Note 4 - Warrants
|3 Months Ended|
Mar. 31, 2021
|Notes to Financial Statements|
|Warrants Disclosure [Text Block]||
Liability Classified Warrants
The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date. The risk-free interest rate assumption is based upon observed interest rates on zero coupon US Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants. Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants. Beginning in 2020, only the volatility of the Company's own stock is used in the BSM as it now has sufficient historic data in its stock price.
The assumptions used in determining the fair value of the liability classified warrants are as follows:
A summary of the Company's liability classified warrant activity during the three months ended March 31, 2021 and related information follows:
For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2021, see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.
Equity Classified Warrants
At March 31, 2021 and December 31, 2020, respectively, the Company had 109,639 equity classified warrants outstanding and 85,472 warrants were exercisable.
There was no stock compensation expense for non-employee agreements equity classified warrants for the three months ended March 31, 2021 and 2020, respectively and $124,000 of unrecognized stock compensation expense related to the Company's equity-classified warrants.