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Note 6 - Warrants
3 Months Ended
Mar. 31, 2023
Notes to Financial Statements  
Warrants [Text Block]

Note 6. Warrants

 

We have certain warrants outstanding to purchase our common stock, at various prices, as described in the following table:

 

           

Weighted

     
           average  

Aggregate

 
  Warrants  Exercise  price per  

intrinsic

 
  outstanding  price per share  share  value(1) 

Balance, December 31, 2022

  49,023,398  $0.131.00  $0.26     

Granted

  7,512,000  0.210.29   0.25     

Expired

  (4,684,986

)

 0.190.35   0.21     

Balance, March 31, 2023

  51,850,412  $0.131.00  $0.26  $122,000 
                  

Balance, December 31, 2021

  36,765,562  $0.161.00  $0.27     

Granted

  10,393,936  0.200.25   0.22     

Expired

  (388,889

)

  0.22    0.22     

Balance, March 31, 2022

  46,770,549  $0.141.00  $0.29     

(1) – Aggregate intrinsic value based on closing common stock price of $0.20 at March 31, 2023.

 

Warrants issued in Unit Offerings

 

During the three months ended March 31, 2023, pursuant to our Unit Offerings (see Note 3), we issued six-month stock purchase warrants to purchase an aggregate 3,656,000 shares of our common stock at $0.228 per share, and five-year stock purchase warrants to purchase an aggregate 3,656,000 shares of our common stock at $0.285 per share.

 

During the three months ended March 31, 2022, pursuant to our 2020 Unit Offering (see Note 3), we issued six-month stock purchase warrants to purchase an aggregate 5,196,968 shares of our common stock at $0.204 per share, and five-year stock purchase warrants to purchase an aggregate 5,196,968 shares of our common stock at $0.25 per share.

 

Warrant issued in conjunction with amendment to note payable

 

On March 6, 2023, we entered into an agreement with the holder of a $50,000 note (see Note 4, “Convertible note payable, matures March 1, 2023”) to convert that note into common stock of BETI. As payment for interest, a warrant to purchase 200,000 shares of BioLargo common stock at $0.21 was issued to the investor, expiring five years from the grant date. The fair value of this warrant totaled $30,000 and was recorded as interest expense on our statement of operations.

 

Fair Value Interest Expense

 

To determine interest expense related to our outstanding warrants issued in conjunction with debt offerings, the fair value of each award grant is estimated on the date of grant using the Black-Scholes option pricing model and the relative fair values are amortized over the life of the warrant. For the determination of expense of warrants issued for services, extinguishment of debt and settlement management also uses the option-pricing model. The principal assumptions we used in applying this model were as follows:

 

  

2023

  

2022

 

Risk free interest rate

 3.884.27%  3.693.88%

 

Expected volatility

 4095%   40% 

 

Expected dividend yield

   —     —  

Forfeiture rate

   —     —  

Expected life in years

  35   3  

 

The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on historical volatility of our common stock. The expected life in years is based on the contract term of the warrant.