
Notes Payable | $ 78,000 | ||||||
Interest expense | $ 2,000 | $ 0 | |||||
Securities Purchase Agreement [Member] | |||||||
Market value of common stock | $ / shares | $ 0.40 | ||||||
Number of shares issued on conversion | shares | 1,875,000 | ||||||
Debt principal amount | $ 750,000 | ||||||
Securities Purchase Agreement [Member] | Convertible Notes [Member] | |||||||
Common stock, par value | $ / shares | $ 0.001 | ||||||
Market value of common stock | $ / shares | $ 0.40 | ||||||
Warrant term | 3 years | ||||||
Warrants exercise price, per share | $ / shares | $ 0.75 | ||||||
Debt instrument interest rate | 12.00% | ||||||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | |||||||
Number of common stock shares sold, value | $ 750,000 | ||||||
Sale of stock price per share | $ / shares | $ 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 | $ / shares | $ 0.001 | ||||||
Market value of common stock | $ / shares | $ 0.40 | ||||||
Warrant term | 3 years | 3 years | |||||
Warrants exercise price, per share | $ / shares | $ 0.75 |
Derivative Liability- Warrant_3
Derivative Liability- Warrants and Redemption Put Liability (Details Narrative) - USD ($) | May 31, 2018 | May 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value of the derivative liability | $ 316,000 | ||||
Cumulative changes in fair value | $ 827,000 | ||||
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 .40 common shares. | ||||
Fair value of warrants | $ 73,000 | ||||
Change in fair value of redemption put liability | 346,696 | ||||
Change in fair value of derivative liability - warrants | 827,260 | ||||
Redemption put liability | [1] | $ 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 | ||||
Warrant upper exercise price | $ 0.75 | ||||
Warrant lower exercise price | $ 0.40 | ||||
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 | ||||
Additional warrant issued | $ 2,023,438 | $ 2,023,438 | |||
[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 December 31, 2018 or 2019. |
Derivative Liability- Warrant_4
Derivative Liability- Warrants and Redemption Put Liability - Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | ||
Derivative Liability- Warrants | $ 315,855 | [1] | ||
Derivative Put Liability | [1] | 267,399 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Derivative Liability- Warrants | [1] | 315,855 | ||
Derivative Put Liability | [1] | $ 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 December 31, 2018 or 2019. |
Derivative Liability- Warrant_5
Derivative Liability- Warrants and Redemption Put Liability - Schedule of Fair Value, Liabilities Measured on Recurring Basis (Details) - USD ($) | 2 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Derivative Liability- Warrants [Member] | ||
January 8, 2019- date of dilutive financing | $ 1,215,678 | |
Exchange for common stock | (72,563) | |
Fair value adjustments | (827,260) | |
Balance at December 31, 2019 | $ 315,855 | 315,855 |
Redemption Put Liability [Member] | ||
November 15, 2019- date of issuance | 614,095 | |
Fair value adjustments | (346,696) | |
Balance at December 31, 2019 | $ 267,399 | $ 267,399 |
Derivative Liability- Warrant_6
Derivative Liability- Warrants and Redemption Put Liability - Schedule of Assumptions for Warrants (Details) | Jan. 08, 2019$ / shares | Nov. 15, 2019$ / shares | Dec. 31, 2019$ / shares |
Derivative Liability- Warrants [Member] | Fair Value of Underlying Stock [Member] | |||
Derivative Liability, Measurement Input | 0.40 | 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] | |||
Derivative Liability, Measurement Input | 2.57 | ||
Derivative Liability- Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |||
Derivative Liability, Measurement Input | 1.58 | ||
Derivative Liability- Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |||
Derivative Liability, Measurement Input | 1.59 | ||
Derivative Liability- Warrants [Member] | Measurement Input, Expected Term [Member] | |||
Derivative Liability, Measurement Input, term | 3 years | ||
Derivative Liability- Warrants [Member] | Measurement Input, Expected Term [Member] | Minimum [Member] | |||
Derivative Liability, Measurement Input, term | 1 year 4 months 2 days | ||
Derivative Liability- Warrants [Member] | Measurement Input, Expected Term [Member] | Maximum [Member] | |||
Derivative Liability, Measurement Input, term | 2 years 7 days | ||
Derivative Liability- Warrants [Member] | Measurement Input, Price Volatility [Member] | |||
Derivative Liability, Measurement Input | 115 | ||
Derivative Liability- Warrants [Member] | Measurement Input, Price Volatility [Member] | Minimum [Member] | |||
Derivative Liability, Measurement Input | 143 | ||
Derivative Liability- Warrants [Member] | Measurement Input, Price Volatility [Member] | Maximum [Member] | |||
Derivative Liability, Measurement Input | 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 | 0.118 | 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 | 1.84 | 1.92 | |
Redemption Put Liability [Member] | Measurement Input, Expected Term [Member] | |||
Derivative Liability, Measurement Input, term | 10 years | 9 years 10 months 25 days | |
Redemption Put Liability [Member] | Measurement Input, Price Volatility [Member] | |||
Derivative Liability, Measurement Input | 90 | 92 | |
Redemption Put Liability [Member] | Measurement Input, Expected Dividend Rate [Member] | |||
Derivative Liability, Measurement Input | 0 | 0 | |
Redemption Put Liability [Member] | Likelihood of Redemption [Member] | |||
Derivative Liability, Measurement Input | 50 | 50 |
Common Stock Warrants - Summary
Common Stock Warrants - Summary of Warrant Activity (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Equity [Abstract] | |
Number of Shares, Warrants Outstanding Beginning | shares | 12,108,743 |
Number Of Shares, Warrants Exchanged | shares | (1,007,813) |
Number Of Shares, Warrants Expired | shares | (2,183,478) |
Number of Shares, Warrants Issued | shares | 35,888,624 |
Number of Shares, Warrants Outstanding and Exercisable Ending | shares | 44,806,076 |
Weighted Average Exercise Price Outstanding | $ / shares | $ 1.38 |
Weighted Average Exercise Price Warrants Exchanged | $ / shares | 0.40 |
Weighted Average Exercise Price Warrants Expired | $ / shares | 2.73 |
Weighted Average Exercise Price Warrants Issued | $ / shares | 0.73 |
Weighted Average Exercise Price Outstanding and Exercisable | $ / shares | $ 0.78 |
Weighted Average Remaining Contractual Life Warrants Outstanding, Beginning | 1 year 6 months 10 days |
Weighted Average Remaining Contractual Life Warrants Outstanding, Issued | 5 years 4 months 9 days |
Weighted Average Remaining Contractual Life Warrants Outstanding and Exercisable | 4 years 7 months 2 days |
Common Stock Warrants - Schedul
Common Stock Warrants - Schedule of Assumptions for Warrants (Details) | 12 Months Ended | |
Dec. 31, 2019$ / 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 | |
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, Price Volatility [Member] | Short-term Note Related Party 11/26/2019 [Member] | ||
Warrant Input, Percentage | 144.36 | |
Measurement Input, Price Volatility [Member] | Short-term Note Related Party 12/30/2019 [Member] | ||
Warrant Input, Percentage | 145.29 | |
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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, 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, Price Volatility [Member] | ||
Warrant Input, Percentage | 89.75 | |
[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 $0.75 per share. |
Common Stock Warrants - Sched_2
Common Stock Warrants - Schedule of Assumptions for Warrants (Details) (Parenthetical) - Antidilution Provision 1/08/2019 [Member] | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
Additional warrant | $ | $ 2,023,438 |
Investment price | $ 0.04 |
Warrants exercise price, per share | $ 0.75 |
Mezzanine Equity and Series D_3
Mezzanine Equity and Series D Convertible Preferred Stock (Details Narrative) - USD ($) | Nov. 21, 2019 | Nov. 15, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Jun. 30, 2013 | |
Share issued, price per share | $ 0.40 | |||||||
Proceeds from warrants | $ 2,613,965 | |||||||
Redemption put liability | [1] | $ 267,399 | 267,399 | |||||
Shares issued during period, value | $ 4,419,787 | |||||||
Securities Purchase Agreement [Member] | ||||||||
Proceeds from warrants | $ 244,576 | |||||||
Debt conversion price per share | $ 0.40 | $ 0.40 | ||||||
Securities Purchase Agreement [Member] | FWHC HOLDINGS, LLC [Member] | ||||||||
Shares issued during period, new issues, shares | 146,998 | |||||||
Proceeds from warrants | $ 6,000,000 | |||||||
Number of shares converted during period | 100 | |||||||
Cumulative dividends, percentage | 8.00% | |||||||
Purchase agreement, description | The Series D Shares will be mandatorily converted upon the earlier of 1) the written consent of holders of a majority of Series D shareholders and 2) the common stock is listed and quoted on one of the NASDAQ markets or the New York Stock Exchange as a result of a public offering at a price of at least $1.22451 per share and proceeds of at least $25 million. The Series D Shares also contain an embedded mandatory redemption provision which will occur at the earliest of: (a) 90 days following the date that William E. Horne is no longer serving as the Corporation's CEO and a majority of the Series D holders do not approve of his replacement, (b) William E Horne transfers more than 25% of the stock owned by him to a person not related to him or a current shareholder or (c) the Company's common stock is not listed on a NASDAQ market or the New York Stock Exchange within 30 months as a result of a public offering generating minimum net proceeds of at least $25 million (the "Trigger Date"). The redemption price to be paid is the greater of a) the Original Issue Price of $40.817, plus any accrued and unpaid dividends and (b) the fair market value of the Series D Shares on the redemption date. In lieu of redeeming the Series D Shares for cash, the holder may elect to receive "Trigger Event Warrants" equal to the number of shares of common stock the Series D Shares are convertible into on the Trigger Date. The Trigger Event Warrants will have a ten-year term from the date of redemption and allow the holders to purchase shares of common stock at a price equal to the lower of a) 0.50% of the Original Issue Price and b) the Series D conversion price on the Trigger Date. | |||||||
Convertible, beneficial conversion feature | $ 623,000 | |||||||
Redemption put liability | $ 267,000 | $ 267,000 | $ 614,000 | |||||
Securities Purchase Agreement [Member] | Series D Shares [Member] | FWHC HOLDINGS, LLC [Member] | ||||||||
Preferred stock, par value, per share | $ 0.001 | |||||||
Sale of stock, price per share | 40.817 | |||||||
Debt conversion price per share | 0.40817 | |||||||
Securities Purchase Agreement [Member] | Series D Shares and Warrants [Member] | FWHC HOLDINGS, LLC [Member] | ||||||||
Share issued, price per share | 0.28 | |||||||
Debt conversion price per share | $ 0.24 | |||||||
Cumulative dividends, percentage | 8.00% | |||||||
Convertible, beneficial conversion feature | $ 623,045 | |||||||
Beneficial conversion feature, per share | $ 0.04 | |||||||
Preferred stock, discount on shares | $ 3,130,146 | |||||||
Redemption value of preferred stock | 6,000,000 | |||||||
Deemed dividends | 60,493 | |||||||
Shares issued during period, value | $ 6,060,493 | |||||||
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 December 31, 2018 or 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 ($) | Oct. 18, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
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 | $ 2,613,965 | ||
Financing costs (APIC) | $ 2,663,797 | ||
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 | 6,000,000 | ||
Financing costs paid in cash | |||
Proceeds from issuance of preferred stock and warrants, net of financing cost | 6,000,000 | ||
Proceeds Allocation [Member] | Investor Warrants [Member] | |||
Proceeds from issuance of preferred stock and warrants, net of financing cost | (6,000,000) | ||
Proceeds allocation | (1,893,006) | ||
Financing costs (APIC) | |||
Proceeds Allocation [Member] | Redeemable Preferred Stock [Member] | |||
Series D Convertible Preferred Stock | (2,869,854) | ||
Financing costs (APIC) | |||
Financing costs (Retained Earnings) | |||
Beneficial Conversion Feature | (623,045) | ||
Proceeds Allocation [Member] | Derivative Liability [Member] | |||
Derivative Put Liability | (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 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory rate - federal | 21.00% | 21.00% |
State taxes, net of federal benefit | 3.00% | 5.00% |
State NOL | (2.00%) | 0.00% |
Goodwill impairment | (9.00%) | 0.00% |
Other permanent differences | 0.00% | (1.00%) |
Change in valuation allowances | (13.00%) | (25.00%) |
Total | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Federal and state net operating loss carryforwards | $ 7,302,375 | $ 666,888 |
Capitalized start-up costs | 2,483,736 | 154,791 |
Capitalized research and development costs | 424,390 | |
Patents | 57,907 | |
Share-based compensation | 242,437 | |
Other | 25,405 | 81,801 |
Total gross deferred tax assets | 10,536,250 | 903,480 |
Valuation Allowance | (10,536,250) | (903,480) |
Net deferred tax assets |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Apr. 17, 2020EUR (€)shares | Apr. 09, 2020USD ($) | Apr. 09, 2020USD ($) | Mar. 27, 2020USD ($) | Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Apr. 17, 2020$ / shares | Apr. 17, 2020EUR (€) | Dec. 31, 2019EUR (€) |
Revenues | $ | $ 1,800,000 | $ 8,346,858 | $ 7,883,115 | ||||||||
Debt principal amount | € 424,615 | ||||||||||
Proceeds from notes | $ | 1,635,000 | 180,000 | |||||||||
Proceeds from warrants | $ | 2,613,965 | ||||||||||
Securities Purchase Agreement [Member] | |||||||||||
Debt principal amount | $ | $ 750,000 | $ 750,000 | |||||||||
Debt conversion price per share | $ / shares | $ 0.40 | $ 0.40 | |||||||||
Proceeds from notes | $ | $ 505,424 | ||||||||||
Proceeds from warrants | $ | $ 244,576 | ||||||||||
Subsequent Event [Member] | |||||||||||
Warrants exercise price per share | $ / shares | $ 0.015 | ||||||||||
Subsequent Event [Member] | Bill Horne [Member] | |||||||||||
Salary reduction per month | € 0 | ||||||||||
Salary increase per month | 18,750 | ||||||||||
Salary per annum | 225,000 | ||||||||||
Subsequent Event [Member] | Note [Member] | Investor [Member] | |||||||||||
Debt principal amount | $ | $ 500,000 | $ 500,000 | $ 500,000 | ||||||||
Total amount in exchange for loans | $ | $ 1,000,000 | $ 1,000,000 | |||||||||
Debt interest rate | 8.00% | 8.00% | 8.00% | ||||||||
Debt instrument, maturity date description | The two Notes are structured to convert into a larger offering of convertible debentures with a group of investors led by affiliates of the Investor, which is expected to close in the next thirty days. There can be no assurance that such offering will be consummated or that the Notes will convert. | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||||||
Proceeds from initial offering | $ | $ 100,000 | ||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | |||||||||||
Proceeds from initial offering | € 2,812,445 | ||||||||||
Debt interest rate | 12.00% | ||||||||||
Promissory notes, value | € 2,812,445 | ||||||||||
Promissory note, maturity date | Oct. 31, 2020 | ||||||||||
Number of fully diluted shares outstanding | shares | 3,000,000 | ||||||||||
Preferred stock, offering price | € 3,600,000 | ||||||||||
Debt conversion price per share | $ / shares | $ 0.01279 | ||||||||||
Percentage of warrants to purchase aggregate number of common shares | 200.00% | ||||||||||
Proceeds from warrants | € 1,000,000 | ||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | Michael Yurkowsky [Member] | |||||||||||
Proceeds from notes | € 25,000 | ||||||||||
Subsequent Event [Member] | Secured Convertible Note and Warrant Purchase Agreement [Member] | FWHC Bridge,LLC [Member] | |||||||||||
Promissory notes, value | € 1,535,570 | ||||||||||
Loan amount by lender | € 1,000,000 | ||||||||||
Percentage of warrants to purchase aggregate number of common shares | 100.00% |