Quarterly report pursuant to Section 13 or 15(d)

Equity-classified Warrants

v3.20.2
Equity-classified Warrants
9 Months Ended
Sep. 30, 2020
Equity-classified Warrants  
Equity-classified Warrants

Note 9.   Equity-classified Warrants

On August 4, 2020, the Company issued a warrant to the underwriter (the “Underwriter Warrant”) to purchase 240,100 shares of common stock. The Underwriter Warrant is exercisable at a per share exercise price of $11.00 and is exercisable at any time from and after January 31, 2021 through August 4, 2025.

Upon the issuance of these warrants as partial compensation for its services as an underwriter, the fair value of approximately $0.7 million was recorded as equity issuance costs.

The assumptions in the table below were used to estimate the fair value of the warrants granted using the Black-Scholes option pricing method at August 4, 2020.  The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of the warrant issued represents the period of time that the warrants issued are expected to be outstanding.  Expected volatility is based on implied volatilities from the Company’s stock, historical volatility of the Company’s stock, and other factors.

 

 

 

 

 

Risk-free interest rate

    

0.1

%

Expected term (in years)

 

2.5

 

Expected volatility

 

64.0

%

Expected dividend yield

 

 —

%

 

The details of the outstanding warrants are as follows:

 

 

 

 

 

 

 

 

 

 

    

 

    

Weighted Average Exercise 

    

Remaining Contractual 

 

 

Number of Shares

 

Price

 

Term (years)

Outstanding at December 31, 2019

 

 —

 

$

 —

 

 —

Granted

 

240,100

 

 

11.00

 

2.50

Outstanding at September 30, 2020

 

240,100

 

$

11.00

 

2.42