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DERIVATIVE LIABILITIES

12 Months Ended

Dec. 31, 2022

Derivative Liabilities

DERIVATIVE LIABILITIES

NOTE 7 - DERIVATIVE LIABILITIES

During 2020, the Company established a sequencing policy to which common stock equivalents are exercisable to shares of common stock more than the Company’s authorized limit. It was determined that all options and warrants by the end of the year were no longer permitted to be classified as equity and were valued at fair market value using Black Scholes and recorded as derivative liabilities.

On April 6, 2021, the Company agreed to buy back 33,167 warrants from investors for a total of $368. The warrants had exercise prices between $17.6 and $18.8 per share. The value of the derivative liabilities associated with these warrants was $451. The Company recorded a $64 gain in connection with the buyback of the warrants.

A summary of quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s purchase warrants that were categorized within Level 3 of the fair value hierarchy during the years ended December 31, 2022 and 2021 is as follows:

			2022				2021
Stock price		$	1.01 – 2.94			$	1.01 – 2.94
Conversion price		$	0.72 – 6.90			$	0.72 – 6.90
Contractual term (in years)			0.67 – 6.56				0.67 – 6.56
Volatility (annual)			82.70 – 211	%			82.70 - 211	%
Risk-free rate			0.09 – 1.21	%			0.09 – 1.21	%

The foregoing assumptions were reviewed quarterly and were subject to change based primarily on management’s assessment of the probability of the events described occurring.