Series F, G and H convertible preferred stock warrants were recorded at fair value at issuance and were revalued as of each reporting date until exercised or expired. The fair value of Series F, G and H convertible preferred stock warrants was determined with the assistance of valuation specialists using a PWERM/OPM hybrid method. This method essentially utilizes a combination of market and income method approaches for each part of the calculation of enterprise value and combines them in a probabilistic manner. The valuation considered several future scenarios for the Company, each of which assumes a shareholder exit either through initial public offering, sale (“M&A”) or dissolution. Based upon the current initial public offering market, M&A values for private companies and the historical likelihood of dissolution or no exit, the Company concluded that the probabilities and time frames were reasonable. Implicit in the timing used in the application of the PWERM/OPM Hybrid Method is also the possibility of no exit. The model’s inputs included: (1) the assumed time until a liquidity event, (2) the risk-free interest rate over the period until the assumed liquidity event, (3) the assumed volatility in the value of the equity of the company (which corresponds to the model’s underlying asset volatility), (4) the enterprise value and preferred investment amount and (5) the key price points in the Company’s capital structure in terms of exit levels on the assumed liquidation date. A significant increase (decrease) in any of these inputs in isolation, particularly the estimated price of the Company’s preferred stock, would have resulted in a significantly higher (lower) fair value measurement.

The following scenario probability-weighted assumptions were used to revalue the convertible preferred stock warrants to fair value:


	Year ended December 31,
	2020
	Range	Weighted average
Expected volatility	83.4% to 97.4%	94.6%
Risk adjusted discount factor	16% to 31%	25%
Expected life (in years)	0.4 to 2.0 years	1.1 years
Expected dividend yield	0.0%	0.0%

In February and March 2017, the Company issued 260,434 warrants to purchase shares of Series H convertible preferred stock with an exercise price of $12.40. Series H warrants were initially issued with a five-year life; in November 2017, they were extended another five years to 2027. As of December 31, 2020, the Company had 225,945 Series H warrants outstanding. The fair value of Series H warrants was $16.95 per share as of December 31, 2020. Thus, outstanding Series H warrants had an estimated fair value of $3.8 million as of December 31, 2020. There were 225,945 exercises of Series H warrants which were converted into 100,261 shares of common stock during the year ended December 31, 2021. During the year ended December 31, 2020, 1,817 Series H warrants were exercised.

As of December 31, 2020, the Series H warrants were classified as liabilities on the accompanying consolidated balance sheets and re-measured at fair value as of each balance sheet date. Changes in fair value were recognized as a component of other income (expense) in the accompanying Consolidated Statements of Operations and Comprehensive (Loss) Income. As of December 31, 2021, no Series H convertible preferred stock warrants are outstanding.