Note 15. Warrants

On November 1, 2017, the Company issued seven warrants to officers, directors, and investors for the purchase of up to three million shares of common stock at $1.00 per share. Six of the warrants expired on November 1, 2022 at 5:00 PM Eastern Standard Time. A warrant for one million shares of common stock expires on November 1, 2027 at 5:00 PM Eastern Standard Time. The warrants contain participation rights to any registration statement filed by the Company.

On February 1, 2021, the Company issued warrants to four directors of the Company (Mark Gilroy, Michael Hawkins, Paul Rosenberg, and Robert Adams) for the purchase of up to a total consolidated 500,000 shares of common stock at $2.21 per share. Each warrant holder was authorized to purchase up to 125,000 shares of common stock. Under the vesting schedule, 50,000 shares vested upon signing and 25,000 vest per year for three consecutive years. Mr. Gilroy’s and Mr. Rosenberg’s warrants expired on December 21, 2021 and January 23, 2022, respectively, which was three months after they left the board. The remaining warrants expire on January 31, 2026 at 5:00 PM Eastern Standard Time.

On March 11, 2021, the Company issued warrants to three officers of the Company (Robert Adams, Eric Jaffe, and Michael Hawkins) for the purchase of up to a total consolidated 600,000 shares of common stock at $2.21 per share. Each warrant holder was authorized to purchase up to 200,000 shares of common stock. Under the vesting schedule, 50,000 shares vested upon signing and 50,000 vest per year for three consecutive years. The warrants expire on March 10, 2026 at 5:00 PM Eastern Standard Time.

On June 21, 2021, the Company issued a warrant to one officer of the Company (Cedric Harris) for the purchase of up to a total of 200,000 shares of common stock at $5.25 per share. Under the vesting schedule, 50,000 shares vested upon signing and 50,000 vest per year for three consecutive years. The warrants expire on June 20, 2026 at 5:00 PM Eastern Standard Time.

On July 31, 2021, the Company issued warrants to two officers of the Company (Toney Jennings and Brandon Hart) for the purchase of up to a total of 400,000 shares of common stock at $5.05 per share. Each warrant holder was authorized to purchase up to 200,000 shares of common stock. Under the vesting schedule, 50,000 shares vested upon signing and 50,000 vest per year for three consecutive years. The warrants expire on July 30, 2026 at 5:00 PM Eastern Standard Time.

On September 15, 2021, the Company issued a warrant to one director of the Company (Richard Schaeffer) for the purchase of up to a total of 200,000 shares of common stock at $6.40 per share. Under the vesting schedule, 50,000 shares vested upon signing and 50,000 vest per year for three consecutive years. The warrant expires on September 14, 2026 at 5:00 PM Eastern Standard Time.

On September 20, 2021, the Company issued a warrant to one director of the Company (Thomas Amon) for the purchase of up to a total of 125,000 shares of common stock at $6.80 per share. Under the vesting schedule, 50,000 shares vested upon signing and 25,000 vest per year for three consecutive years. The warrant expires on September 19, 2026 at 5:00 PM Eastern Standard Time.

On September 20, 2021, the Company issued a warrant to a consultant of the Company (Sophie Grinevald) for the purchase of up to a total of 200,000 shares of common stock at $6.40 per share. Under the vesting schedule, 50,000 shares vested upon signing and 50,000 vest per year for three consecutive years. The warrant expires on September 19, 2026 at 5:00 PM Eastern Standard Time.

On September 22, 2021, the Company issued a warrant to one officer of the Company (Bill Regan) for the purchase of up to a total of 400,000 shares of common stock at $6.40 per share. Under the vesting schedule, 100,000 shares vested upon signing and 100,000 vest per year for three consecutive years. The warrant expires on September 21, 2026 at 5:00 PM Eastern Standard Time.

On September 30, 2021, the Company issued a warrant to Myosin, Inc. for the purchase of up to a total of 100,000 shares of common stock at $7.00 per share. Under the vesting schedule, all of the shares vested upon signing. The warrant was subsequently cancelled.

On October 21, 2021, the Company issued a warrant to a stockholder of the Company for the purchase of up to a total of 6,000 shares of common stock at $9.00 per share. Under the vesting schedule, all of the shares vested upon signing. The warrant expires on October 20, 2026 at 5:00 PM Eastern Standard Time.

On January 11, 2022, the Company issued a warrant to an employee of the Company (Jessica Hunt) for the purchase of up to a total of 125,000 shares of common stock at $6.00 per share. Under the vesting schedule, 50,000 shares vested upon signing and 25,000 vest per year for three consecutive years. The warrant expired on June 15, 2022, which was three months after she left the Company..

On April 19, 2022, two warrants were exercised for a total of 500,000 shares of common stock resulting in the Company receiving $0.5 million.

On April 19, 2022, the holder of the 250,000 shares of Series C Preferred Stock received a warrant to purchase 25,000 shares of common stock at the price of $9.00 per share.

On June 3, 2022, the Law Offices of Carl G. Hawkins exercised their warrant acquiring 35,000 shares at the exercise price of $1.00 per share through the conversion of the accounts payable owed by the Company for services provided. The shares were issued in the name of Carl G. Hawkins.

On October 31, 2022, two warrants were exercised for a total of 250,000 shares of common stock, resulting in the Company having a receivable for $0.2 million. Since the receivable is from a stockholder, it is recorded as a contra-equity account.

A summary of warrant activity for years ended January 31, 2023 and January 31, 2022 is as follows:

During the year ended January 31, 2023, stock-based compensation expense related to warrant grants was $2,556,000, which consisted of grants to employees of $1,399,000, directors of $893,000, and consultants of $264,000. During the year ended January 31, 2022, stock-based compensation expense related to warrant grants was $1,647,000, which consisted of grants to employees of $735,000, directors of $759,000, and consultants of $153,000.