ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On November 15, 2019, H-Cyte, Inc. (the "Company") entered into a securities
purchase agreement (the "SPA") with FWHC LLC ("FWHC") an accredited investor for
the purchase of 146,998 shares of Series D Preferred Stock, par value $0.001 per
share (the "Shares") and a ten-year warrant to purchase up to 14,669,757 shares
of Common Stock at an exercise price of $0.75 per share (the "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
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.
On November 18, 2019, the Company and Rion, LLC ("Rion") entered into a Services
Agreement (the "Services Agreement") pursuant to which Rion will conduct process
development research and development for the generation of L-Cyte-01.
The foregoing descriptions of the SPA, the RFRC Agreement, the Voting Agreement,
the IRA and the Services Agreement are qualified in their entirety by references
to the full, context of each of the agreements, copies of which are filed as
Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Current Report on Form 8-K
which are incorporated by reference
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
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, pursuant to which Rion will
supply exosomes to and support FDA-regulated clinical research for the Company.
Drs. Terzic and Behfar are co-founders of Rion. On November 18, 2019, Drs.
Terzic and Behfar were appointed to the Company's Scientific Advisory Board and
will continue their relationship with the Company.
On November 18, 2019, the Company also appointed Dr. Paul Rose and Dr. Reginald
Davis to its Scientific Advisory Board.
Dr. Paul Rose is a recognized leader in the field of dermatology, with over 30
years of experience. He is internationally recognized for achieving natural hair
transplantation results. He is one of the creators of the Follicular Isolation
Technique (FIT), a way of gathering donor material without a linear incision,
and he also developed the "ledge" trichophytic closure technique to diminish the
appearance of scarring at the donor site. Dr. Rose received his M.D. degree from
the State University of New York and completed his dermatology residency at
Temple University Skin and Cancer in Philadelphia. He is certified by the
American Board of Dermatology and is a Fellow of the American Academy of
Dermatology and the International Society of Hair Restoration Surgery. He has
served on the Clinical Faculty of the Department of Dermatology at the
University of South Florida School of Medicine.
Dr. Reginald Davis is a board-certified neurosurgeon specializing in minimally
invasive spine surgery. During his career, he has performed more than 10,000
surgeries. He has an insatiable interest in medical advances because he knows
that what he uncovers today may help more people enjoy a better quality of life
in the future. This spirit of innovation shows in the research work that he has
participated in, including clinical trials leading to FDA-approved advancements
in spine surgery. His thoughtful, methodical approach serves as the formidable
foundation to help him identify, evaluate and implement new medical
technologies. Dr. Davis pursued postgraduate study, internship and residency in
general surgery and neurosurgery at Johns Hopkins University School of Medicine.
He also completed a research fellowship with Johns Hopkins, where he serves as
an assistant professor. He has been published widely, including in the Journal
of Neurosurgery and the International Journal of Spine Surgery.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BY-LAWS; Changes in Fiscal
On November 15, 2019, the Company amended its By-laws. The amended By-laws are
filed as Exhibit 3.1 hereto.
On November 15, 2019, the Company filed a Certificate of Designation of
Preferences, Rights and Limitations of Series D Preferred Stock (the "Series D
COD") setting forth the rights governing the Series D Preferred Stock.
On November 15, 2019, the Company filed an Amended and Restated Certificate of
Designation of Preferences, Rights and Limitations of its 5% Series B Preferred
Stock, (the "Amended Series B COD") which amendment was approved by the
requisite percentage of holders of Series B Preferred Stock.
The foregoing descriptions of the Amended By-Laws, the Series D COD and the
Amended Series B COD are qualified in their entirety by reference to the full
context of each of such documents, copies of which have been filed as exhibits
3.1, 3.2 and 3.3 to this Current Report on Form 8-K which are incorporated by
ITEM 7.01 REGULATION FD DISCLOSURE
On November 18, 2019, the Company issued a press release announcing the closing
of the FWHC Investment. A copy of the press release is attached hereto and
incorporated herein by reference in its entirety as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
3.1 Amended By-Laws dated November 15, 2019.
3.2 Certificate of Designation of Preferences, Rights and Limitations
of Series B Preferred Stock dated November 15, 2019.
3.3 Amended Certificate of Designation of Preferences, Rights and
Limitations of Series B Preferred Stock.
10.1 Securities Purchase Agreement dated November 15, 2019 by and
between the Company and FWHC LLC.
10.2 Right of First Refusal and Co-Sale Agreement dated November 15,
2019 by and among the Company, FWHC LLC and certain key holders.
10.3 Voting Agreement dated November 15, 2019 by and among the
Company, FWHC and certain key holders.
10.4 Investors' Rights Agreements dated November 15, 2019 by and among
the Company, FWHC and certain key holders.
10.5 Services Agreement dated November 18, 2019 by and between the
Company and Rion, LLC*
99.1 Press Release dated November 18, 2019.
* Schedule A of this Exhibit was omitted for confidentiality reasons.
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