6. Warrants

On May 1, 2020, the Company issued warrants to the former sole shareholder of Noachis Terra Inc. (“NTI”) in connection with the Company’s acquisition of NTI (the “NTI Warrants”). The NTI Warrants are exercisable at $1.25 per share, and have a five-year term. The NTI Warrants may not be exercised until the Company has obtained shareholder approval with respect to the exercisability of the NTI Warrants pursuant to the New York Stock Exchange American (“NYSE”) requirements. In addition, the NTI Warrants may not be exercised until the earlier of (a) notification of BARDA’s willingness to fund development of the TerraCoV2 vaccine product candidate, (b) Phase 1 clinical results demonstrating activity, or (c) the first anniversary of the issuance of the NTI Warrants.  See Note 4. Acquisition.

In addition to the above consideration, Mr. Hernandez is entitled to receive contingent consideration based upon the exercise of certain of the Company’s outstanding warrants as follows: (i) twenty percent (20%) of the cash proceeds received by the Company upon exercise of the Company’s warrants carrying an exercise price of $0.75 and $0.90 and (ii) forty-five percent (45%) of the cash proceeds received by the Company upon exercise of the Company’s warrants carrying an exercise price of $1.00, in each case, for so long as the warrants remain outstanding.

On March 25, 2019, the Company announced the closing of an underwritten public offering for gross proceeds of approximately $12.5 million, which included the partial exercise of the underwriter’s over-allotment option to purchase additional shares and warrants, prior to deducting underwriting discounts and commissions and offering expenses payable by the Company.

The offering was comprised of 16,666,668 shares of common stock, short-term warrants to purchase up to 8,333,334 shares of common stock, and long-term warrants to purchase up to 8,333,334 shares of common stock, at a price to the public of $0.75 per share and accompanying warrants. The Company granted the underwriter a 30-day option to purchase up to 2,500,000 additional shares of common stock and/or short-term warrants to purchase 1,250,000 shares of common stock and long-term warrants to purchase 1,250,000 shares of common stock of the Company at the public offering price, less underwriting discounts and commissions. The underwriter exercised its option to purchase the short-term warrants to purchase 1,250,000 shares of common stock and long-term warrants to purchase 1,250,000 shares of common stock effective as of the closing.

Each short-term warrant had an exercise price of $0.75 per share of common stock, is immediately exercisable, and were subject to expiration on the earlier of (1) the eighteen-month anniversary of the date of issuance and (2) twenty-one trading days following the Company’s release of top-line data related to its Phase 2 double blind, placebo controlled clinical trial of AG013. Each long-term warrant has an exercise price of $0.90 per share of common stock, is immediately exercisable and expire five years following the date of issuance.

On April 15, 2020, 38,000 of the short-term warrants were exercised generating $28,500 in cash proceeds to the Company. On April 15, 2020, the Company announced the top-line data related to its Phase 2 double blind, placebo controlled clinical trial of AG013. As a result, 9,545,334 of the short-term warrants expired by their terms on May 14, 2020. As of June 30, 2020, there were no short-term warrants outstanding.

A summary of warrant activity for the year ended December 31, 2019 and the three and six months ended June 30, 2020 is as follows:

The warrants outstanding as of June 30, 2020 are as follows:

All outstanding warrants are classified as equity on the Company’s Consolidated Balance Sheets.

See Note 10. Subsequent Events for information on recent exercises of certain outstanding warrants.