Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity (Deficit)

v3.23.2
Stockholders' Equity (Deficit)
 6 Months Ended
Jun. 30, 2023
Stockholders' Equity Note [Abstract]  
Stockholders' Equity (Deficit)

NOTE 13 — STOCKHOLDERS’ EQUITY (DEFICIT)

On June 16, 2023, in satisfaction of its obligations to issue the warrant to K2HV’s affiliated holder pursuant to the CVR Agreement, as further described in Note 8 “Borrowing Arrangements and Debt Extinguishment,” the Company issued a warrant to purchase up to 5,103,343 shares of the Company’s common stock at an exercise price of $0.3919 per share. The warrant is exercisable upon issuance and have a term of ten years. The Company determines whether the warrant should be classified as a liability or equity according to ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. Upon issuance of the outstanding warrants, the Company determined that equity classification was appropriate. For warrants classified as equity, the Company records the value of the warrants in additional paid-in capital on the condensed consolidated balance sheet. As of June 30, 2023, there were 5,103,343 warrants issued related to the CVR Agreement. On June 16, 2023, the warrant was valued at $2.3 million using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model inputs used were: expected dividend yield of 0%, expected volatility of 80%, risk free interest rate of 3.77%, and expect term of 10.0 years.