Quarterly report pursuant to Section 13 or 15(d)

Warrants

Warrants

3 Months Ended

Mar. 31, 2021

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, 2020		516,748		$	24.60		1.86	$	-
Exercisable January 1, 2020		516,748		$	24.60		1.86	$	-
Canceled		-
Granted		349,358
Exercised		-
Expired		(85,171	)
Outstanding December 31, 2020		780,935		$	15.47		3.53	$	-
Exercisable December 31, 2020		780,935		$	15.47		3.53	$	-
Canceled		-
Granted		120,264
Exercised		-
Expired		-
Outstanding March 31, 2021		901,199		$	13.96		3.70	$	25,937
Exercisable March 31, 2021		900,849		$	13.97		3.70	$	25,153

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:

	Three-months ended March 31, 2021			Year ended December 31, 2020
Dividend yield		0.0	%		0.0	%
Risk-free rate		0.15% – 0.92	%		1.13% – 1.55	%
Volatility		151% – 187	%		143% – 168	%
Expected term		2.5 – 5 years			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 three-months ended March 31, 2021, warrants to purchase 85,000 shares of common stock at $5.00 per share were issued in connection with the issuance of convertible notes. During the year ended December 31, 2020, warrants to purchase 230,670 shares of common stock at $4.50 to $10.00 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 $110,450 and $295,854 during the three-months ended March 31, 2021, and the year ended December 31, 2020, respectively.

Director warrant grants

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
December 31, 2020		45,732	$	1.70
March 31, 2021		34,564	$	2.25

These warrants were immediately vested and expire in ten years.

During the three-months ended March 31, 2021 and 2020, the Company recognized stock-based compensation expense related to these warrants in the aggregate amount of $75,000.

Placement agent warrants

On January 11, 2021, warrants to purchase 700 shares of common stock were issued to a registered broker-dealer engaged by the Company as placement agent for the preferred stock issuance. The exercise price for one half of the warrants is $0.01 per share and can only be exercised from and after 12 months from issuance. The exercise price for the other half of the warrants is $5.00 per share and can be exercised at any time. The warrants expire in 5 years. The value of the warrants was recorded as a stock issuance cost in the aggregate amount of $903.

Warrant expiration

During the three-months ended March 31, 2021, no warrants to purchase shares of common stock expired.

During the year ended December 31, 2020, warrants to purchase an aggregate of 85,171 shares of common stock expired.