H-Cyte could raise up to $5.13 million by issuing subscription rights

By Sarah Lizee

Olympia, Wash., Aug. 5 – H-Cyte Inc. could raise up to $5,129,856 by issuing subscription rights, according to a 424B2 filing with the Securities and Exchange Commission.

The company is distributing to holders of its common stock, at no charge, non-transferable subscription rights to subscribe for three shares of the company’s series A preferred stock for each share of common stock held at 5 p.m. ET on July 28, the record date for the rights offering.

Each whole subscription right entitles a holder to subscribe for three shares of series A preferred stock at a subscription price of $0.014 per series A preferred share.

Each series A preferred share initially will be convertible into one share of common stock, subject to adjustments to reflect stock splits, reclassifications and certain other events.

As of the record date for the rights offering, 122,139,432 shares of common stock and no shares of series A preferred stock were outstanding. Holders of these shares on the record date are eligible to receive the subscription rights.

The company will not issue any fractional series A preferred shares.

In connection with the rights offering, certain creditors who purchased secured convertible notes and warrants in the aggregate principal amount of $3,842,695 under a note purchase agreement dated April 17 agreed to a standby commitment under which they agreed not to exercise any subscription rights they may receive as stockholders of the company and instead to purchase any series A preferred shares corresponding to the unexercised rights in the rights offering up to an aggregate amount of $2,842,695 at the same subscription price.

The aggregate dollar amount of series A preferred shares purchased in this rights offering, when aggregated with the purchase of series A preferred shares by the standby purchasers under the standby commitment, will be at least $2,842,695.

If all of the rights offered are exercised, the aggregate offering amount in the rights offering would be $5,129,856.

In addition, holders of promissory notes in the aggregate amount of $4,829,856, based on accrued interest through July 27, are expected to convert that debt into series A preferred shares on terms substantially similar to the terms of the offering.

The subscription rights will expire if they are not exercised by 5 p.m. ET on Sept. 4.

The company’s common stock (symbol: HCYT) closed at $0.069 per share on July 29.

The medical device company is based in Tampa, Fla.

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