|9 Months Ended|
Sep. 30, 2022
Note 12 — Warrant Liability
For the nine months ended September 30, 2022, the Company issued warrants to purchase shares of the Company’s common stock related to the Warrant Exercise Agreement dated December 20, 2021, with a warrant holder, in which the Company agreed to issue % of the number of Exercised Warrant Shares at an exercise price of $3.265 to the warrant holder for every warrant the warrant holder exercised from the period commencing December 20, 2021 and ending on February 28, 2022. In conjunction with this agreement (“December 2021 Warrants”), the warrant holder exercised 36,984,569 warrants in the first nine months of 2022 which generated $111,029,493 in gross proceeds to the Company. In conjunction with the agreement, the Company issued 83,012,781 warrants to the holder and 6,641,022 to the placement agent for the agreement. The warrants have an exercise price of $3.265, a five year term, and provide registration rights to the holder along with other terms that cause the warrants to be accounted for as a liability in accordance with ASC 480 (Liabilities). The initial fair value of the warrants issued during the nine months ended September 30, 2022 was $243,681,478.
Under the May 2022 Warrant Exchange Agreement, dated May 12, 2022, the Company entered into an agreement with the holder of the Company’s July 2021 Notes warrants for the purchase of the Company’s common stock for $77% of a share of the Company’s common stock, and for each December 2021 Warrant exchanged the holder would receive 81% of a share of the Company’s common stock. The holder is entitled to exchange its November 2021 Warrants and its December 2021 Warrants under the agreement from May 12, 2022 until the sixtieth (60th) day immediately following the date on which the Company’s receives approval from its stockholders for the increase of its authorized common shares from to (the “Shareholder Approval Date”). On May 13, 2022, the Company filed a preliminary proxy statement for a Special Meeting of Stockholder’s to, among other things, seek the approval from its stockholders for such proposed increase of its authorized common shares. issued on November 10, 2021 (the “November 2021 Warrants”) and the Company’s warrants for the purchase of the Company’s common stock for $ issued on December 20, 2021 whereby the Company and the holder agreed the holder could exchange its warrants for the Company’s common shares. The exchange ratio agreed to is for each November 2021 Warrant exchanged the holder would receive
Furthermore, pursuant to the exchange agreement, on or prior to the second business day following the Shareholder Approval Date, the Company shall deliver to the holder an additional number of shares of Common Stock equal to 7% of the sum of each of the November 2021 Warrants and December 2021 Warrants exchanged by the holder during this period. In addition, the exchange agreement allows the holder for up to 60 days after the Shareholder Approval Date for (i) each November 2021 Warrant may be exchanged for 42% of a November 2021 Exchanged Warrant Share, and (ii) each December 2021 Warrants may from time to time be exchanged for 42% of a December 2021 Exchanged Warrant Share.
Pursuant to the Warrant Exercise Agreement dated May 12, 2022, no shares issued or issuable with respect to the Outstanding Warrants shall in the aggregate exceed 37,591,713 shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction relating to the Common Stock occurring after May 12, 2022).
On May 19, 2022, the holder exchanged 500,000 November 2021 Warrants for shares of the Company’s common stock, 12,000,000 September 2021 Warrants for shares and 18,090,123 December 2021 Warrants for shares of the Company’s common stock. On May 12, 2022, the holder exchanged 27,840,000 December 2021 Warrants for shares of the Company’s common stock. The Company did not receive any proceeds from the cashless exercises.
On July 5, 2022, the Holder submitted Alternate Exercise Notices to the Company with respect to (i) exercise shares under the November Warrants, and (ii) exercise shares under the December Warrants, for an aggregate payment equal to $ (the “Warrant Payment”). On July 6, 2022, the Company made the Warrant Payment, in cash, to the Holder pursuant to the Alternate Exercise Notices and, as a result, a total of warrants held by the Holder were canceled.
Schedule of Warrant Liability
The Company’s outstanding warrants set forth below were valued using the Monte-Carlo simulation pricing model to calculate the September 30, 2022 fair value of the warrants with the following assumptions:
Schedule of Warrant Assumptions
No definition available.
Warrant liability [Text Block]
No definition available.