WARRANT AGREEMENTS

12 Months Ended

Dec. 31, 2021

WARRANT AGREEMENTS

WARRANT AGREEMENTS

NOTE 16 – WARRANT AGREEMENTS

In June 2020, as part of the Company’s settlement with CHI we amended the warrants to purchase up 8,018,071 common stock shares which vest based on various revenue achievement during year 3 and year 4 post the CHI acquisition Closing Date. As part of the settlement the Company reduced the number of warrants to 708,467 common stock shares at an exercise price of $2.00 per share which was reduced from the original exercise price of $5.01 per share. In addition, the expiration date of the warrants was amended to expire on June 5, 2020. The warrants were exercisable on the date of issuance and were exercised by the warrant holders and the Company received $1.4 million. The Company determined based on Black-Scholes value calculated for pre and post modification, there was no incremental value to the warrant modification as the exercise price was more than the fair value of the stock.

On October 2, 2020 and December 31, 2020, in connection with the Series A Note and Series B Note, respectively, a placement agent is to receive a warrant (the “Warrant”) exercisable for 2 years for the purchase of an aggregate of up to 242,424 and 60,606 shares, respectively, of the Company’s common stock, at an exercise price of $1.32 per share. The Warrant may also be exercised by means of a “cashless exercise” or “net exercise.” Upon the achievement of certain milestones, the placement agent is entitled to receive an additional warrant, on the same terms as the Warrant, exercisable for an aggregate of up to 363,636 shares of the Company’s common stock.

On December 8, 2020, an individual exercised 62,851 warrants by means of a cashless exercise with an exercise price of $1.00 per share. As a result of the exercise, the Company is to issue 26,936 common stock shares of the Company. As of the filing of this report, the Company has not yet issued these shares and is included in common stock issuable as of December 31, 2020.

During the year ended December 31, 2021, the Company did not issue any warrants.

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, 2019		14,666,518		$	3.70		2.99
Granted		303,030			1.32		1.86
Exercised		(771,318	)		1.92		-
Forfeited/Expired		(11,718,381	)		5.01		-
Outstanding, December 31, 2020		2,479,849		$	1.86		1.23
Granted		-			-		-
Exercised		(96,250	)		1.00		-
Forfeited/Expired		(818,152	)		1.58		-
Outstanding, December 31, 2021		1,565,447		$	2.18		0.66
Exercisable at December 31, 2021		1,565,447		$	2.18		0.66

Warrant summary for the year ended December 31, 2021:

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
$ 1.98–$2.31		1,565,447		0.66	$	2.18		1,565,447	$	2.18
		1,565,447		0.66	$	2.18		1,565,447	$	2.18

Warrant summary for the year ended December 31, 2020:

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–$6.00		2,479,849		1.23	$	1.86		2,479,849	$	1.86
		2,479,849		1.23	$	1.86		2,479,849	$	1.86

The weighted-average fair value of warrants granted during the years ended December 31, 2021 and 2020, 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:

	December 31, 2021			December 31, 2020
Significant assumptions (weighted-average):
Risk-free interest rate at grant date		0	%		0.36	%
Expected stock price volatility		0	%		81.14	%
Expected dividend payout		-			-
Expected warrant life (in years)		-			3
Expected forfeiture rate		0	%		0	%

The aggregate intrinsic value of warrants outstanding and exercisable at December 31, 2021 and 2020 was $0 and $0.2 million, respectively.