Note 17 – Common Stock Warrants

Warrants to purchase a total of 7,511,650 shares of common stock were outstanding as of December 31, 2020.

On various dates between April 14, 2020 and October 28, 2020, the Company received total proceeds of $1,502,330 from the sale of 150,233 units, consisting in the aggregate of 150,233 shares of Series A Preferred Stock and five-year warrants to purchase 7,511,650 shares of common stock at an exercise price of $0.25 per share to twenty-two accredited investors. The proceeds received were allocated between the Series A Preferred Stock and warrants on a relative fair value basis. The aggregate estimated value of the warrants using the Black-Scholes Pricing Model, based on a weighted average volatility rate of 305% and a weighted average call option value of $0.2882, was $2,164,995.

The following is a summary of information about our warrants to purchase common stock outstanding at December 31, 2020.

The fair value of each warrant grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

No warrants were issued during the year ended December 31, 2019. The weighted average fair value of warrants granted with exercise prices at the current fair value of the underlying stock during the year ended December 31, 2020 was approximately $0.25 per warrant.

The following is a summary of activity of outstanding common stock warrants:

Deemed Dividend Adjustment, Series A Preferred Stock

Per guidance of ASC 260, the Company recorded a deemed dividend of $1,502,330 related to the 7,511,650 warrants included with the Unit Offerings, consisting of the sale of the Series A Preferred Stock and common stock warrants. The value of the deemed dividend was capped at the fair value of the consideration received for the sale of the Unit Offerings.