|
During the three months ended
July 31, 2021, the Company issued warrants to purchase an aggregate of 727,917 shares of Common Stock at exercise prices ranging from
$3.00 to $6.25 per share.
| |
(i) |
On June 17 2021, the Company issued a warrant to purchase an aggregate of 61,250 shares of Common Stock at an exercise price equal to $6.25 per share of Common Stock in connection with the IPO. Based on the terms of the Company’s warrant agreement, the Company accounted for the warrant as an equity instrument as the warrant is indexed to the Company’s Common Stock, require settlement in shares and would be classified as equity under ASC 815. |
| |
(ii) |
On July 28, 2021 the Company received from the U.S. Food and Drug Administration a “Study May Proceed” letter for a Phase Ia study under the Company’s Investigational New Drug application for AL001. Based on the achievement of this milestone, the Company sold an additional 1,333,333 shares of its common stock to DPL for $2 million, or $1.50 per share, and issued to DPL warrants to acquire 666,667 shares of the Company’s common stock with an exercise price of $3.00 per share. Based on the terms of the Company’s warrant agreement, the Company accounted for the warrant as equity instrument as the warrant is indexed to the Company’s Common Stock, require settlement in shares and would be classified as equity under ASC 815. |
The following table summarizes
information about Common Stock warrants outstanding at July 31, 2021:
| Outstanding |
|
Exercisable |
|
| |
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Average |
|
|
Weighted |
|
|
|
|
|
Weighted |
|
| |
|
|
|
|
Remaining |
|
|
Average |
|
|
|
|
|
Average |
|
| Exercise |
|
Number |
|
|
Contractual |
|
|
Exercise |
|
|
Number |
|
|
Exercise |
|
| Price |
|
Outstanding |
|
|
Life (years) |
|
|
Price |
|
|
Exercisable |
|
|
Price |
|
| $1.00
|
|
|
500,000 |
|
|
|
2.6 |
|
|
$ |
1.00 |
|
|
|
500,000 |
|
|
$ |
1.00 |
|
| $1.75
|
|
|
175,672 |
|
|
|
3.3 |
|
|
$ |
1.75 |
|
|
|
175,672 |
|
|
$ |
1.75 |
|
| $3.00
|
|
|
8,093,863 |
|
|
|
3.4 |
|
|
$ |
3.00 |
|
|
|
8,093,863 |
|
|
$ |
3.00 |
|
| $6.25
|
|
|
61,250 |
|
|
|
4.9 |
|
|
$ |
6.25 |
|
|
|
61,250 |
|
|
$ |
6.25 |
|
| $1.00 - $6.25
|
|
|
8,830,785 |
|
|
|
3.3 |
|
|
$ |
2.88 |
|
|
|
8,830,785 |
|
|
$ |
2.88 |
|
The estimated fair value of
warrants granted during the three months ended July 31, 2021 and July 31, 2020, were calculated using the Black-Scholes option-pricing
model using the following assumptions:
| |
|
For the Three Months Ended July 31, |
| |
|
2021 |
|
2020 |
| Common stock price |
|
$8.74 - $10.09
|
|
$1.00 - $1.50
|
| Expected term (in years) |
|
5.00 |
|
2.50 |
| Volatility |
|
86.31% |
|
69.35% |
| Risk-free interest rate |
|
0.87% - 0.90% |
|
2.53% |
| Dividend yield |
|
0.0% |
|
0.0% |
Expected Term: The
expected term represents the period that the warrants granted are expected to be outstanding.
Expected Volatility: The
Company uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry
that were deemed to be representative of future stock price trends as the Company does not have trading history for its common stock.
The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own
stock price becomes available.
Risk-Free Interest Rate: The
Company based the risk-free interest rate over the expected term of the warrants based on the constant maturity rate of U.S. Treasury
securities with similar maturities as of the date of the grant.
Expected Dividend: The
Company has not paid and does not anticipate paying any dividends in the near future. Therefore, the expected dividend yield was zero.
|