| Warrant Liability |
14. Warrant Liability
On September 2, 2021, March 11, 2021, February 3, 2021, December 24, 2020, March 18, 2020, September 10, 2019, and November 6, 2019, the Company issued 22,019, 34,286, 7,429, 7,286, 44,286, 35,715 and 114,286 warrants, respectively, as equity issuance consideration, in connection with a private placement of the Company’s common stock. The warrants entitle the holder to purchase one share of our common stock at an exercise price equal to $0.49 to $5.25 per share at any time on or after their issuance date and on or prior to the close of business 3 years after the issuance date (the “Termination Date”). The Company determined that these warrants are free standing financial instruments that are legally detachable and separately exercisable from the common stock included in the public share offering. Management also determined that the warrants required classification as a liability pursuant to ASC 815. In accordance with the accounting guidance, the outstanding warrants are recognized as a warrant liability on the balance sheet and are measured at their inception date fair value and subsequently re-measured at each reporting period with changes being recorded as a component of other income in the statement of operations.
The fair value of the warrant liabilities was measured using a Black-Scholes model. Significant inputs into the model at the inception are as follows:
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Future |
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Estimated |
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Warrant |
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Time to |
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Calculated |
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Quarterly |
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Exercise |
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Expiration |
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Interest Rate |
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Volatility |
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Maturity |
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fair value |
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Dividend |
Black -Scholes Assumptions |
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Price |
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Date |
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Stock Price (8) |
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(annual) (9) |
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(annual) (10) |
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(Years) |
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per share |
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per share(11) |
September 2, 2021(1) |
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$ |
.0525 |
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September 2, 2026 |
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$ |
3.50 |
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0.78 |
% |
182.74 |
% |
5.0 |
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$ |
0.3325 |
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$ |
— |
March 11, 2021(2) |
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$ |
4.375 – 5.25 |
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March 11, 2026 |
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$ |
3.50 |
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0.17 |
% |
172.54 |
% |
5.0 |
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$ |
0.3325 - 0.0329 |
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$ |
— |
February 3, 2021(3) |
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$ |
2.80 |
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February 3, 2024 |
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$ |
2.80 |
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0.18 |
% |
171.71 |
% |
3.0 |
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$ |
2.417461 |
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$ |
— |
December 24, 2020(4) |
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$ |
2.80 |
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December 24, 2023 |
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$ |
2.80 |
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0.17 |
% |
172.54 |
% |
3.0 |
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$ |
2.422658 |
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$ |
— |
March 18, 2020(5) |
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$ |
1.40 |
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March 18, 2023 |
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$ |
1.40 |
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0.66 |
% |
137.41 |
% |
3.0 |
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$ |
1.075547 |
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$ |
— |
September 10, 2019(6) |
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$ |
0.49 |
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September 10, 2022 |
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$ |
0.49 |
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1.61 |
% |
139.84 |
% |
3.0 |
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$ |
0.38185 |
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$ |
— |
November 6, 2019(7) |
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$ |
0.49 |
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November 6, 2022 |
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$ |
0.49 |
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1.60 |
% |
138.48 |
% |
3.0 |
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$ |
0.38255 |
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$ |
— |
Significant inputs into the model at the reporting period measurement dates are as follows:
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Future |
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Estimated |
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Warrant |
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Time to |
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Calculated |
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Quarterly |
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Exercise |
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Expiration |
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Interest Rate |
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Volatility |
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Maturity |
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fair value |
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Dividend |
Black-Scholes Assumptions |
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Price |
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Date |
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Stock Price (8) |
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(annual) (9) |
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(annual) (10) |
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(Years) |
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per share |
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per share(11) |
December 31, 2021(1) |
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$ |
.0525 |
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September 2, 2026 |
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$ |
3.50 |
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0.98 |
% |
205.16 |
% |
4.67 |
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$ |
0.0968371 |
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$ |
— |
December 31, 2021(2) |
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$ |
4.375 – 5.25 |
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March 11, 2026 |
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$ |
3.50 |
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0.98 |
% |
205.16 |
% |
4.19 |
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$ |
0.096101 - 0.0957467 |
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$ |
— |
December 31, 2021(3) |
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$ |
2.80 |
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February 3, 2024 |
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$ |
2.80 |
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0.28 |
% |
205.16 |
% |
2.09 |
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$ |
0.0690620 |
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$ |
— |
December 31, 2021(4) |
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$ |
2.80 |
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December 24, 2023 |
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$ |
2.80 |
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0.28 |
% |
205.16 |
% |
1.98 |
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$ |
0.0681813 |
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$ |
— |
December 31, 2021(5) |
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$ |
1.40 |
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March 18, 2023 |
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$ |
1.40 |
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0.28 |
% |
205.16 |
% |
1.21 |
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$ |
0.0296661 |
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$ |
— |
December 31, 2021(6) |
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$ |
0.49 |
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September 10, 2022 |
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$ |
0.49 |
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0.09 |
% |
205.16 |
% |
0.69 |
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$ |
0.0091855 |
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$ |
— |
December 31, 2021(7) |
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$ |
0.49 |
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November 6, 2022 |
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$ |
0.49 |
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0.19 |
% |
205.16 |
% |
0.85 |
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$ |
0.0085006 |
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$ |
— |
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Future |
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Estimated |
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Warrant |
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Interest |
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Time to |
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Calculated |
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Quarterly |
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Exercise |
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Expiration |
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Stock |
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Rate |
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Volatility |
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Maturity |
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fair value |
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Dividend |
Black-Scholes Assumptions |
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Price |
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Date |
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Price (8) |
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(annual) (9) |
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(annual) (10) |
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(Years) |
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per share |
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per share(11) |
December 31, 2020(4) |
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$ |
2.80 |
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December 24, 2020 |
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$ |
2.80 |
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0.17 |
% |
172.38 |
% |
2.98 |
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$ |
2.422658 |
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$ |
— |
December 31, 2020(5) |
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$ |
1.40 |
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March 18, 2023 |
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$ |
1.40 |
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0.13 |
% |
172.38 |
% |
2.21 |
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$ |
1.075547 |
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$ |
— |
December 31, 2020(6) |
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$ |
0.49 |
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September 10, 2022 |
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$ |
0.49 |
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0.13 |
% |
172.38 |
% |
1.85 |
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$ |
0.38185 |
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$ |
— |
December 31, 2020(7) |
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$ |
0.49 |
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November 6, 2022 |
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$ |
0.49 |
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1.13 |
% |
172.38 |
% |
1.69 |
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$ |
0.3825 |
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$ |
— |
| (1) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on September 2nd, 2021
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| (2) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on March 11th, 2021
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| (3) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on February 3rd, 2021
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| (4) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on December 24th, 2020
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| (5) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on March 18th, 2020
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| (6) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on September 10th, 2019
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| (7) |
Based on the terms provided in the warrant agreement related to the issuance of common stock of on November 6th, 2019
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| (8) |
Based on the observable transaction value of common stock of per the most recent stock issuance financing agreements. |
| (9) |
Interest rate for U.S. Treasury Bonds, as of the issuance dates and each presented period ending date, as published by the U.S. Federal Reserve. |
| (10) |
Based on the historical daily volatility of Guideline Public Companies and each presented period ending date. |
| (11) |
Current estimated dividend payments beyond initial four quarters. At a future date, the company will review the working capital needs and make a final determination of any future dividend payments. |
The warrants outstanding and fair values at each of the respective valuation dates are summarized below:
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Warrants |
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Fair Value |
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Warrant Liability |
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Outstanding |
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per Share |
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Fair Value |
Fair Value at initial measurement date of 12/31/19 |
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150,000 |
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$ |
0.38185 |
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$ |
56 |
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Fair Value at initial measurement dates |
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51,572 |
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$ |
1.2656 |
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$ |
65 |
Change in fair value of warrant liability |
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2 |
Fair Value as of period ending 12/31/2020 |
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201,572 |
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$ |
123 |
Fair Value at initial measurement dates |
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63,733 |
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$ |
3.2097 |
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$ |
203 |
Change in fair value of warrant liability |
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(8) |
Fair Value as of period ending 12/31/2021 |
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265,305 |
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$ |
318 |
The warrant liabilities are considered Level 3 liabilities on the fair value hierarchy as the determination of fair value includes various assumptions about of future activities and the Company’s stock prices and historical volatility of Guideline Public Companies as inputs. As of December 31, 2020, none of the warrants have been exercised.
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