Company: NDRA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110887
Chunk: 73

Company: ENDRA Life Sciences Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 73
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 liability in an orderly transaction between market participants at the measurement
date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

    ●
    Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

    ●
    Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

    ●
    Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial assets are considered Level 3 when their
fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant
model assumption or input is unobservable.

The carrying amounts of the Company’s financial
assets and liabilities, including cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities,
approximate their fair values because of the short maturity of these instruments. The fair value of notes payable and convertible notes
approximates their fair values since the current interest rates and terms on these obligations are the same as prevailing market rates.

Share-based Compensation

The Company’s 2016 Omnibus Incentive Plan
(the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee
members of the board of directors. Each January 1 the pool of shares available for issuance under the Omnibus Plan automatically increases
by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus
Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares
of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares)
and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. Effective January 1, 202