Note 8 – Common Stock Warrants:

Outstanding Warrants

As of December 31, 2022, the Company had warrants outstanding consisted of the following:

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Pursuant to the January 2021 Private Placement, the Company issued to investors Series E Warrants to purchase 2,333,908 shares of Common Stock, with an exercise price of $8.51 per share (subject to adjustment), for a period of twelve months from the date of an effective registration statement, Series F Warrants to purchase up to an aggregate of 2,567,299 shares of Common stock, with an exercise price of $6.90 per share (subject to adjustment), for a period of five years from the date of issuance and pre-funded Warrants to purchase 83,334 shares of Common Stock, with an exercise price of $0.01 per share (subject to adjustment), for a period of five years from the date of issuance. Of the total Series F Warrants, 233,391 were issued pursuant to the Company’s placement agent agreements for the private placement (See Note 6 – “January 2021 Private Placement” above).

Pursuant to the June 2021 Private Placement, the Company issued to investors Series G Warrants to purchase up to an aggregate of 1,653,281 shares of Common stock, with an exercise price of $8.51 per share (subject to adjustment), for a period of five years from the date of issuance and pre-funded June Warrants to purchase 66,251 shares of Common Stock, with an exercise price of $0.01 per share (subject to customary adjustment for stock splits, dividends, other), for a period of five years from the date of issuance. In addition, 152,378 warrants were issued pursuant to the Company’s Placement Agent Agreement for the private placement with an exercise price of $7.547 per share (See Note 6 – “June 2021 Private Placement” above).

On February 16, 2021, pursuant to its advisory agreements, the Company issued warrants to purchase 35,000 share of Common Stock, with an exercise price of $11.46 per share, for a period of five years from the issuance date. On April 1, 2021, the Company issued warrants to purchase 7,000 shares of Common Stock, with an exercise price of $8.80 per share, for a period of five years from the issuance date. On July 1, 2021, the Company issued warrants to purchase 10,300 shares of Common Stock, with an exercise price of $9.76 per share, for a period of five years from the issuance date.  On October 1, 2021, the Company issued warrants to purchase 10,300 shares of Common Stock, with an exercise price of $9.30 per share, for a period of five years from the issuance date. The Company used the Black-Scholes valuation model to calculate the value of these warrants issued to advisors during the year ended December 31, 2021. The fair value of the warrants was estimated at the date of issuance using the following weighted average assumptions: Dividend yield 0%; Expected term five years; volatility based upon a blend of the Parent company’s and guideline company historical volatility 127.7%; and Risk-free interest rate of 0.72%. The total expense recorded during the year period was approximately $560,000.

On January 3, 2022, pursuant to its advisory agreements, the Company issued warrants to purchase 10,300 shares of Common Stock, with an exercise price of $8.96 per share, for a period of five years from the issuance date. The Company used the Black-Scholes valuation model to calculate the value of these warrants issued to advisors during the year ended December 31, 2022. The fair value of the warrants was estimated at the date of issuance using the following weighted average assumptions: Dividend yield 0%; Expected term five years; weighted average implied volatility of 111.8%; and a weighted average Risk-free interest rate of 2.38%. The total expense recorded during the year period was approximately $147,000.

On November 22, 2022, pursuant to the November 2022 Private Placement (See Note 6 above), the Company issued warrants to purchase 1,993,485 shares of Common Stock, immediately with at an exercise price of $7.75 per share and expire five years from the date of issuance. The Exercise Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Exercise Price (subject to certain exceptions). The fair value of the warrants was estimated at the date of issuance using the following weighted average assumptions: Dividend yield 0%, Expected term five years; weighted average implied volatility of 105% and a weighted average Risk-free interest rate of 3.97%. The total value recorded during the year period, classified as a liability on the Company’s balance sheet in November 2022, is approximately $9.6 million. As of December 31, 2022, the liability is approximately $1.44 million.

As of December 31, 2022, the weighted average exercise price and the weighted average remaining life of the total warrants was $11.79 per warrant and 3.7 years, respectively.  The intrinsic value of the warrants as of December 31, 2022 was approximately $170,000.

During the year ended December 31, 2022, three affiliated warrant holders exercised 50,000 Series E Warrants to purchase 50,000 shares of Common Stock at $8.51 per share and one holder exercised 15,000 Series G Warrants to purchase 15,000 shares of Common Stock at $8.51 per share. Total cash proceeds from these warrant exercises was $553,150.