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WARRANTS

12 Months Ended

Dec. 31, 2020

15. WARRANTS

During the years ended December 31, 2020 and 2019, the Company issued a total of 7,542,987 warrants at an average exercise price of $2.64 per share.

Warrant issuances during 2019

During the year ended December 31, 2019, the Company issued a total of 759,443 warrants at an average exercise price of $10.28 per share.

(i)

On April 2, 2019, the Company issued warrants to purchase an aggregate of 388,888 shares of Common Stock at an initial exercise price of $18.00 per share and (the “Common Warrants”) and (b) pre-funded warrants to purchase up to 317,500 shares of Common Stock at an initial exercise price of $0.40 per share (the “Pre-Funded Warrants”) in connection with an underwriting agreement with A.G.P./Alliance Global Partners (the “Underwriter”). In addition, the Company has also issued the Underwriter a warrant to purchase a maximum of 15,555 additional shares of Common Stock at an initial exercise price of $19.80 per share (see Note 24).

(ii)

On May 20, 2019, the Company issued warrants to purchase an aggregate of 12,500 shares of Common Stock at an exercise price equal to $12.00 per share of Common Stock in connection with the issuance of a 4% Convertible Promissory Note in the aggregate principal amount of $660,000 (see Note 21).

(iii)

On July 3, 2019, the Company issued warrants to purchase an aggregate of 25,000 shares of Common Stock at an exercise price equal to $8.80 per share of Common Stock in connection with the issuance of a 12% Convertible Promissory Note in the aggregate principal amount of $1,492,000.

Warrant issuances during 2020

During the year ended December 31, 2020, the Company issued a total of 6,783,544 warrants at an average exercise price of $1.79 per share.

(i)

On February 20, 2020, pursuant to the Master Exchange Agreement, the Company issued warrants to purchase an aggregate of 1,700,361 shares of Common Stock at an average exercise price equal to $1.43 per share of Common Stock (see Note 19).

(ii)

During the year ended December 30, 2020, the Company issued warrants to purchase an aggregate of 1,536,655 shares of Common Stock at an average exercise price equal to $1.43 per share of Common Stock in connection with the issuance of the Esousa 12% short-term promissory notes in the aggregate principal amount of $2,000,000 (see Note 19).

(iii)

On April 13, 2020, the Company issued warrants to purchase up to 157,143 shares of Common Stock at an exercise price equal to $1.17 per share of Common Stock in connection with the issuance of a 10% Convertible Promissory Note in the principal amount of $100,000 (see Note 21).

(iv)

On May 28, 2020, the Company issued warrants to purchase an aggregate of 400,000 shares of Common Stock at an exercise price equal to $1.07 per share of Common Stock in connection with the issuance of a promissory note in the principal amount of $200,000 (see Note 19).

(v)

On June 26, 2020, the Company issued warrants to purchase an aggregate of 361,991 shares of Common Stock at an exercise price equal to $2.43 per share of Common Stock in connection with the issuance of promissory notes in the aggregate principal face amount of $800,000 (see Note 19).

Warrant issuances during 2020 requiring shareholder approval

Rule 713 of the NYSE American, the national securities exchange on which the Common Stock is listed, requires stockholder approval of a transaction, other than a public offering, involving the sale, issuance or potential issuance by an issuer of Common Stock (or securities convertible into or exercisable for Common Stock) at a price less than the greater of book or market value which together with sales by officers, directors or principal stockholders of the issuer equals 20% or more of presently outstanding Common Stock, or equal to 20% or more of presently outstanding stock for less than the greater of book or market value of the stock, or when the issuance or potential issuance of additional shares will result in a change of control of the issuer. Accordingly, absent shareholder approval, the holders of warrants issued between October 22, 2020 and November 19, 2020 to purchase an aggregate of 2,627,394 shares of Common Stock are prohibited from exercising the warrants and receiving shares of Common Stock unless stockholder approval is obtained for the warrants. The Company anticipates seeking stockholder approval for the exercise of all the warrants during the quarter ended June 30, 2021.

(vi)

On October 22, 2020, the Company issued warrants to purchase an aggregate of 729,927 shares of common stock at an exercise price equal to $3.01 per share of common stock in connection with the issuance of a promissory note in the aggregate principal face amount of $2,000,000 (see Note 19).

(vii)

On October 27, 2020, the Company issued warrants to purchase an aggregate of 425,000 shares of common stock at an exercise price equal to $2.20 per share of common stock in connection with the issuance of promissory notes in the aggregate principal face amount of $850,000 (see Note 19).

(viii)

On October 27, 2020, the Company issued warrants to purchase an aggregate of 148,936 shares of common stock at an exercise price equal to $2.59 per share of common stock in connection with the issuance of promissory notes in the aggregate principal face amount of $350,000 (see Note 19).

(ix)

On November 19, 2020, the Company issued warrants to purchase an aggregate of 1,323,531 shares of common stock at an exercise price equal to $1.87 per share of common stock in connection with the issuance of promissory notes in the aggregate principal face amount of $2,250,000 (see Note 19).

The following table summarizes information about common stock warrants outstanding at December 31, 2020:

Outstanding							Exercisable
			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Exercise	Number		Contractual		Exercise		Number		Exercise
Price	Outstanding		Life (Years)		Price		Exercisable		Price
$—		6,500		3.25	$	—		6,500	$—
$0.88 - $1.91		3,237,016		4.30	$	1.43		3,237,016	$0.88 - $1.91
$8.00 - $19.80		53,452		3.37	$	12.74		53,452	$8.00 - $19.80
$440 - $920		16,225		2.19	$	733.40		16,225	$440 - $920
$1,040 - $2,000		2,367		2.18	$	1,404.85		2,367	$1,040 - $2,000
$0.88 - $2,000		3,315,560		4.27	$	6.19		3,315,560	$6.19

The Company has valued the warrants at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the warrants’ term, exercise price, current stock price, risk-free interest rate and estimated volatility of our stock over the contractual term of the warrants. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the contractual life of the warrants.

The Company utilized the Black-Scholes option pricing model and the assumptions used during the years ended December 31, 2020 and 2019:

	Year Ended
	December 31, 2020			December 31, 2019
Weighted average risk free interest rate		0.12% — 1.38%			1.75% — 2.28%
Weighted average life (in years)		1.42 — 5			5.0
Volatility		86.3% — 104.6			85.5% —87.5%
Expected dividend yield		0	%		0	%
Weighted average grant-date fair value per share of warrants granted	$	1.21		$	10.34