Common Stock Warrants

3 Months Ended

Mar. 31, 2022

Common Stock Warrants

Common Stock Warrants

Note 12. Common Stock Warrants

On January 1, 2022, the Company granted warrants to purchase shares of the Company’s common stock to a consultant in connection with the issuance of Series C preferred stock as follows: a warrant to purchase 400,000 shares with an exercise price of $1.50 per share, and a term of 5 years; a warrant to purchase 250,000 shares with an exercise price of $2.50 per share, and term of 5 years; and a warrant to purchase 250,000 shares with an exercise price of $2.75 per share, and term of 5 years.

On March 29, 2022, the Company offered 16 warrant holders replacement warrants with an exercise price of $1.50 per common share, in exchange for any warrants exercised at this time at the exercise price of $1.50 per common share. The issuance of replacement warrants has the effect of resetting the conversion price of all outstanding shares of Series C preferred stock to $1.50 per common share and resetting the exercise price of all outstanding warrants to $1.50 per common shares in instances where those conversion and exercise prices are above $1.50.

On March 30, 2022, warrants to purchase 600,000 shares of the Company’s common stock were exercised by one warrant holder resulting in $900,000 in cash proceeds being received by the Company. The Company issued replacement warrants to purchase 600,000 shares of the Company’s common stock to such warrant holder.

The following table summarizes common stock warrant activity during the three months ended March 31, 2022:

	Common Stock Warrants			Weighted Average Exercise Price
Outstanding at December 31, 2021		22,460,926		$	0.82
Granted		1,500,000			1.88
Exercised		(600,000	)		1.50
Forfeited/Cancelled		—			—
Outstanding at March 31, 2022		22,360,926		$	0.71	(1)
Exercisable at December 31, 2021		21,690,926		$	0.80
Exercisable at March 31, 2022		22,670,926		$	0.68

⁽¹⁾ On March 29, 2022, the Company offered 16 warrant holders replacement warrants with an exercise price of $1.50 per common share, in exchange for any warrants exercised at this time at the exercise price of $1.50 per common share. The issuance of replacement warrants has the effect of resetting the conversion price of all outstanding shares of Series C preferred stock to $1.50 per common share and resetting the exercise price of all outstanding warrants to $1.50 per common shares in instances where those conversion and exercise prices are above $1.50.

The following table presents the assumptions used to estimate the fair values based upon a Black-Scholes calculation for the common stock warrants granted during the three months ended March 31, 2022:

	Assumptions
Expected dividend yield		0	%
Risk-free interest rate		2.09	%
Expected life (in years)		3
Expected volatility		297	%

The weighted average remaining contractual life of all common stock warrants outstanding as of March 31, 2022 was 3.28 years. Furthermore, the aggregate intrinsic value of common stock warrants outstanding as of March 31, 2022 was $47,245,839, based on the fair value of the Company’s common stock on March 31, 2022.

Additional information regarding common stock warrants outstanding and exercisable as of March 31, 2022 is as follows:

Warrant				Remaining
Exercise		Warrants		Contractual		Warrants
Price		Outstanding		Life (in years)		Exercisable
$	0.18		14,285,714		2.7		14,285,714
	0.50		50,000		3.9		50,000
	1.00		300,000		2.0		300,000
	1.50		8,045,212		4.3		7,355,212
	1.53		180,000		2.4		180,000
	2.50		250,000		4.8		250,000
	2.75		250,000		4.8		250,000
	Total		23,360,926				22,670,926