NOTE 14 – WARRANTS

During the nine months ended September 30, 2020, in conjunction with the $21M Debentures previously disclosed in Note 10 – Debentures Payable, the Company issued three-year warrants to purchase up to 180,000 shares of common stock at an exercise price of $0.75 per share. The fair value of these warrants on the issuance date approximated $28,000, with approximately $17,000 of this amount amortized to interest expense during the period and the remainder to be amortized over the term of the respective debentures.

Also during this period, as previously disclosed in Note 9 – Debt, (i) as part of the $8.8M Note transaction, the Company issued three-year warrants to purchase up to 750,000 shares of common stock at an exercise price of $0.50 per share, and (ii) in consideration of the Second Extension Agreement, the Company issued four-year warrants to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The fair value of these warrants on their issuance dates approximated $639,000, with approximately $10,000 of this amount amortized to interest expense during the period and the remainder to be amortized by the maturity dates of the respective promissory notes.

During the nine months ended September 30, 2019, in conjunction with the $21M Debentures previously disclosed in Note 10 – Debentures Payable, the Company issued three-year warrants to purchase 850,000 shares of common stock at exercise prices of $3.00 and $5.00 per share. The fair value of these warrants at issuance approximated $1,148,000, with approximately $517,000 of this amount amortized to interest expense during the period and the remainder to be amortized over the remaining term of the respective debentures.

Also during this period, as part of the $10M Note transaction previously disclosed in Note 9 – Debt, the Company issued three-year warrants to purchase 375,000 shares of common stock at an exercise price of $4.50 per share. The fair value of these warrants at issuance approximated $601,000, with approximately $294,000 of this amount amortized to interest expense during the period and the remainder amortized by the maturity date of the $10M Note.

The Company also issued stand-alone warrants to purchase up to 25,000 and 125,000 shares of common stock during the nine months ended September 30, 2020 and 2019, respectively. The fair value of these warrants at issuance approximated $2,000 in 2020 and $139,000 in 2019, and were charged to compensation expense during the periods.

During the nine months ended September 30, 2019, warrants to purchase up to 686,104 shares of common stock were exercised at exercise prices ranging from $0.12 to $1.75 per share, resulting in aggregate proceeds to the Company of approximately $612,000. No warrants were exercised during the nine months ended September 30, 2020.

At September 30, 2020 and 2019, warrants to purchase up to 17,735,107 and 11,270,107 shares of common stock, respectively, were outstanding with exercise prices ranging from $0.15 to $5.50 per share in both periods.