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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cell Source Inc (CE) | USOTC:CLCS | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0002 | 0.00 | 01:00:00 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
32-0379665
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
57 West 57th Street, Suite 400
New York, New York
|
10019
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒
|
Smaller reporting company
|
☒
|
Emerging growth company | ☒ |
PART I - FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1. Financial Statements.
|
|
1
|
Condensed Consolidated Balance Sheets as of
|
|
|
September 30, 2018 (Unaudited) and December 31, 2017
|
1
|
|
Unaudited Condensed Consolidated Statements of Operations for the
|
|
|
Three and Nine Months Ended September 30, 2018 and 2017
|
|
2
|
Unaudited Condensed Consolidated Statement of Changes in Stockholders’
|
||
Deficiency for the Nine Months Ended September 30, 2018
|
3
|
|
Unaudited Condensed Consolidated Statements of Cash Flows for the
|
|
|
Nine Months Ended September 30, 2018 and 2017
|
|
4
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
|
5
|
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
12
|
|
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
|
|
14
|
|
|
|
Item 4. Controls and Procedures.
|
|
15
|
|
|
|
PART II - OTHER INFORMATION
|
|
|
|
|
|
Item 1. Legal Proceedings.
|
|
16
|
|
|
|
Item 1A. Risk Factors.
|
16
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
16
|
|
|
|
Item 3. Defaults Upon Senior Securities.
|
|
16
|
|
|
|
Item 4. Mine Safety Disclosures.
|
|
16
|
|
|
|
Item 5. Other Information.
|
|
16
|
|
|
|
Item 6. Exhibits.
|
|
16
|
|
|
|
SIGNATURES
|
|
17
|
September 30, 2018
|
December 31, 2017
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash
|
$
|
8,121
|
$
|
371,048
|
||||
Prepaid expenses
|
85,267
|
124,693
|
||||||
Other current assets
|
48,321
|
35,936
|
||||||
Total Assets
|
$
|
141,709
|
$
|
531,677
|
||||
Liabilities and Stockholders' Deficiency
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
289,032
|
$
|
201,824
|
||||
Accrued expenses
|
861,418
|
821,244
|
||||||
Accrued interest
|
334,474
|
248,746
|
||||||
Accrued interest - related parties
|
26,554
|
13,310
|
||||||
Accrued compensation
|
670,943
|
626,758
|
||||||
Accrued compensation - related party
|
55,439
|
19,262
|
||||||
Advances payable
|
600,000
|
100,000
|
||||||
Notes payable, net of debt discount of $0 and $89,326, as of September 30, 2018 and December 31, 2017, respectively
|
1,763,000
|
1,173,674
|
||||||
Notes payable - related parties
|
150,000
|
150,000
|
||||||
Convertible notes payable, net of debt discount of $0 and $34,173 as of September 30, 2018 and December 31, 2017, respectively
|
835,000
|
800,827
|
||||||
Convertible notes payable - related parties, net of debt discount of $0 and $28,356 as of September 30, 2018 and
December 31, 2017, respectively
|
225,000
|
196,644
|
||||||
Derivative liabilities
|
287,400
|
628,200
|
||||||
Accrued dividend payable
|
112,703
|
108,562
|
||||||
Total Liabilities
|
6,210,963
|
5,089,051
|
||||||
Commitments and contingencies
|
-
|
-
|
||||||
Stockholders' Deficiency:
|
||||||||
Convertible Preferred Stock, $0.001 par value, 10,000,000 shares authorized; Series A Convertible Preferred Stock, 1,335,000
shares designated, 650,457 and 643,790 shares issued and outstanding as of September 30, 2018 and December 31, 2017,
respectively; liquidation preference of $4,991,131 and $4,936,987 as of September 30, 2018 and December 31, 2017, respectively
|
650
|
644
|
||||||
Common Stock, $0.001 par value, 200,000,000 shares authorized, 25,780,549 and 25,349,236 shares issued and outstanding as of
September 30, 2018 and December 31, 2017, respectively
|
25,781
|
25,349
|
||||||
Additional paid-in capital
|
10,014,940
|
9,969,520
|
||||||
Accumulated deficit
|
(16,110,625
|
)
|
(14,552,887
|
)
|
||||
Total Stockholders' Deficiency
|
(6,069,254
|
)
|
(4,557,374
|
)
|
||||
Total Liabilities and Stockholders' Deficiency
|
$
|
141,709
|
$
|
531,677
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Operating Expenses:
|
||||||||||||||||
Research and development
|
$
|
56,459
|
$
|
152,658
|
$
|
165,997
|
$
|
422,903
|
||||||||
Research and development - related party
|
72,527
|
200,000
|
375,151
|
600,000
|
||||||||||||
General and administrative
|
359,660
|
202,480
|
1,031,517
|
662,455
|
||||||||||||
Total Operating Expenses
|
488,646
|
555,138
|
1,572,665
|
1,685,358
|
||||||||||||
Loss From Operations
|
(488,646
|
)
|
(555,138
|
)
|
(1,572,665
|
)
|
(1,685,358
|
)
|
||||||||
Other (Expense) Income:
|
||||||||||||||||
Interest expense
|
(30,923
|
)
|
(33,445
|
)
|
(124,774
|
)
|
(144,112
|
)
|
||||||||
Interest expense - related parties
|
(756
|
)
|
(756
|
)
|
(49,244
|
)
|
(2,244
|
)
|
||||||||
Amortization of debt discount
|
-
|
(49,502
|
)
|
(173,099
|
)
|
(339,133
|
)
|
|||||||||
Amortization of debt discount - related parties
|
-
|
(18,904
|
)
|
(28,356
|
)
|
(30,040
|
)
|
|||||||||
Change in fair value of derivative liabilities
|
115,500
|
149,200
|
390,400
|
452,880
|
||||||||||||
Loss on exchange of notes payable for preferred shares
|
-
|
-
|
-
|
(725,355
|
)
|
|||||||||||
Total Other Income (Expense)
|
83,821
|
46,593
|
14,927
|
(788,004
|
)
|
|||||||||||
Net Loss
|
(404,825
|
)
|
(508,545
|
)
|
(1,557,738
|
)
|
(2,473,362
|
)
|
||||||||
Dividend attributable to Series A preferred stockholders
|
(110,666
|
) |
(74,261
|
)
|
(327,626
|
)
|
(150,630
|
)
|
||||||||
Net Loss Applicable to Common Stockholders
|
$
|
(515,491
|
)
|
$
|
(582,806
|
)
|
$
|
(1,885,364
|
)
|
$
|
(2,623,992
|
)
|
||||
Net Loss Per Common Share - Basic and Diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
$
|
(0.07
|
)
|
$
|
(0.10
|
)
|
||||
Weighted Average Common Shares Outstanding -
|
||||||||||||||||
Basic and Diluted
|
27,580,598
|
26,807,466
|
27,456,267
|
26,751,525
|
Convertible Preferred
|
Total
|
|||||||||||||||||||||||||||
Stock - Series A
|
Common Stock
|
Additional
|
Accumulated
|
Stockholders'
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Paid-In Capital
|
Deficit
|
Deficiency
|
||||||||||||||||||||||
Balance, December 31, 2017
|
643,790
|
$
|
644
|
25,349,236
|
$
|
25,349
|
$
|
9,969,520
|
$
|
(14,552,887
|
)
|
$
|
(4,557,374
|
)
|
||||||||||||||
Issuance of Series A Convertible
Preferred Stock for cash
|
6,667
|
6
|
-
|
-
|
49,994
|
-
|
50,000
|
|||||||||||||||||||||
Series A Convertible Preferred Stock dividends:
Accrual of earned dividends
|
-
|
-
|
-
|
-
|
(327,626
|
)
|
-
|
(327,626
|
)
|
|||||||||||||||||||
Payment of dividends in-kind
|
-
|
-
|
431,313
|
432
|
323,052
|
-
|
323,484
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,557,738
|
)
|
(1,557,738
|
)
|
|||||||||||||||||||
Balance, September 30, 2018
|
650,457
|
$
|
650
|
25,780,549
|
$
|
25,781
|
$
|
10,014,940
|
$
|
(16,110,625
|
)
|
$
|
(6,069,254
|
)
|
For The Nine Months Ended September 30,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net loss
|
$
|
(1,557,738
|
)
|
$
|
(2,473,362
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Change in fair value of derivative liabilities
|
(390,400
|
)
|
(452,880
|
)
|
||||
Amortization of debt discount
|
201,455
|
369,173
|
||||||
Loss on exchange of notes payable for preferred shares
|
-
|
725,355
|
||||||
Depreciation
|
-
|
407
|
||||||
Stock-based compensation:
|
||||||||
Warrants
|
-
|
44,634
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
39,426
|
17,386
|
||||||
Other current assets
|
(12,385
|
)
|
44,621
|
|||||
Accounts payable
|
87,208
|
35,337
|
||||||
Accrued expenses
|
40,173
|
42,064
|
||||||
Accrued expenses-related parties
|
-
|
100,000
|
||||||
Accrued interest
|
85,728
|
75,042
|
||||||
Accrued interest - related parties
|
13,244
|
2,244
|
||||||
Accrued compensation
|
80,362
|
95,742
|
||||||
Net Cash Used In Operating Activities
|
(1,412,927
|
)
|
(1,374,237
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Proceeds from issuance of notes payable
|
500,000
|
135,000
|
||||||
Proceeds from issuance of notes payable - related party
|
-
|
225,000
|
||||||
Proceeds from issuance of preferred stock - Series A
|
50,000
|
1,050,705
|
||||||
Proceeds from cash advance
|
500,000
|
-
|
||||||
Net Cash Provided By Financing Activities
|
1,050,000
|
1,410,705
|
||||||
Net (Decrease) Increase In Cash
|
(362,927
|
)
|
36,468
|
|||||
Cash - Beginning of Period
|
371,048
|
3,735
|
||||||
Cash - End of Period
|
$
|
8,121
|
$
|
40,203
|
||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
18,030
|
$
|
-
|
||||
Non-cash investing and financing activities:
|
||||||||
Preferred stock issued in exchange for notes and advances payable
|
$
|
-
|
$
|
2,118,355
|
||||
Reduction of additional paid-in capital for public offering issuance costs that were previously paid
|
$
|
-
|
$
|
(54,543
|
)
|
|||
Accrual of earned preferred stock dividends
|
$
|
(327,626
|
)
|
$
|
(150,630
|
)
|
||
Common stock issued in connection with payment of Series A Convertible Preferred Stock dividends in-kind
|
$
|
323,484
|
$
|
-
|
||||
Stock issued in connection with issuances and extensions of notes payable
|
$
|
-
|
$
|
143,438
|
||||
Warrants and conversion options issued in connection with issuance and extension of notes payable
|
$
|
49,600
|
$
|
67,080
|
September 30,
|
||||||||
2018
|
2017
|
|||||||
Warrants
|
|
11,915,481
|
|
11,615,481
|
||||
Convertible notes
|
1,549,810
|
1,669,783
|
||||||
Convertible preferred stock
|
6,504,570
|
-
|
||||||
Total
|
19,969,861
|
13,285,264
|
Level 1 |
Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
|
Level 2 |
Inputs use directly or indirectly observable inputs. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.
|
Level 3 |
Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.
|
|
Quoted Prices
|
|||||||||||||||
In Active
|
Significant
|
|||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Liabilities
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Accrued compensation - warrants
|
$
|
136,439
|
$
|
-
|
$
|
-
|
$
|
136,439
|
||||||||
Derivative liability
|
287,400
|
-
|
-
|
287,400
|
||||||||||||
Balance - September 30, 2018
|
$
|
423,839
|
$
|
-
|
$
|
-
|
$
|
423,839
|
||||||||
Accrued compensation - warrants
|
$
|
79,262
|
$
|
-
|
$
|
-
|
$
|
79,262
|
||||||||
Derivative liability
|
628,200
|
-
|
-
|
628,200
|
||||||||||||
Balance - December 31, 2017
|
$
|
707,462
|
$
|
-
|
$
|
-
|
$
|
707,462
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
|
||||||||||||||||
Risk-free interest rate
|
2.12% - 2.91
|
%
|
1.04% - 1.77
|
%
|
1.73% - 2.91
|
%
|
0.76% - 1.93
|
%
|
||||||||
Expected term (years)
|
0.08 - 4.41
|
0.25 - 4.25
|
0.08 - 5.00
|
0.25 - 4.76
|
||||||||||||
Expected volatility
|
110
|
%
|
110
|
%
|
110
|
%
|
110
|
%
|
||||||||
Expected dividends
|
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
Accrued
|
Derivative
|
|||||||||||
Compensation
|
Liabilities
|
Total
|
||||||||||
Balance - December 31, 2017
|
$
|
79,262
|
$
|
628,200
|
$
|
707,462
|
||||||
Accrued compensation - warrants
|
57,000
|
49,600
|
106,600
|
|||||||||
Change in fair value
|
177
|
(390,400
|
)
|
(390,223
|
)
|
|||||||
Balance - September 30, 2018
|
$
|
136,439
|
$
|
287,400
|
$
|
423,839
|
a) |
On February 21, 2018, the Company issued two notes payable in the aggregate principal amount of $400,000 and warrants for the purchase of a total of 240,000 shares of common stock at $0.75 per share for a period of five years. These notes did not accrue interest, matured on May 21, 2018, and had an effective interest rate of 40% per annum. The warrants were 100% vested upon issuance, valued at $39,700 on the date of issuance, and recorded as a debt discount. The discount was amortized to expense over the term of the notes.
|
b) |
On February 26, 2018, the Company issued a note payable in the aggregate principal amount of $100,000 and a warrant for the purchase of a total of 60,000 shares of common stock at $0.75 per share for a period of five years. The note did not accrue interest, matured on May 26, 2018, and had an effective interest rate of 40% per annum. The warrant was 100% vested upon issuance, valued at $9,900 on the date of issuance, and recorded as a debt discount. The discount was amortized to expense over the term of the note.
|
Three Months Ending:
|
Total
|
||||
March 31, 2018
|
$
|
200,000
|
|||
June 30, 2018
|
150,000
|
||||
September 30, 2018
|
50,000
|
||||
December 31, 2018
|
50,000
|
||||
March 31, 2019
|
25,000
|
||||
June 30, 2019
|
25,000
|
||||
$
|
500,000
|
June 30, 2018
|
||||||||||||
As Reported
|
Adjustment
|
As Revised
|
||||||||||
Condensed Consolidated Balance Sheet:
|
||||||||||||
Total Current Assets
|
$
|
131,545
|
$
|
-
|
$
|
131,545
|
||||||
Total Assets
|
$
|
131,545
|
$
|
-
|
$
|
131,545
|
||||||
Total Current Liabilities
|
$
|
5,928,792
|
$
|
80,000
|
$
|
6,008,792
|
||||||
Total Liabilities
|
$
|
5,928,792
|
$
|
80,000
|
$
|
6,008,792
|
||||||
Total Stockholders' Deficiency
|
$
|
(5,797,247
|
)
|
$
|
(80,000
|
)
|
$
|
(5,877,247
|
)
|
For The Three Months Ended
June 30, 2018
|
For The Six Months Ended
June 30, 2018
|
|||||||||||||||||||||||
As Reported
|
Adjustment
|
As Revised
|
As Reported
|
Adjustment
|
As Revised
|
|||||||||||||||||||
Condensed Consolidated Statements of Operations:
|
||||||||||||||||||||||||
Total Other Income (Expense)
|
$
|
63,178
|
$
|
(80,000
|
)
|
$
|
(16,822
|
)
|
$
|
11,106
|
$
|
(80,000
|
)
|
$
|
(68,894
|
)
|
||||||||
Net Loss
|
$
|
(360,729
|
)
|
$
|
(80,000
|
)
|
$
|
(440,729
|
)
|
$
|
(1,072,913
|
)
|
$
|
(80,000
|
)
|
$
|
(1,152,913
|
)
|
||||||
Net Loss Applicable to Common Stockholders
|
$
|
(470,193
|
)
|
$
|
(80,000
|
)
|
$
|
(550,193
|
)
|
$
|
(1,289,873
|
)
|
$
|
(80,000
|
)
|
$
|
(1,369,873
|
)
|
||||||
Net Loss Per Share - Basic and Diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
$
|
(0.05
|
)
|
$
|
(0.05
|
)
|
||||||||||||
Weighted Average Number of
Common Shares Outstanding
|
||||||||||||||||||||||||
- Basic and Diluted
|
27,393,071
|
-
|
27,393,071
|
27,393,071
|
-
|
27,393,071
|
For The Six Months Ended
June 30, 2018
|
||||||||||||
As Reported
|
Adjustment
|
As Revised
|
||||||||||
Condensed Consolidated Statement of Cash Flows:
|
||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||
Net Loss
|
$
|
(1,072,913
|
)
|
$
|
(80,000
|
)
|
$
|
(1,152,913
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities
|
$
|
154,404
|
$
|
80,000
|
$
|
234,404
|
||||||
Net Cash Used In Operating Activities
|
$
|
(918,509
|
)
|
$
|
-
|
$
|
(918,509
|
)
|
September 30, |
December 31,
|
|||||||
2018
|
2017
|
|||||||
(unaudited) | ||||||||
Cash
|
$
|
8,121
|
$
|
371,048
|
||||
Working capital deficiency
|
$
|
(6,069,254
|
)
|
$
|
(4,557,374
|
)
|
Exhibit
|
||||
Number
|
Description
|
|||
31
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and Chief Financial Officer
|
||
32
|
*
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and Chief Financial Officer
|
||
101.INS
|
|
XBRL Instance Document
|
||
101.SCH
|
|
XBRL Schema Document
|
||
101.CAL
|
|
XBRL Calculation Linkbase Document
|
||
101.DEF
|
|
XBRL Definition Linkbase Document
|
||
101.LAB
|
|
XBRL Label Linkbase Document
|
||
101.PRE
|
|
XBRL Presentation Linkbase Document
|
* |
This certification is being furnished and shall not be deemed "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
CELL SOURCE, INC.
|
|
|
|
|
|
|
Dated: November 14, 2018
|
By:
|
/s/ Itamar Shimrat
|
|
|
|
Name: Itamar Shimrat
|
|
|
|
Title: Chief Executive Officer and
Chief Financial Officer (Principal
Executive, Financial and Accounting
Officer)
|
|
1 Year Cell Source (CE) Chart |
1 Month Cell Source (CE) Chart |
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