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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Sep. 30, 2022
SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021 because the effect of their inclusion would have been anti-dilutive.

 

   For the three and
nine months ended
September 30, 2022		   For the three and
nine months ended
September 30, 2021		 
Warrants to purchase shares of common stock   655,463    211,534 
Restricted stock units - vested and unissued   61,428    — 
Restricted stock units - unvested   65,117    115,504 
Restricted stock awards - vested and unissued   974    — 
Restricted stock awards - unvested   —    578 
Investment options to purchase shares of common stock   1,070,000    — 
Options to purchase shares of common stock   22,829    22,947 
Total potentially dilutive securities   1,875,811    350,563 
SCHEDULE OF FAIR VALUE HIERARCHY OF VALUATION INPUTS ON RECURRING BASIS

The following table provides the financial liabilities measured on a recurring basis and reported at fair value on the balance sheet as of September 30, 2022 and indicates the fair value of the valuation inputs the Company utilized to determine such fair value of warrant liabilities, derivative liability, and investment options:

  

   Level   September 30, 2022   December 31, 2021 
Warrant liabilities - January 2021 Warrants   3   $1,011   $333,471 
Warrant liabilities - February 2021 Warrants   3    1,101    320,203 
Warrant liabilities - February 2022 Warrants   3    652,825    — 
Fair value as of September 30, 2022       $654,937   $653,674 

 

   Level   September 30, 2022   December 31, 2021 
Derivative liability - May 2022   3   $686,000   $— 
Fair value as of September 30, 2022      $686,000   $— 

 

   Level   September 30, 2022   December 31, 2021 
Wainwright investment options   3   $139,314   $— 
RD investment options   3    890,549    — 
PIPE investment options   3    1,484,249    — 
Fair value as of September 30, 2022       $2,514,112   $— 
SCHEDULE OF FAIR VALUE OF WARRANT LIABILITIES AND DERIVATIVE LIABILITY AND INVESTMENT OPTIONS

The following table presents the changes in fair value of the warrant liabilities, derivative liability, and investment options:

 

   Total Warrant Liabilities 
Fair value as of December 31, 2021  $653,674 
Issuance of February 2022 warrants   3,595,420 
Issuance   3,595,420 
Change in fair value due to modification of February 2022 warrants as part of July 2022 raise   251,357 
Change in fair value   (3,845,514)
Fair value as of September 30, 2022  $654,937 

 

   Total Derivative Liability 
Fair value as of December 31, 2021  $— 
Issuance of May 2022 convertible preferred stock   402,000 
Change in fair value   284,000 
Fair value as of September 30, 2022  $686,000 

 

   Total Investment Options 
Fair value as of December 31, 2021  $— 
Issuance of July 2022 investment options   4,323,734 
Change in fair value   (1,809,622)
Fair value as of September 30, 2022  $2,514,112 
Initial Measurement [Member]  
SCHEDULE OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES AND INVESTMENT OPTIONS

The Company established the initial fair value of its warrant liabilities at the respective dates of issuance. The Company used a Black Scholes valuation model in order to determine their value. The key inputs into the Black Scholes valuation model for the initial valuations of the warrant liabilities are below:

 

   February 2022 Warrants   February 2022 Post-Modification Warrants 
   February 15, 2022   July 26, 2022 
Term (years)   5.0    5.5 
Stock price  $15.75   $6.33 
Exercise price  $27.50   $7.78 
Dividend yield   —%   —%
Expected volatility   74.1%   80.0%
Risk free interest rate   1.9%   2.9%
         
Number of warrants   460,000    122,000 
Value (per share)  $8.00   $4.07 

 

The Company established the initial fair value of its derivative liability at the respective date of issuance. The Company used a Weighted Expected Return valuation model in order to determine their value. The key inputs into the Weighted Expected Return valuation model for the initial valuations of the warrant liabilities are below:

 

   May 2022 Derivative Liability 
   May 5, 2022 
Principal  $1,000,000 
Dividend rate   5.0%
Market rate   4.4%

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company established the initial fair value of its investment options at the respective dates of issuance. The Company used a Black Scholes valuation model in order to determine their value. The key inputs into the Black Scholes valuation model for the initial valuations of the investment options are below:

 

   Wainwright Options   RD Options   PIPE Options 
   July 26, 2022   July 26, 2022   July 26, 2022 
Term (years)   5.0    5.5    5.5 
Stock price  $6.33   $6.33   $6.33 
Exercise price  $10.00   $7.78   $7.78 
Dividend yield   —%   —%   —%
Expected volatility   80.0%   80.0%   80.0%
Risk free interest rate   2.9%   2.9%   2.9%
                
Number of investment options   70,000    375,000    625,000 
Value (per share)  $3.60   $4.07   $4.07 
Subsequent Measurement [Member]  
SCHEDULE OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES AND INVESTMENT OPTIONS

 

   January 2021 Warrants   February 2021 Warrants   February 2022 Warrants   February 2022 Post-Modification Warrants 
Term (years)   3.3    3.4    4.4    5.3 
Stock price  $4.22   $4.22   $4.22   $4.22 
Exercise price  $247.50   $245.00   $27.50   $7.78 
Dividend yield   —%   —%   —%   —%
Expected volatility   78.0%   78.0%   80.0%   79.0%
Risk free interest rate   4.20%   4.20%   4.10%   4.00%
                     
Number of warrants   36,429    34,281    338,000    122,000 
Value (per share)  $0.03   $0.03   $1.07   $2.37 

 

The key inputs into the Weighted Expected Return valuation model for the Level 3 valuations of the derivative liability as of September 30, 2022 are below:

 

   May 2022 Derivative Liability 
Principal  $1,000,000 
Dividend rate   5.0%
Market rate   6.8%

 

The key inputs into the Black Scholes valuation model for the Level 3 valuations of the investment options as of September 30, 2022 are below:

 

   Wainwright Options   RD Options   PIPE Options 
Term (years)   4.8    5.3    5.3 
Stock price  $4.22   $4.22   $4.22 
Exercise price  $10.00   $7.78   $7.78 
Dividend yield   —%   —%   —%
Expected volatility   78.0%   79.0%   79.0%
Risk free interest rate   4.10%   4.00%   4.00%
                
Number of investment options   70,000    375,000    625,000 
Value (per share)  $1.99   $2.37   $2.37