Enveric Biosciences, Inc. Fair Value Disclosure
NOTE 11. FAIR VALUE
The following table provides the financial liabilities measured on a recurring basis and reported at fair value on the balance sheet as of December 31, 2024 and 2023, and indicates the fair value of the valuation inputs the Company utilized to determine such fair value of warrant liabilities and investment options:
| Level | December 31, 2024 | December 31, 2023 | ||||||||
| Warrant liabilities - January 2021 Warrants | 3 | $ | $ | 4 | ||||||
| Warrant liabilities - February 2021 Warrants | 3 | 4 | ||||||||
| Warrant liabilities - February 2022 Warrants | 3 | 1,100 | 25,462 | |||||||
| Fair value of warrant liability | $ | 1,100 | $ | 25,470 | ||||||
| Level | December 31, 2024 | December 31, 2023 | ||||||||
| Wainwright investment options | 3 | $ | 1,988 | $ | 23,608 | |||||
| Fair value of investment option liability | $ | 1,988 | $ | 23,608 | ||||||
The warrant liabilities and investment options are all classified as Level 3, for which there is no current market for these securities such as the determination of fair value requires significant judgment or estimation. Changes in fair value measurement categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded within other income (expense) on the consolidated statements of operations and comprehensive loss
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Subsequent measurement
The following table presents the changes in fair value of the warrant liabilities, derivative liability, and investment options that are classified as Level 3:
| Total Warrant Liabilities | ||||
| Fair value as of December 31, 2022 | $ | 185,215 | ||
| Exercise of warrants | (65,349 | ) | ||
| Change in fair value | (94,396 | ) | ||
| Fair value as of December 31, 2023 | $ | 25,470 | ||
| Change in fair value | (24,370 | ) | ||
| Fair value as of December 31, 2024 | $ | 1,100 | ||
| Total Derivative Liability | ||||
| Fair value as of December 31, 2022 | $ | 727,000 | ||
| Change in fair value arising from redemption of Akos Series A Preferred Stock - See Note 9 | (727,000 | ) | ||
| Redemption of Series A Preferred Stock | ||||
| Fair value as of December 31, 2023 | $ | |||
There was no activity related to the derivative liability during the year ended December 31, 2024.
| Total Investment Options | ||||
| Fair value as of December 31, 2022 | $ | 851,008 | ||
| Change in fair value | (208,752 | ) | ||
| Exercise of investment options | (618,648 | ) | ||
| Fair value of investment option liability as of December 31, 2023 | $ | 23,608 | ||
| Change in fair value | (21,620 | ) | ||
| Fair value of investment option liability as of December 31, 2024 | $ | 1,988 | ||
The key inputs into the Black Scholes valuation model for the Level 3 valuations of the warrant liabilities as of December 31, 2024 are below:
| January 2021 Warrants | February 2021 Warrants | February 2022 Warrants | ||||||||||
| Term (years) | 1.0 | 1.1 | 2.1 | |||||||||
| Stock price | $ | 5.38 | $ | 5.38 | $ | 5.38 | ||||||
| Exercise price | $ | 3,712.50 | $ | 3,675.00 | $ | 412.50 | ||||||
| Dividend yield | % | % | % | |||||||||
| Expected volatility | 90.0 | % | 90.0 | % | 106.0 | % | ||||||
| Risk free interest rate | 4.20 | % | 4.20 | % | 4.30 | % | ||||||
| Number of warrants | 2,429 | 2,286 | 22,534 | |||||||||
| Value (per share) | $ | $ | $ | 0.003 | ||||||||
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The key inputs into the Black Scholes valuation model for the Level 3 valuations of the warrant liabilities as of December 31, 2023 are below:
| January 2021 Warrants | February 2021 Warrants | February 2022 Warrants Unmodified | ||||||||||
| Term (years) | 2.0 | 2.1 | 3.1 | |||||||||
| Stock price | $ | 19.50 | $ | 19.50 | $ | 19.50 | ||||||
| Exercise price | $ | 3,712.50 | $ | 3,675.00 | $ | 412.50 | ||||||
| Dividend yield | % | % | % | |||||||||
| Expected volatility | 89.0 | % | 88.0 | % | 87.0 | % | ||||||
| Risk free interest rate | 4.20 | % | 4.20 | % | 4.00 | % | ||||||
| Number of warrants | 2,429 | 2,286 | 22,534 | |||||||||
| Value (per share) | $ | 0.00 | $ | 0.00 | $ | 1.20 | ||||||
The key inputs into the Black Scholes valuation model for the Level 3 valuations of the investment options as of December 31, 2024 are below:
| H.C. Wainwright & Co., LLC Options | ||||
| Term (years) | 2.6 | |||
| Stock price | $ | 5.38 | ||
| Exercise price | $ | 150.00 | ||
| Dividend yield | % | |||
| Expected volatility | 108.0 | % | ||
| Risk free interest rate | 4.30 | % | ||
| Number of investment options | 4,667 | |||
| Value (per share) | $ | 0.03 | ||
The key inputs into the Black Scholes valuation model for the Level 3 valuations of the investment options as of December 31, 2023 are below:
| H.C. Wainwright & Co., LLC Options | ||||
| Term (years) | 3.6 | |||
| Stock price | $ | 19.50 | ||
| Exercise price | $ | 150.00 | ||
| Dividend yield | % | |||
| Expected volatility | 94.0 | % | ||
| Risk free interest rate | 4.0 | % | ||
| Number of investment options | 4,667 | |||
| Value (per share) | $ | 5.10 | ||
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 28, 2025 | Showing above |
| 2019 | Mar 25, 2020 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.