| Warrants |
| 11. | Warrants | | The following is a summary of the Company’s outstanding common stock purchase warrants. During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock, along with 3,865,000 warrants issued to those holders During the three months ended December 31, 2021, (i) holders of the Company’s Series B Preferred Stock converted 392 shares of Series B Preferred Stock into 1,960,000 shares of its common stock, along with 1,960,000 warrants issued to those holders with an initial exercise price of $.30 per share, (ii) 4,000,000 warrants were issued to the holder of the convertible notes in conjunction with the notes with an initial exercise price of $.25 per share, and (iii) 878,260 warrants issued to the placement agent with an initial exercise price of $.25 per share. The Company valued these warrants using the Black Scholes model utilizing a 143.39% volatility and a risk-free rate of 1.25%
|
| | | | |
| | | | During the six months ended December 31,
2020 the Company entered into a warrant agreement with one of the Company’s vendors issuing 500,000 warrants at a strike price
of $0.50 having a term of five years. The Company valued these warrants using the Black Scholes model utilizing a 107.93% volatility
and a risk-free rate of 0.29%
|
| | | | The aggregate intrinsic value of the warrants as of December 31, 2021 is $297,500. |
| Exercise Price |
|
|
June 30, 2021 |
|
|
Issued in FY 2022 |
|
|
Expired |
|
|
December 31, 2021 |
|
| $ |
0.01 |
|
|
|
1,600,000 |
|
|
|
|
|
|
|
- |
|
|
|
1,600,000 |
|
| $ |
0.15 |
|
|
|
500,000 |
|
|
|
|
|
|
|
- |
|
|
|
500,000 |
|
| $ |
0.20 |
|
|
|
2,250,000 |
|
|
|
|
|
|
|
|
|
|
|
2,250,000 |
|
| $ |
0.25 |
|
|
|
|
|
|
|
4,878,260 |
|
|
|
|
|
|
|
4,878,260 |
|
| $ |
0.30 |
|
|
|
2,650,000 |
|
|
|
5,825,000 |
|
|
|
- |
|
|
|
8,475,000 |
|
| $ |
0.40 |
|
|
|
150,000 |
|
|
|
|
|
|
|
- |
|
|
|
150,000 |
|
| $ |
0.50 |
|
|
|
500,000 |
|
|
|
|
|
|
|
- |
|
|
|
500,000 |
|
| $ |
0.75 |
|
|
|
300,000 |
|
|
|
|
|
|
|
300,000 |
|
|
|
- |
|
| $ |
1.00 |
|
|
|
100,000 |
|
|
|
|
|
|
|
100,000 |
|
|
|
- |
|
| |
|
|
|
|
8,050,000 |
|
|
|
10,703,260 |
|
|
|
400,000 |
|
|
|
18,353,260 |
|
Certain warrants in the above table include dilution protection for
the warrant holders, which could cause the exercise price to be reduced as a result of a financing event at a valuation below the exercise
price in effect at the time. For example, as a result of the convertible note financing, we completed in December 2021 which would allow
the new noteholders to convert their debt to shares of common stock at an exercise price of $.25/share, some of the $.30 warrants outstanding
in the table above had their exercise price reduced from $.30 to $.2952. This reduction of less than half a penny in the exercise price
of the 25,000,000 warrants associated with our Class B Preferred stock would result in proceeds to the Company of $7,380,000 rather than
$7,500,000 should all those warrants be exercised. The result of the warrant exercise price downward adjustment on modification date was
treated as a deemed dividend and fully amortized on the transaction date, and the Company recorded $68,722 to additional paid in capital
and retained earnings for a null effect on the Company’s balance sheets.
|