From July 2019 through June 2026, and in connection with the issuance of the Debentures, the Company also issued Warrants to the Holders. See Note 7 – Convertible Debentures. The Warrants have an initial exercise date starting on the individual issue date and have a term of eight8 to ten years. The Warrants can be converted into shares of the Company’s common stock at an exercise price ranging from $0.01 to $2.20 per share.

The Company evaluated all common stock purchase warrants in accordance with the guidance provided under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”, and determined the appropriate classification as either equity or liability. The Company determined the common stock purchase warrants met the definition of a derivative and did not qualify for equity classification under ASC 815-40 and are therefore accounted for as liabilities, with changes in fair value recognized in the statement of operations each reporting period.

The fair value of each common stock purchase warrant is comprised of a single financial liability with changes in fair value recorded in gain/loss from changes in fair value in the consolidated statements of operations. The fair value of the common stock purchase warrants was determined using the Black-Scholes pricing model and the risk free interest rates an observable market input and the unobservable market inputs such as historical and implied average volatility of comparable companies publicly traded on recognized stock exchanges, and expected term and conversion probability assumptions.

The following table summarizes the assumptions used to fair value the common stock purchase warrants:

 SCHEDULE OF FAIR VALUE OF WARRANTS

Following is a summary of the change in fair value for each common stock purchase warrant (in thousands):

Fair Value

SCHEDULE OF FAIR VALUE OF COMMON STOCK PURCHASE WARRANT 

Shares of Common Stock Issuable (upon exercise of the warrants):

 SCHEDULE OF COMMON STOCK ISSUABLE WARRANTS

If, at any time while the Warrant is outstanding, the Company sells common stock at an effective price per share that is lower than the Warrant’s contractual exercise price then the Warrants conversion price shall be reduced to equal the dilutive issuance price. The Holders have waived such adjustments with respect to the Debentures, other Warrants, and other securities issued by the Company, such that no adjustments have been made to the Warrants pursuant to this provision.

From July 2019 through December 2025, and in connection with the issuance of the Debentures, the Company also issued Warrants to the Holders. See Note 10 – Convertible Debentures. The Warrants have an initial exercise date starting on the individual issue date and have a term of eight8 to ten years. The Warrants can be converted into shares of the Company’s common stock at an exercise price ranging from $0.01 to $2.20 per share.

The Company evaluated all common stock purchase warrants in accordance with the guidance provided under ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”, and determined the appropriate classification as either equity or liability. The Company determined the common stock purchase warrants met the definition of a derivative and did not qualify for equity classification under ASC 815-40 and are therefore accounted for as liabilities, with changes in fair value recognized in the statement of operations each reporting period.

The fair value of each common stock purchase warrant is comprised of a single financial liability with changes in fair value recorded in gain/loss from changes in fair value in the consolidated statements of operations. The fair value of the common stock purchase warrants was determined using the Black-Scholes pricing model and the risk free interest rates an observable market input and the unobservable market inputs such as historical and implied average volatility of comparable companies publicly traded on recognized stock exchanges, and expected term and conversion probability assumptions

The following table summarizes the assumptions used to fair value the common stock purchase warrants:

 SCHEDULE OF FAIR VALUE OF WARRANTS

Following is a summary of the change in fair value for each common stock purchase warrant (in thousands):

 SCHEDULE OF FAIR VALUE OF COMMON STOCK PURCHASE WARRANT

Fair Value

Shares of Common Stock Issuable (upon exercise of the warrants):

 SCHEDULE OF COMMON STOCK ISSUABLE WARRANTS

If, at any time while the Warrant is outstanding, the Company sells common stock at an effective price per share that is lower than the Warrant’s contractual exercise price then the Warrants conversion price shall be reduced to equal the dilutive issuance price. This right to reprice means a down round price adjustment may occur in the warrants due to a modification of the exercise or conversion price of a different previously issued financial instrument. The Holders have waived such adjustments with respect to the Debentures, other Warrants, and other securities issued by the Company, such that no adjustments have been made to the Warrants pursuant to this provision.

The following Warrants provide for cashless exercise of the warrants, under the conditions described:

Prior to the Public Company Date, for purposes of determining the number of shares of common stock issuable upon a cashless exercise of the Warrants as outlined above, the fair market value of a share of common stock will be determined by an independent appraiser selected in good faith by the Holder of a majority in interest of the Securities, as defined in the respective securities purchase agreements, then outstanding and reasonably acceptable to the Company. Following the Public Company Date, the number of shares of common stock issuable upon a cashless exercise of the Warrants will be determined based on the volume weighted-average price of the Company’s common stock.