Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' DEFICIT (Tables)

v3.21.2
STOCKHOLDERS' DEFICIT (Tables)
9 Months Ended
Sep. 30, 2021
Schedule of Fair Value Based upon Assumptions

The fair value as of September 30, 2021 and December 31, 2020 was based upon following assumptions:

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Principal outstanding (South Korean won)

 

KRW 30 billion

 

 

KRW 30 billion

 

Stock price

 

KRW 3,990

 

 

KRW 6,060

 

Expected life (in years)

 

 

9.04

 

 

 

9.79

 

Selected yield

 

 

10.50

%

 

 

10.50

%

Expected volatility (Telcon common stock)

 

 

82.15

%

 

 

85.80

%

Risk-free interest rate (South Korea government bond)

 

 

2.18

%

 

 

1.72

%

Expected dividend yield

 

 

 

 

 

 

Conversion price

 

KRW 4,110 (US$3.47)

 

 

KRW 6,028 (US$5.54)

 

Summary of outstanding warrants

A summary of all outstanding warrants as of September 30, 2021 and December 31, 2020 is presented below:

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Warrants outstanding, beginning of period

 

 

8,439,480

 

 

 

4,931,099

 

Granted

 

 

 

 

 

3,625,000

 

Exercised

 

 

 

 

 

 

Cancelled, forfeited or expired

 

 

(203,463

)

 

 

(116,619

)

Warrants outstanding, end of period

 

 

8,236,017

 

 

 

8,439,480

 

A summary of all outstanding warrants by year issued and exercise price as of September 30, 2021 is presented below:

 

 

 

 

 

 

Outstanding

 

 

Exercisable

 

Year issued and Exercise Price

 

 

Number of

Warrants

Issued

 

 

Weighted-Average

Remaining

Contractual

Life (Years)

 

 

Weighted-Average

Exercise

Price

 

 

Total

 

 

Weighted-Average

Exercise

Price

 

Prior to January 1, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$1.54-$36.24

 

 

 

4,611,017

 

 

 

1.39

 

 

$

9.14

 

 

 

4,611,017

 

 

$

9.14

 

Prior to Jan 1, 2020 Total

 

 

 

4,611,017

 

 

 

 

 

 

 

 

 

 

 

4,611,017

 

 

 

 

 

At December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2.05

 

 

 

1,250,000

 

 

 

3.71

 

 

$

2.05

 

 

 

 

 

 

 

 

$

1.54

 

 

 

2,375,000

 

 

 

3.95

 

 

$

1.54

 

 

 

2,375,000

 

 

$

1.54

 

 

2020 Total

 

 

 

3,625,000

 

 

 

 

 

 

 

 

 

 

 

2,375,000

 

 

 

 

 

At September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

 

Grand Total

 

 

 

8,236,017

 

 

 

 

 

 

Grand Total

 

 

 

6,986,017

 

 

 

 

 

 

Summary of stock option activity

A summary of outstanding stock options as of September 30, 2021 and December 31, 2020 is presented below.

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Number of

Options

 

 

Weighted‑

Average

Exercise

Price

 

 

Number of

Options

 

 

Weighted‑

Average

Exercise

Price

 

Options outstanding, beginning of period

 

 

7,110,025

 

 

$

4.63

 

 

 

7,245,350

 

 

$

4.68

 

Granted or deemed granted

 

 

 

 

 

 

 

 

90,000

 

 

$

2.05

 

Exercised

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled, forfeited and expired

 

 

(1,125,753

)

 

$

3.82

 

 

 

(225,325

)

 

$

5.08

 

Options outstanding, end of period

 

 

5,984,272

 

 

$

4.78

 

 

 

7,110,025

 

 

$

4.63

 

Options exercisable, end of period

 

 

5,948,771

 

 

$

4.80

 

 

 

6,986,268

 

 

$

4.47

 

Options available for future grant

 

 

 

(a)

 

 

 

 

 

2,302,475

 

 

 

 

 

 

 

(a)

Option plans were expired and therefore no options available for future grants.

Senior Secured Convertible Debentures [Member]  
Schedule of Fair Value Based upon Assumptions The fair value as of agreement date and the anti-dilution adjustment dates was based upon following assumptions:

 

 

March 2, 2021 (Anti-dilution adjustment date)

 

 

February 28, 2020 (Anti-dilution adjustment date)

 

 

February 21, 2020 (Amendment date)

 

Exercise price

 

$

1.54

 

 

$

2.00

 

 

$

3.00

 

Common stock fair value

 

$

1.52

 

 

$

1.60

 

 

$

1.89

 

Volatility

 

101.00%-120.00%

 

 

 

93.00

%

 

 

92.00

%

Risk-free rate

 

0.21%-0.58%

 

 

 

0.86

%

 

 

1.29

%

Expected life (in years)

 

2.64-4.56

 

 

 

3.54

 

 

 

3.56

 

Convertible Promissory Note [Member]  
Schedule of fair value of conversion feature liabilities

The following table presents the fair value and the change in fair value of the warrants as of September 30, 2021 and December 31, 2020 (in thousands):

 

 

Nine Months Ended

 

 

Year Ended

 

Warrant liability—Wealth Threshold

 

September 30, 2021

 

 

December 31, 2020

 

Balance, beginning of period

 

$

988

 

 

$

 

Fair value at issuance date

 

 

 

 

 

1,425

 

Change in fair value included in the statement of comprehensive income (loss)

 

 

362

 

 

 

(437

)

Balance, end of period

 

$

1,350

 

 

$

988

 

Schedule of Fair Value Based upon Assumptions

The fair value of the warrant derivative liability was determined using the Black-Scholes Merton model and was based upon following assumptions:

 

 

September 30, 2021

 

 

December 31, 2020

 

Exercise price

 

$

2.05

 

 

$

2.05

 

Stock price

 

$

1.60

 

 

$

1.68

 

Risk‑free interest rate

 

 

0.69

%

 

 

0.31

%

Expected volatility (peer group)

 

 

110.00

%

 

 

101.00

%

Expected life (in years)

 

 

3.71

 

 

 

4.46

 

Expected dividend yield

 

 

 

 

Number outstanding

 

 

1,250,000

 

 

 

1,250,000

 

 

GPB Debt Holdings II, LLC [Member]  
Schedule of fair value of conversion feature liabilities

The following table presents the change in fair value of the GPB Warrant as of September 30, 2021 and December 31, 2020 (in thousands):

 

 

Nine Months Ended

 

 

Year Ended

 

Warrant Liability—GPB

 

September 30, 2021

 

 

December 31, 2020

 

Balance, beginning of period

 

$

83

 

 

$

38

 

Change in fair value included in the statement of comprehensive income

 

 

(40

)

 

 

45

 

Balance, end of period

 

$

43

 

 

$

83

 

Schedule of Fair Value Based upon Assumptions

The fair value as of September 30, 2021, and December 31, 2020 set forth in the table above was based on upon following assumptions:

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Adjusted exercise price

 

$

10.28

 

 

$

10.28

 

Common stock fair value

 

$

1.60

 

 

$

1.23

 

Risk‑free interest rate

 

 

0.23

%

 

 

0.15

%

Volatility

 

 

100.00

%

 

 

120.00

%

Time until expiration (years)

 

 

1.75

 

 

 

2.50

 

Expected dividend yield

 

 

 

 

Number outstanding

 

 

252,802

 

 

 

252,802