Company: NDRA
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110887
Chunk: 32

Company: ENDRA Life Sciences Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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Use of Estimates

The preparation of the financial statements in
conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements
and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Management makes estimates that affect certain
accounts including inventory reserve, deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for
any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are
determined.

Warrant Liability

The Company accounts for the liability classified
warrants in accordance with the guidance contained in ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and
Hedging. Such guidance provides criteria for instruments do not meet the criteria for equity treatment thereunder. This liability is subject
to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with
the change in fair value recognized in the Company’s statement of operations.

Share-based Compensation

Our Omnibus Plan permits the grant of stock options
and other stock awards to our employees, consultants and non-employee members of our 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. On January 1, 2025, the pool of shares issuable under the Omnibus Plan automatically increased
by 178,033 shares from 1,738 shares to 179,771 shares. As of September 30, 2025, there were 32,336 shares of common stock remaining available
for issuance under the Omnibus Plan.

We record share-based compensation in
accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. The guidance requires the use of
option-pricing models that