Quarterly report pursuant to Section 13 or 15(d)

WARRANTS

v3.22.2
WARRANTS
6 Months Ended
Jun. 30, 2022
Warrants  
WARRANTS

14. WARRANTS

 

No warrants were exercised during the three and six months ended June 30, 2022 and 2021.

 

At June 30, 2022, there were warrants outstanding to purchase 1,506,206 shares of common stock with a weighted average exercise price of $9.46 and a weighted average remaining life of 3.11 years.

 

The Company issued a warrant to CFF in January 2018, to purchase an aggregate of 1,000,000 shares of the Company’s common stock (the “CFF Warrant”). The CFF Warrant is exercisable at a price equal to $13.20 per share and is immediately exercisable for 500,000 shares of the Company’s common stock. The CFF Warrant is exercisable at a price equal to $13.20 per share and all shares are vested as of June 30, 2022. The CFF Warrant expires on January 26, 2025. Any shares of the Company’s common stock issued upon exercise of the CFF Warrant will be unregistered and subject to a one-year lock-up. The CFF Warrant is classified as equity as it meets all the conditions under GAAP for equity classification. In accordance with GAAP, the Company has calculated the fair value of the warrant for initial measurement and will reassess whether equity classification for the warrant is appropriate upon any changes to the warrants or capital structure, at each balance sheet date. No such changes have occurred through June 30, 2022. The weighted average assumptions used in determining the $6,215,225 fair value of the CFF Warrant were as follows:

 

Risk free interest rate

 

 

2.60

%

Expected dividend yield

 

 

%

Expected term in years

 

 

7.00

 

Expected volatility

 

 

83.5

%

 

On July 28, 2020, the Company entered into the Loan Agreement with K2HV pursuant to which K2HV may provide the Company with term loans in an aggregate principal amount of up to $50,000,000. On July 28, 2020, in connection with the funding of the first $20,000,000 tranche, the Company issued a warrant exercisable for 86,206 shares of the Company’s common stock (the “K2 Warrant”) at an exercise price of $6.96 per share. The K2 Warrant is immediately exercisable for 86,206 shares and expires on July 28, 2030. Any shares of the Company’s common stock issued upon exercise of the K2 Warrant are permitted to be settled in unregistered shares. The K2 Warrant is classified as equity as it meets all the conditions under GAAP for equity classification. In accordance with GAAP, the Company has calculated the fair value of the warrant for initial measurement and will reassess whether equity classification for the warrant is appropriate upon any changes to the warrants or capital structure, at each balance sheet date. No such changes have occurred through June 30, 2022. The weighted average assumptions used in determining the $472,409 fair value of the K2 Warrant were as follows:

 

Risk free interest rate

 

 

0.60

%

Expected dividend yield

 

 

%

Expected term in years

 

 

10.00

 

Expected volatility

 

 

80.0

%

 

On October 16, 2020, the Company entered into a professional services agreement with an investor relations service provider. Pursuant to the agreement, the Company issued warrants exercisable for a total of 420,000 shares of the Company’s common stock (the “Warrants”) at an exercise price of $1.07 per share. The Warrants became fully vested on October 19, 2021. Any shares of the Company’s common stock issued upon exercise of the Warrants are permitted to be settled in unregistered shares. The Warrants are classified as equity as they meet all the conditions under GAAP for equity classification. In accordance with GAAP, the Company has calculated the fair value of the warrants for initial measurement and will reassess whether classification for the warrant is appropriate upon any changes to the warrants or capital structure, at each balance sheet date. No such changes have occurred through June 30, 2022. The weighted average assumptions used in determining the $334,740 fair value of the Warrants were as follows:

 

Risk free interest rate

 

 

0.90

%

Expected dividend yield

 

 

%

Expected term in years

 

 

5.00

 

Expected volatility

 

 

100.6

%