Note 8 – Warrants

The Company has issued equity-based warrants and liability warrants in conjunction with previous equity raises.

In connection with the June 2019 public offering, the Company issued Placement Agent Warrants to purchase an aggregate of 2.1 million shares of common stock at an exercise price of $0.50 with a term of five years. These warrants were accounted for as equity-based warrants (see Note 9).

In connection with the August 2018 confidentially marketed public offering, the Company issued investor warrants to purchase an aggregate of 20.0 million shares of common stock at an exercise price of $0.40 with a term of five years. Due to certain derivative features, these warrants were accounted for under liability accounting and are recorded at fair value each reporting period. As of September 30, 2019, these warrants had a fair value of $6.1 million. Significant assumptions as of September 30, 2019, December 31, 2018 and at issuance were as follows:


Assumptions for warrants issued August 13, 2018:	September 30, 2019			December 31, 2018			At Issuance

Exercise Price	$	0.40		$	0.40		$	0.40
Volatility		128.7	%		129.8	%		121.8	%
Equivalent term (years)		3.87			4.62			5.00
Risk-free interest rate		1.56	%		2.50	%		2.75	%
Number of shares		14,725,000			15,600,000			20,000,000

The total value for the warrant derivative liability as of September 30, 2019 is $8.2 million, which includes investor warrant issuances from prior periods. See Note 6 for additional information regarding the warrant derivative liability.

During the nine months ended September 30, 2019, the Company issued 875,000 shares of common stock as a result of the exercise of investor warrants with an exercise price of $0.40 and received $350,000 related to these investor warrant exercises.

The following table summarizes the Company’s warrant activity:


		Weighted		Weighted Average
	Number of	Average		Remaining
	Warrants	Exercise Price		Contractual Life

Outstanding at December 31, 2018	22,283,191	$	0.51	4.25
Warrants issued in connection with the public offering	2,100,000	$	0.50	4.72
Warrants exercised	(875,000)	$	0.40
Outstanding at September 30, 2019	23,508,191	$	0.51	3.60