STOCKHOLDERS' DEFICIT (Tables)
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9 Months Ended |
Sep. 30, 2020 |
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| Summary of outstanding warrants |
A summary of outstanding warrants as of September 30, 2020 and December 31, 2019 is presented below:
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September 30, 2020
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December 31, 2019
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Warrants outstanding, beginning of period
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4,931,099
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3,436,431
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Assumed as part of Merger
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—
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1,044,939
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Granted
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3,550,000
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500,729
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Exercised
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—
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(51,000
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)
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Cancelled, forfeited or expired
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(115,953
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)
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—
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Warrants outstanding, end of period
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8,365,146
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4,931,099
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A summary of outstanding warrants by year issued and exercise price as of September 30, 2020 is presented below:
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Outstanding
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Exercisable
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Year issued and Exercise Price
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Number of
Warrants
Issued
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Weighted-Average
Remaining
Contractual
Life (Years)
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Weighted-Average
Exercise
Price
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Total
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Weighted-Average
Exercise
Price
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Prior to January 1, 2019
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$2.00-$10.76
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3,439,007
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1.91
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$
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4.38
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3,439,007
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$
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4.38
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Prior to Jan 1, 2019 Total
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3,439,007
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3,439,007
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At December 31, 2019
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$
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6.12
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32,391
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3.66
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$
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6.12
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32,391
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$
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6.12
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$
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12.00
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76,575
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2.98
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$
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12.00
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76,575
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$
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12.00
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$
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14.04
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174,999
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2.49
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$
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14.04
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174,999
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$
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14.04
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$
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31.50
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737,975
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1.82
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$
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31.50
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737,975
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$
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31.50
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$
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36.24
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22,333
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1.82
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$
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36.24
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22,333
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$
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36.24
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$
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60.00
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666
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0.25
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$
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60.00
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666
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$
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60.00
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$
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2.00
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256,200
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3.08
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$
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2.00
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256,200
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$
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2.00
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$
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7.68
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75,000
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3.80
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$
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7.68
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75,000
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$
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7.68
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2019 Total
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1,376,139
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1,376,139
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At September 30, 2020
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$
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2.05
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1,250,000
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4.71
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$
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2.05
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—
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$
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—
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$
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2.00
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2,300,000
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4.95
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$
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2.00
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2,300,000
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2
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Total
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8,365,146
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7,115,146
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| Schedule of valuation assumptions |
Management has valued stock options at their date of grant utilizing the Black‑Scholes‑Merton option pricing model. The fair value of the underlying shares was determined by the market value of stock of similar companies and recent arm’s length transactions involving the sale of the Company’s common stock. Prior the Merger, the Company lacked company-specific historical and implied volatility information for its common stock. Therefore, the expected volatility was calculated using the historical volatility of a comparative public traded companies. The following table presents the assumptions used on recent dates on which options were granted by the Company.
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6/29/2020
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6/19/2019
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Stock Price
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$
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1.67
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$
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10.30
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Exercise Price
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$
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2.05
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$
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10.30
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Term
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5.5-6 years
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6 years
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Risk-Free Rate
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0.28%-0.38%
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1.83
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%
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Dividend Yield
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—
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—
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Volatility
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78.91%-80.49%
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67.16
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%
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| Summary of stock option activity |
A summary of outstanding stock options as of September 30, 2020 and December 31, 2019 is presented below:
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September 30, 2020
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December 31, 2019
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Number of
Options
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Weighted‑
Average
Exercise
Price
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Number of
Options
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Weighted‑
Average
Exercise
Price
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Options outstanding, beginning of period
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7,245,350
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$
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4.68
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6,642,200
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$
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4.40
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Granted or deemed granted
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90,000
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$
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2.05
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636,683
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(a)
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$
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10.10
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Exercised
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—
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$
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—
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(167
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)
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$
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5.00
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Cancelled, forfeited and expired
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(62,087
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)
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$
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6.06
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(33,366
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)
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$
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11.29
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Options outstanding, end of period
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7,273,263
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$
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4.63
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7,245,350
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$
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4.68
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Options exercisable, end of period
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7,114,657
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$
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4.64
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7,001,680
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$
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4.47
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Options available for future grant
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2,139,237
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2,167,150
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(a)
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Upon the Merger, the exercise prices of outstanding EMI options and number of shares of the Company common stock underlying the options were adjusted based upon the exchange ratio in the Merger.
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| Convertible Promissory Note [Member] |
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| Schedule of change in fair value of warrants |
The following table presents the change in fair value of the warrants as of September 30, 2020 (in thousands):
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Warrants Derivative Liabilities - convertible promissory note
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September 30, 2020
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Balance, beginning of period
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$
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—
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Fair value at issuance date
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1,425
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Change in fair value included in the statement of comprehensive loss
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(687
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)
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Balance, end of period
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$
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738
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| Schedule of fair value based upon assumptions |
The fair value of the warrant derivative liabilities was determined using the Black-Scholes-Merton option pricing model based on upon following assumptions:
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September 30, 2020
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June 15, 2020 (modification date)
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Exercise price
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$
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2.05
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$
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2.05
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Stock price
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$
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0.97
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$
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1.68
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Risk‑free interest rate
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0.26
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%
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0.33
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%
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Expected volatility (peer group)
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99.00
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%
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94.00
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%
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Expected life (in years)
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4.71
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5.00
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Expected dividend yield
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0.00
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%
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0.00
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%
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Warrant shares
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1,250,000
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1,250,000
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| GPB Debt Holdings II, LLC [Member] |
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| Schedule of change in fair value of warrants |
The following table presents the change in fair value of the GPB Warrant as of September 30, 2020 and December 31, 2019 (in thousands):
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Nine Months Ended
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Year Ended
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Warrant Derivative Liabilities—GPB
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September 30, 2020
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December 31, 2019
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Balance, beginning of period
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$
|
38
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$
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1,399
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Change in fair value included in the statement of comprehensive income (loss)
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18
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(1,361
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)
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Balance, end of period
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$
|
56
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$
|
38
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| Schedule of fair value based upon assumptions |
The value as of the dates set forth in the table above was based on upon following assumptions:
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September 30, 2020
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December 31, 2019
|
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Stock price
|
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$
|
0.97
|
|
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$
|
1.97
|
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Risk‑free interest rate
|
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|
0.15
|
%
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1.64
|
%
|
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Expected volatility (peer group)
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114.00
|
%
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60.00
|
%
|
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Expected life (in years)
|
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2.75
|
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3.50
|
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Expected dividend yield
|
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|
0.00
|
%
|
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|
0.00
|
%
|
|
Number outstanding
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252,802
|
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252,802
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