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.
SCHEDULE
OF POTENTIALLY DILUTIVE SECURITIES
| | |
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:
SCHEDULE
OF FAIR VALUE HIERARCHY OF VALUATION INPUTS ON RECURRING BASIS
| | |
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 | |
| Warrant liabilities - fair value | |
| | | |
$ | 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 | | |
$ | — | |
| Derivative liability - fair value | |
| | | |
$ | 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:
SCHEDULE
OF FAIR VALUE OF WARRANT LIABILITIES AND 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:
SCHEDULE
OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES AND INVESTMENT OPTIONS
| | |
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 |
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 | |
|