Annual report pursuant to Section 13 and 15(d)

Warrants

v3.21.2
Warrants
12 Months Ended
Apr. 30, 2021
Notes to Financial Statements  
Warrants

Note 11 - Warrants

 

In September 2019, we received $152,239 in connection with the exercise of 469,874 warrants which had been issued in May 2019 as part of the Share Exchange Agreement. We also assumed a fully vested, restricted stock unit agreement requiring the issuance of 41,667 shares of common stock in May 2021, as well as a warrant to purchase 5,556 shares of common stock at an exercise price of $60.00 per share. This warrant expired in March 2021.

 

In October 2020, the Company issued five-year warrants to purchase a total of 399,998 shares in connection with the issuance of $600,000 of convertible notes. The warrants have an initial exercise price of $1.50 which may be reduced to (i) a 25% discount of the price per share of Common Stock offered in a future qualified offering. The warrants were valued at $267,999 using the multinomial lattice model and are considered derivative liabilities under ASC 815-40.

 

In January 2021, the Company issued five-year warrants to purchase a total of 675,000 shares in connection with the issuance of $500,000 of convertible notes. The warrants have an initial exercise price of $1.50 which may be reduced to (i) a 25% discount of the price per share of Common Stock offered in a future qualified offering and also include a ratchet provision. The warrants were valued at $2,870,666 using the multinomial lattice model and are considered derivative liabilities under ASC 815-40.

 

In March and April 2021, we received $201,249 in connection with the exercise of 201,666 warrants which had been issued in October 2020 and January 2021 as part of the convertible note financings described in note 7. Since these exercises resulted in the elimination of the derivative liability in the warrants, the derivative liability was reduced by $694,305 with a corresponding increase in additional paid in capital.

 

The following table presents the assumptions used to estimate the fair values of the stock warrants granted:

 

    April 30, 2021
Expected volatility     86-89 %
Expected dividends     0 %
Expected term     4.42-5 Years  
Risk-free interest rate     0.29-0.61 %

 

The following table summarizes the changes in warrants outstanding issued to non-employees of the Company during the year ended April 30, 2021.

  

   

 

Number of Shares 

 

 

Weighted-average Exercise Price per Share

 

 

Weighted-average Remaining Contractual Term

(in years) 

 

 

Aggregate Intrinsic Value 

  Balance as of April 30, 2020 —       $              $     
  Granted       1,074,998       1.50              
  Exercised       (201,666 )     1.50            
  Outstanding as of April 30, 2021 873,332     $ 1.50       4.62     $ 2,218,263