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    HCYT   US4041241096

H-CYTE, INC.

(HCYT)
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H CYTE : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-K)

03/25/2021 | 06:30pm EDT

Overview




H-CYTE, Inc is a hybrid-biopharmaceutical company dedicated to developing and
delivering new treatments for patients with chronic respiratory and pulmonary
disorders. During the last 18 months, the Company has evolved into two separate
verticals under its Healthcare Medical Biosciences Division with its entrance
into the biologics development space ("Biologics Vertical"). This new vertical
is complementary to the Company's current Lung Health Institute (LHI) autologous
infusion therapy business ("Infusion Vertical") and represents a high growth
opportunity to develop a robust pipeline of FDA approved therapeutics, focused
on underserved disease states. This focus on next generation treatments has the
potential to bring advancements to patients who have had few options beyond
managing their symptoms with inhalers and nebulizers.



To support the Company's approach to clinical development for biologics, the
Company sought and was granted external verification that the results from LHI's
real-world database of patients, who were treated with LHI's autologous infusion
therapy, was valid. Using advanced statistical modeling, the Company generated
real world evidence validating that its proprietary PRP- PBMC therapy provides
statistically significant improvement in FEV1 at both three months and twelve
months, as well as an excellent safety profile and quality of life advantages.
This evidence was accepted for publication in January 2021 and appears in the,
"Journal of Regenerative Medicine & Biology Research."



A second publication has been submitted that will further support the Company's
autologous infusion therapy. This real-world study focuses on the sentinel
measurement of lung disorders. Entitled, "FEV1 Absolute Volume Analysis and
predicted FEV changes" this study will focus primarily on efficacy of the
Infusion Vertical's PRP-PBMC therapy in its patient population. In addition, the
company is seeking FDA clearance of the device used in its Infusion Vertical to
have a specific indication for lung disorders.



The Company's Biologics Vertical has commenced preclinical work in support of
filing an Investigational New Drug Application ("IND") with the U.S. Food and
Drug Administration ("FDA"). The Company is anticipating an initial submission
during the second half of 2021.



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.



Impact of COVID-19


The coronavirus outbreak ("COVID-19") has adversely affected the Company's
financial condition and results of operations in 2020. The impact of the
outbreak of COVID-19 on the businesses and the economy in the United States and
the rest of the world is and is expected to continue to be significant. The
extent to which COVID-19 outbreak will continue to 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 took steps to protect its vulnerable
patient base (elderly patients suffering from chronic lung disease) by
cancelling all treatments effective March 23, 2020 through the end of July 2020.
The Company made the decision in late March 2020, to layoff approximately 40% of
its employee base, including corporate and clinical employees and to cease
operations at the LHI clinics in Tampa, Nashville, Scottsdale, Pittsburgh, and
Dallas. The Company reopened operations in August 2020 at its clinics in Tampa,
Nashville, and Scottsdale. The clinics in Pittsburgh and Dallas did not reopen
and were closed permanently.



The Company believed these expense reductions were necessary during the
unexpected COVID-19 pandemic. Due to COVID-19, the Company was not able to
generate revenue from March 23, 2020 until August 2020. With the Company's
revenue-generating activities suspended for a portion of 2020 and the negative
impact that COVID-19 has had on its medical biosciences division, the Company
will need to raise cash from debt and equity offerings to continue its
operations. There can be no assurance that the Company will be successful in
doing so. See Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity.



The Company has updated its business model to decrease corporate overhead and
marketing expense to significantly reduce expenses. The Company believes as
COVID-19 begins to dissipate due to vaccinations being administered nationwide,
patients will again begin to travel to one of the LHI clinics for treatment. The
Company continues to focus on developing a new FDA approved biologic for the
treatment of chronic lung disease.



  9







                             RESULTS OF OPERATIONS


Year Ended December 31, 2020 Compared to Year Ended December 31, 2019




The following table sets forth certain operational data including their
respective percentages of revenues for the years ended December 31, 2020 and
2019:



                                  H-Cyte, Inc

                            Statement of Operations



                                       2020              2019             Change          Change %
Revenues                           $   2,150,672     $   8,346,858     $  (6,196,186 )           -74 %

Gross Profit                           1,383,715         6,294,051        (4,910,336 )           -78 %

Operating Expenses                     8,476,059        36,852,436       (28,376,377 )           -77 %

Operating Loss                        (7,092,344 )     (30,558,385 )      23,466,041              77 %

Other Income                             633,108           750,507          (117,399 )           -16 %

Net Loss                           $  (6,459,236 )   $ (29,807,878 )   $  23,348,642              78 %

Net Loss attributable to common
stockholders                       $  (6,781,411 )   $ (33,196,029 )   $  26,414,618              80 %

Loss per share - Basic and
diluted                            $       (0.06 )   $       (0.34 )

Weighted average outstanding
shares - basic and diluted           111,491,261        96,370,562




Revenue and Gross Profit



Revenue is derived predominantly from the Company's Biosciences division, which
resulted in revenue, net of allowance for refunds, for the year ended December
31, 2020 and December 31, 2019, of approximately $2,151,000 and $8,347,000,
respectively. The decrease in revenue for the year ended December 31, 2020, as
compared to the prior year is attributable to suspending operations, the
permanent closure of two of the five LHI clinics, and the ongoing effects due to
COVID-19 to the Biosciences division.



For the years ended December 31, 2020 and December 31, 2019, the Company
generated a gross profit totaling approximately $1,384,000 (64% of revenue) and
$6,294,000 (75% of revenue), respectively. The decrease in revenue is due to the
effects of COVID-19. Gross profit decreased in 2020 compared to 2019 due to the
Company using part-time medical staff to treat its patients in Tampa and
Scottsdale causing cost of sales for patient care to increase.



  10







Salaries and Related Costs



For the years ended December 31, 2020 and December 31, 2019, the Company
incurred approximately $3,199,000 and $8,646,000, respectively, in salaries and
related costs. Included in salaries and related costs for the year ended
December 31, 2019 was approximately $1,690,000 in compensation expense related
to the common stock issued to Mr. William E. Horne, former Chief Executive
Officer ("CEO"), on April 25, 2019. These shares were fully vested upon the
issuance of a restricted stock award. Excluding the non-recurring stock
compensation expense of approximately $1,690,000, the Company realized a
decrease in salaries and related costs for the periods ending December 31, 2020
compared to December 31, 2019, due to its recent cost reduction measures
effective in 2020 in response to the COVID-19 pandemic. The Company made the
decision in late March 2020, to layoff approximately 40% of its employee base,
including corporate and clinical employees and to cease operations at the LHI
clinics in Tampa, Nashville, Scottsdale, Pittsburgh, and Dallas. The Company
reopened operations in August 2020 at its clinics in Tampa, Nashville, and
Scottsdale. The clinics in Pittsburgh and Dallas did not reopen and were closed
permanently.


Other General and Administrative




For the years ended December 31, 2020 and December 31, 2019, the Company
incurred approximately $3,747,000 and $6,847,000, respectively, in other general
and administrative costs. The decrease is attributable to cost saving measures
in response to the COVID-19 pandemic. The Company made the decision in late
March 2020, to layoff approximately 40% of its employee base, including
corporate and clinical employees and to cease operations at the LHI clinics in
Tampa, Nashville, Scottsdale, Pittsburgh, and Dallas. The Company reopened
operations in August 2020 at its clinics in Tampa, Nashville, and Scottsdale.
The clinics in Pittsburgh and Dallas did not reopen and were closed permanently.



Advertising



For the years ended December 31, 2020 and December 31, 2019, the Company had
approximately $297,000 and $4,910,000, respectively, in advertising costs. The
decrease is attributable to a shift in the Company's marketing plan and cost
saving measures in response to the COVID-19 pandemic. The Company re-evaluated
its marketing plan in 2020 and decided to significantly reduce marketing spend
during the COVID-19 pandemic.



Loss on Impairment



The Company recorded a loss on impairment for its DenerveX technology of
approximately $2,944,000 and its goodwill totaling approximately $12,564,000 for
the year ended December 31, 2019. As the Company has determined that the
DenerveX System no longer represents part of its strategic plans for the future,
the loss on impairment of the technology was recorded. The Company also
determined the fair value of the reporting unit was less than the carrying
amount of goodwill. As a result, during the fourth quarter of 2019 the Company
recorded a goodwill impairment charge. For the year ended December 31, 2020, the
Company did not have impairment losses.



Depreciation & Amortization


For the year ended December 31, 2020, the Company recognized approximately
$81,000 in depreciation and amortization expense, compared to approximately
$834,000 in 2019. The decrease is primarily attributable to amortization of the
technology intangible asset acquired in the Merger for the year ended December
31, 2019. The expense for 2020 was significantly lower due to no amortization
recorded in 2020.



Other Income (Expense)



For the years ended December 31, 2020 and 2019, interest expense was
approximately $1,463,000 and $299,000 respectively. The increase is attributable
to new financing being arranged for the year ended December 31, 2020 along with
the closing of the Rights Offering on September 11, 2020.



The change in fair value of redemption put liability and change in fair value of
the derivative liability - warrants for the year ended December 31, 2019 were
approximately $347,000 and $827,000, respectively, and was a result of the
assumption of the Series B Convertible Preferred Stock in the Merger and the
Series D Convertible Preferred Stock financing in 2019, respectively. The change
in fair value of redemption put liability and change in fair value of the
derivative liability - warrants for the year ended December 31, 2020 were
approximately $273,000 and $2,987,000, respectively, and was a result of the
change in fair value at the end of each reporting period and was subsequently
reclassified to equity at the close of the Rights Offering (see Note 12).



  11






Liquidity, Sources of Liquidity, and Going Concern

The Company had approximately $1,641,000 and $1,424,000 of cash on hand at December 31, 2020 and 2019, respectively.

The Company incurred net losses of approximately $6,459,000 and $29,808,000 for
the years ending December 31, 2020 and 2019, 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 generally accepted accounting principles in the United States
("U.S. GAAP") as applicable to a going concern.



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 biologics protocol and taking that
protocol through the FDA process.



COVID-19 has adversely affected the Company's financial condition and results of
operations. In the first quarter of 2020, the Company took steps to protect its
vulnerable patient base (elderly patients suffering from chronic lung disease)
by cancelling all treatments effective March 23, 2020 through July 2020. The
Company also 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 located in Tampa, Scottsdale, Pittsburgh,
Nashville, and Dallas. The Company resumed operations in August at the Tampa,
Nashville, Scottsdale, and Pittsburgh clinics. The Pittsburgh clinic ceased
operations permanently at the end of October 2020. The Dallas clinic did not
re-open and was closed permanently. The Company believed these expense
reductions were necessary during the unexpected COVID-19 pandemic.



The Company has updated its business model to decrease corporate overhead and
marketing expense to significantly reduce expenses. The Company believes that as
COVID-19 begins to dissipate due to vaccinations being administered nationwide,
that patients will again feel comfortable traveling to one of the LHI clinics
for treatment. The Company continues to focus on developing a new FDA approved
cellular therapy for the treatment of chronic lung disease.



Going Concern



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 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 continue to impact the economy is highly uncertain and cannot be
predicted. Accordingly, the Company cannot predict the extent to which its
financial condition and results of operation will be affected.



The Company has updated its business model to decrease corporate overhead and
marketing expense to significantly reduce expenses. The Company believes that as
COVID-19 begins to dissipate due to vaccinations being administered nationwide,
that patients will again feel comfortable traveling to one of the LHI clinics
for treatment. The Company's Biologics Vertical has commenced preclinical work
in support of filing an Investigational New Drug Application ("IND") with the
U.S. Food and Drug Administration ("FDA"). The Company is anticipating an
initial submission during the second half of 2021.



With the Company's revenue-generating activities hindered significantly by COVID-19, the Company will need to raise cash from debt and equity offerings to continue clinical operations and to take the biologics protocol to the FDA. There can be no assurance that the Company will be successful in doing so.




Although cost reduction measures were taken in 2020, due to COVID-19, the
present level of cash is insufficient to satisfy the Company's current operating
requirements. The Company is seeking additional sources of funds from the sale
of equity or debt securities or through a credit facility.



  12






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
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, there is substantial doubt
about the Company's ability to continue as a going concern. 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.



Critical Accounting Policies and Estimates




Our discussion and analysis of our financial condition and results of operations
are based on our consolidated financial statements, which we have prepared in
accordance with U.S. GAAP. The preparation of these consolidated financial
statements requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting periods.



On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below.

We base our estimates on historical experience and on various other factors that
we believe are reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.



While our significant accounting policies are described in more detail in the
notes to our consolidated financial statements included elsewhere in this
report, we believe that the following accounting policies are the most critical
to aid you in fully understanding and evaluating our financial condition and
results of operations.



Fair Value Measurements



We measure certain non-financial assets 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 and derivatives.



We use the fair value measurement framework to value these assets and report the fair values in the periods in which they are recorded 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. We may also engage external advisors to assist us in
determining fair value, as appropriate.



  13







Although we believe that the recorded fair value of our financial instruments is
appropriate at December 31, 2020, these fair values may not be indicative of net
realizable value or reflective of future fair values.



Income Taxes


The Company uses the liability method of accounting for income taxes, which
requires recognition of temporary differences between financial statement and
income tax bases of assets and liabilities, measured by enacted tax rates. A
valuation allowance will be recorded to reduce deferred tax assets when
necessary.



The Company files income tax returns in the U.S. federal jurisdiction and certain state jurisdictions. The tax years that could be subject to federal audit are 2017, 2018, and 2019.



Revenue Recognition



We recognize revenue in accordance with generally accepted accounting principles
as outlined in the Financial Accounting Standard Board's ("FASB") Accounting
Standards Codification ("ASC") 606, Revenue From Contracts with Customers, which
requires that five basic criteria be met before revenue can be recognized: (i)
identify the contract with the customer; (ii) identity the performance
obligations in the contract; (iii) determine the transaction price; (iv)
allocate the transaction price; and (v) recognize revenue when or as the entity
satisfied a performance obligation.



The Company recognizes revenue in accordance with U.S. GAAP as outlined in the
FASB ASC 606, Revenue From Contracts with Customers, which requires that five
steps be completed to determine when revenue can be recognized: (i) identify the
contract with the customer; (ii) identity the performance obligations in the
contract; (iii) determine the transaction price; (iv) allocate the transaction
price; and (v) recognize revenue when or as the entity satisfies a performance
obligation. The Company records revenue under ASC 606 when control is
transferred to the customer, which is consistent with past practice. The
adoption of this standard did not have a material impact on the consolidated
financial statements.


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 LHI 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 stand-alone selling price for each session

of treatment. The Company has deferred recognition of revenue amounting to

approximately $634,000 and $1,046,000 at December 31, 2020 and December 31,

     2019, respectively.



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, 2020 and 2019, the estimated
allowance for refunds was approximately $77,000 and $63,000, respectively and is
recorded as a contra revenue account.



Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4) during the periods presented, investments in special-purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.



  14







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
$10,000 and $83,000 for the years ended December 31, 2020 and 2019,
respectively, related to these agreements.



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
years ended December 31, 2020 and 2019, the Company expensed a total of
approximately $65,000 and $153,000, respectively, 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.



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, 2020 and December 31, 2019, the Company expensed $99,000 and
$162,000, respectively. The Company terminated this agreement in March 2020.



The Company entered into a consulting agreement with Tanya Rhodes of Rhodes &
Associates, Inc, effective June 15, 2020, to serve as the Chief Technology
Officer (Research) of the Company. The agreement has a minimum term of six
months with an average fee of $20,000 per month plus expenses which increases 5%
per month on January 1 of each calendar year unless an alternative retainer
amount is negotiated and agreed upon by both parties. The Company extended the
contract on January 1, 2021, resulting in monthly expenses of $22,500 plus
expenses for services rendered. Ms. Rhodes is a meaningful member of the
management group and serves as the Company's Chief Technology Officer
(Research). Ms. Rhodes is an innovative, growth-oriented leader in healthcare
with a broad base of international experience in all aspects of operational
business including R&D, clinical and regulatory, strategic marketing and
business development. She brings a demonstrated track record for bringing new
technologies from concept through commercialization, and brings an in-depth
knowledge of biological tissues, enzymes, stem cells, antimicrobials and natural
products. Prior to joining H-Cyte Ms. Rhodes held numerous C-level positions in
many sectors including wound care, dermatology, aesthetics and plastic surgery,
and was the VP Innovation for Smith & Nephew and a global executive team member
driving $450M business.  Ms. Rhodes completed her PhD in molecular orbital
computational chemistry in the UK and then a Masters Degree in the Management of
Technology in the US.


Departure of Directors and Certain Officers, Election of Directors, Appointment of New Board Members and Officers

On February 29, 2020, the Company accepted the resignations of Briley Cienkosz, Chief Marketing Officer and Gary Mancini, Chief Relationship Officer for personal reasons and not as a result of any disputes or disagreements.




On May 7, 2020, William Horne, the Company's Chief Executive Officer ("CEO") and
Chairman tendered his resignation as CEO effective when the Company finds a
suitable replacement with more FDA experience. Until such successor is retained,
Mr. Horne will remain as the CEO. Mr. Horne's resignation does not pertain to
his position as Chairman of the Board or as a Director. The resignation was not
as a result of any disagreement with the Company or its policies and practices.



On September 28, 2020, the Company appointed Robert Greif as its CEO and
President. Prior to joining the Company, Mr. Greif was the Chief Commercial
Officer and business development Leader at Atox Bio, Inc. from February 2019 to
November 2019. At Atox, Mr. Greif built the North American commercial
organization in preparation for the launch of a first-in-class immunomodulatory.
Prior to joining Atox, Mr. Greif led the commercial operations of rEvo
Biologics, Inc., an orphan disease biotechnology company from May 2011 to
February 2019. He also held a variety of business unit and commercial leadership
roles at United Health Group Incorporated, Boehringer Ingelheim Group, and
Sanofi SA. The Company believes that Mr. Greif's strong track record leading
high-growth pharmaceutical and biotech businesses makes him qualified to serve
in his role with the Company.



On September 29, 2020, Ann Miller resigned as the Company's Chief Operating Officer.




On September 29, 2020, with the Company's appointment of Robert Greif as CEO and
President, Mr. William Horne resigned as the CEO and President. There are no
family relationships between any director or executive officer of the Company
and any other director or executive officer of the Company, or any person
nominated or chosen by the Company to become a director or executive officer.



On January 12, 2021, Mr. William Horne stepped down as Chairman of the board of
directors (the "Board") of H-Cyte, Inc. (the "Company"). Mr. Horne will remain a
member of the Board.


On January 12, 2021, Mr. Raymond Monteleone, a member of the Board, was appointed the new Chairman of the Board.



Indemnification



We have agreements whereby we indemnify our officers and directors for certain
events or occurrences while the officer or director is or was serving, at our
request, in such capacity, to the maximum extent permitted under the laws of the
State of Nevada.



The maximum potential amount of future payments we could be required to make
under these indemnification agreements is unlimited. However, we maintain
directors and officers insurance coverage that may contribute, up to certain
limits, a portion of any future amounts paid for indemnification of directors
and officers. We believe the estimated fair value of these indemnification
agreements in excess of applicable insurance coverage is minimal. Historically,
we have not incurred any losses or recorded any liabilities related to
performance under these types of indemnities.



Additionally, in the normal course of business, we have made certain guarantees,
indemnities and commitments under which we may be required to make payments in
relation to certain transactions. These indemnities include intellectual
property and other indemnities to our customers and distribution network
partners in connection with the sales of our products and therapies, and
indemnities to various lessors in connection with facility leases for certain
claims arising from such facility or lease.



It is not possible to determine the maximum potential loss under these guarantees, indemnities and commitments due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision.

Recently Adopted Accounting Standards




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.



  15







The Company has not entered into significant lease agreements in which it is the
lessor. For the lease agreements in which the Company is the 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.



In June 2018, FASB issued ASU No. 2018-07, Compensation-Stock Compensation
(Topic 718)-Improvements to Nonemployee Share-Based Payment Accounting ("ASU
2018-07"). ASU 2018-07 expands the scope of Topic 718 to include share-based
payment transactions for acquiring goods and services from nonemployees. The
Company adopted ASU 2018-07 in the first quarter of 2019. The adoption of this
standard did not have a material impact on our consolidated financial
statements.



In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740),
Simplifying the Accounting for Income Taxes, which amends the approaches and
methodologies in accounting for income taxes during interim periods and makes
changes to certain income tax classifications. The new standard allows
exceptions to the use of the incremental approach for intra-period tax
allocation, when there is a loss from continuing operations and income or a gain
from other items, and to the general methodology for calculating income taxes in
an interim period, when a year-to date loss exceeds the anticipated loss for the
year. The standard also requires franchise or similar taxes partially based on
income to be reported as income tax and the effects of enacted changes in tax
laws or rates to be included in the annual effective tax rate computation from
the date of enactment. Lastly, in any future acquisition, the Company would be
required to evaluate when the step-up in the tax basis of goodwill is part of
the business combination and when it should be considered a separate
transaction. The standard will be effective for the Company beginning January 1,
2021, with early adoption of the amendments permitted. The Company is currently
evaluating the impact from the adoption of ASU 2019-12 on its consolidated
financial statements.

© Edgar Online, source Glimpses

All news about H-CYTE, INC.
04:12pH CYTE  : Management's Discussion and Analysis of Financial Condition and Result..
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04/08H-CYTE, INC.  : Entry into a Material Definitive Agreement, Financial Statements..
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03/25H CYTE  : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT..
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2020H CYTE  : Management's Discussion and Analysis of Financial Condition and Result..
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2020H-CYTE, INC.  : Entry into a Material Definitive Agreement, Change in Directors ..
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2020H CYTE  : Robert Greif named Chief Executive Officer of H-CYTE
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2020Robert Greif named Chief Executive Officer of H-CYTE
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2020H-CYTE, INC.  : Unregistered Sale of Equity Securities, Other Events (form 8-K)
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Financials (USD)
Sales 2020 2,15 M - -
Net income 2020 -6,46 M - -
Net cash 2020 0,47 M - -
P/E ratio 2020 -0,27x
Yield 2020 -
Capitalization 4,62 M 4,62 M -
EV / Sales 2019 1,72x
EV / Sales 2020 0,75x
Nbr of Employees -
Free-Float 20,1%
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Managers and Directors
NameTitle
Robert Greif President & Chief Executive Officer
Jeremy Daniel Chief Financial & Accounting Officer
Raymond Monteleone Chairman
Tanya Rhodes Chief Technology Officer
William E. Horne Director
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