Warrant Liability

12 Months Ended

Dec. 31, 2021

Warrant Liability.

Warrant Liability

8. Warrant Liability

During 2016 and 2017, the Company closed a sale of shares of the Company’s common stock, the issuance of warrants to purchase shares of common stock, and the issuance of warrants to the placement agent for each transaction. Due to a cash put provision within the warrant agreement, which could be enacted in certain change in control events, a liability associated with those 1,044,396 warrants were initially recorded at fair value and subsequently re-measured each reporting period. The changes in the fair value between issuance and the end of each reporting period is recorded as a component of other income (expense), net in the consolidated statements of operations.

During 2017, the holders of 952,184 warrants agreed to a modification of the term which removed the cash put provision. The remaining 92,212 warrants continue to be re-measured at each reporting period as long as they are outstanding and un-modified. In February of 2022, the remaining 92,212 warrants expired unexercised.

The Company has re-measured the liability for the remaining outstanding warrants to their estimated fair value using the Black-Scholes option pricing model with the following weighted average assumptions:

	Assumptions for Estimating Fair Value
	on Reporting Dates of:
	December 31,			December 31,
	2021			2020
Risk-free interest rate		0.05	%		0.12	%
Expected volatility		174.54	%		137.89	%
Expected term (in years)		0.1	years		1.1	years
Expected dividend yield		—			—
Exercise Price	$	8.00		$	8.00
Market value of common stock	$	2.30		$	1.25

The following table presents a reconciliation of the Company’s warrant liabilities for the years ended December 31, 2021 and 2020:

	Warrant Liability
	(in thousands)
Balance as of December 31, 2019	$	33
Change in fair value upon re-measurement		(16)
Balance as of December 31, 2020		17
Change in fair value upon re-measurement		(15)
Balance as of December 31, 2021	$	2