WARRANT AGREEMENTS

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Note 12 - WARRANT AGREEMENTS

On February 13, 2019, the Company issued 657,655 warrants at a fair market value of $1,792,965 and with an exercise price of $2.31 per share in connection with the conversion of $1,325,000 convertible promissory notes. The Company also issued 99,476 warrants at a fair market value of $271,202 and with an exercise price of $2.31 per share in connection with the broker fees earned from the conversion of those convertible promissory notes.

On February 15, 2019, the Company issued 312,500 warrants at a fair market value of $866,620 and with an exercise price of $2.00 per share in connection with the conversion of $500,000 convertible promissory notes.

On February 15, 2019, the Company issued 295,879 warrants at a fair market value of $814,834 and with an exercise price of $2.31 per share in connection with the conversion of $1,000,000 convertible promissory notes.

On May 14, 2019, in connection with the acquisition of CHI, the Company issued warrants to purchase up to 8,018,071 shares of the Company’s common stock at an exercise price of $5.01. The total number of shares to vest is subject to certain revenue milestones earned during the 3^rd and 4^th years post acquisition period and the warrant expires on May 14, 2024. The fair value of the warrants, assuming full vesting of all shares, was $4,642 and is used in the calculation of the acquisition price of CHI.

Warrants that vest at the end of a one-year period are amortized over the vesting period using the straight-line method.

The Company’s warrant activity was as follows:

	Warrants			Weighted Average Exercise Price		Weighted Average Contractual Remaining Life
Outstanding, December 31, 2018		5,340,751		$	2.20		3.80
Granted		9,489,340		$	4.62		4.60
Exercised		(149,249	)	$	1.78		-
Forfeited/Expired		-		$	-		-
Outstanding, June 30, 2019		14,680,842		$	3.69		3.49
Exercisable at June 30, 2019		5,638,770		$	2.09		1.89

Range of Exercise Price		Number of Warrants		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number of Warrants Exercisable		Weighted Average Exercise Price
$	1.00 – $7.00		14,680,842		3.49	$	3.69		5,638,770	$	2.09
			14,680,842		3.49	$	3.69		5,638,770	$	2.09

The weighted-average fair value of warrants granted to during the six months ended June 30, 2019 and year ended December 31, 2018, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows:

	June 30, 2019			December 31, 2018
Significant assumptions (weighted-average):
Risk-free interest rate at grant date		1.76	%		2.51	%
Expected stock price volatility		129.01	%		156.15	%
Expected dividend payout		-			-
Expected option life (in years)		3			3
Expected forfeiture rate		0	%		0	%