Quarterly report pursuant to Section 13 or 15(d)

Warrants

Warrants

9 Months Ended

Sep. 30, 2020

Warrants and Rights Note Disclosure [Abstract]

NOTE 14 – WARRANTS

The following is a summary of the Company’s warrant activity:

	Warrants			Weighted average exercise price		Weighted average remaining contractual term in years		Aggregate intrinsic value
Outstanding January 1, 2019		590,340		$	40.65		2.32	$	7,846,743
Exercisable January 1, 2019		590,340		$	40.65		2.32	$	7,846,743
Canceled		-
Granted		20,985
Exercised		-
Expired		(94,577	)
Outstanding December 31, 2019		516,748		$	24.60		1.86	$	-
Exercisable December 31, 2019		516,748		$	24.60		1.86	$	-
Canceled		-
Granted		198,849
Exercised		-
Expired		(83,719	)
Outstanding September 30, 2020		631,878		$	18.33		3.08	$	25,686
Exercisable September 30, 2020		631,878		$	18.33		3.08	$	25,686

Warrant valuation

The Company estimates the fair value of warrants granted on each grant date using the Black-Scholes valuation model. The range of fair value assumptions related to warrants issued were as follows for the:

	Nine-months ended September 30, 2020			Year ended December 31, 2019
Dividend yield		0.0	%		0.0	%
Risk-free rate		0.13% – 1.55	%		1.34% – 2.37	%
Volatility		143% – 207	%		145% – 168	%
Expected term		2 – 5 years			2 – 2.5 years

The expected dividend yield is zero, because the Company does not anticipate paying a dividend within the relevant timeframe. The risk-free interest rate used is based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected volatility is calculated based on the historical volatility of the Company. Due to a lack of historical information needed to estimate the Company’s expected term, it is estimated using the simplified method allowed.

Convertible note warrants

During the nine-months ended September 30, 2020, warrants to purchase 125,893 shares of common stock at $4.50 to $10.00 per share were issued in connection with the issuance of convertible notes. During the year ended December 31, 2019, warrants to purchase 16,900 shares of common stock at $14 to $40 per share were issued in connection with the issuance of convertible notes. These warrants were immediately vested and expire in five years. The value of the warrants was recorded as a discount on the convertible notes in the aggregate amount of $370,351 and $125,545 during the nine-months ended September 30, 2020, and the year ended December 31, 2019, respectively.

Director warrant grants

During the nine-months ended September 30, 2020, the Company granted its independent directors warrants as follows:

Date of Grant	Warrants		Exercise Price
March 31, 2020		12,756	$	6.00
June 30, 2020		34,248	$	2.25
September 30, 2020		25,952	$	3.00

These warrants were immediately vested and expire in ten years. During the nine-months ended September 30, 2020, the Company recognized stock-based compensation expense related to these warrants in the aggregate amount of $225,000.

During the year ended December 31, 2019, the Company did not recognize any stock-based compensation expense related to warrants.

Warrant expiration

During the nine-months ended September 30, 2020, warrants to purchase an aggregate of 83,719 shares of common stock expired. During the year ended December 31, 2019, warrants to purchase an aggregate of 94,577 shares of common stock expired.