UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended:
OR
For the transition period from ___ to ___
Commission
File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip code) |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was
required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 12, 2025, the Registrant had shares of Common Stock (par value $ per share) outstanding.
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Other assets: | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Total other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Due to related parties | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Mezzanine equity | ||||||||
| Series C redeemable preferred stock, $ par value, shares authorized, and shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | ||||||||
| Total mezzanine equity | ||||||||
| Shareholders’ equity | ||||||||
| Preferred stock, $ par value, shares authorized; Series B preferred stock, $ par value, shares authorized, shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | ||||||||
| Common Stock, $ par value, shares authorized, and shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities, mezzanine equity, and shareholders’ equity | $ | $ | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 1 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Other (expense) income | ( | ) | ||||||||||||||
| Interest income (expense), net | ( | ) | ||||||||||||||
| Total other income (expense) | ( | ) | ||||||||||||||
| Net loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income tax expense | ( | ) | ||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Less deemed dividend on inducement of warrants | ||||||||||||||||
| Net loss attributable to shareholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency translation | ( | ) | ||||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share - basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding, basic and diluted | ||||||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 2 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 | ||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||
| Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholders’Equity | |||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of Common Stock and Series A and B and prefunded warrants for cash, net of offering costs of $ | ||||||||||||||||||||||||
| Issuance of common shares for vested RSAs | ( | ) | ||||||||||||||||||||||
| Issuance of common shares for exercise of warrants | ||||||||||||||||||||||||
| Issuance of round up shares | ( | ) | ||||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||||||
| Foreign exchange translation loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | ( | ) | ( | ) | $ | |||||||||||||||||||
| Issuance of common shares for cash pursuant to ATM Agreement, net of offering costs of $ | ||||||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||||||
| Foreign exchange translation gain | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2025 | ( | ) | ( | ) | $ | |||||||||||||||||||
| Issuance of common shares for cash pursuant to ATM Agreement, net of offering costs of $ | ||||||||||||||||||||||||
| Exercise of Series A and B Warrants for common shares, net of offering costs of $ | ||||||||||||||||||||||||
| Deemed dividend on inducement of warrants of $ | — | |||||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||||||
| Foreign exchange translation loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 3 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 | ||||||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-In Capital | Subscription Receivable | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | ||||||||||||||||||||||
| Balance at January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Common Stock sold under the Equity Distribution Agreement, net of offering costs of $ | ||||||||||||||||||||||||||||
| Issuance of direct offering shares | ||||||||||||||||||||||||||||
| Exercise of Inducement Warrants for Common Stock | ||||||||||||||||||||||||||||
| Proceeds from the subscription receivable related to the issuance of Inducement Warrants, net of offering costs of $ | — | ( | ) | |||||||||||||||||||||||||
| Proceeds from the subscription receivable related to the exercise of warrants and preferred investment options and issuance of Common Stock in abeyance | ( | ) | ||||||||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||||||||||
| Foreign exchange translation gain | — | |||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||
| Common Stock sold under the Purchase Agreement, net of offering costs of $ | ( | ) | ||||||||||||||||||||||||||
| Issuance of direct offering shares | ||||||||||||||||||||||||||||
| Issuance of common shares for vested RSU | ||||||||||||||||||||||||||||
| Foreign exchange translation loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at June 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||
| Common Stock sold under the Purchase Agreement, net of offering costs of $ | ||||||||||||||||||||||||||||
| Issuance of common shares for vested RSU | ( | ) | ||||||||||||||||||||||||||
| Foreign exchange translation gain | — | |||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 4 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Change in fair value of investment option liability | ( | ) | ( | ) | ||||
| Stock-based compensation | ||||||||
| Amortization of intangibles | ||||||||
| Depreciation expense | ||||||||
| Other | ( | ) | ||||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable, accrued expenses and other current liabilities | ( | ) | ( | ) | ||||
| Due to related parties | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Proceeds from sale of Common Stock and warrants, net of offering costs | ||||||||
| Proceeds from Common Stock sold for cash pursuant to the ATM Agreement, net of offering costs | ||||||||
| Proceeds from the exercise of warrants, net of offering costs | ||||||||
| Proceeds from the subscription receivable related to the issuance of Inducement Warrants and the exercise of warrants and preferred investment options | ||||||||
| Proceeds from Common Stock sold under the Equity Distribution Agreement, net of offering costs | ||||||||
| Proceeds from Common Stock sold under the Purchase Agreement, net of offering costs | ||||||||
| Payment for offering costs previously accrued | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange rate on changes on cash | ( | ) | ||||||
| Net increase in cash | ||||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow transactions: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash financing and investing activities: | ||||||||
| Non-cash issuance of round-up shares | $ | $ | ||||||
| Non-cash issuance of RSA vested shares | $ | $ | ||||||
| Offering costs accrued not paid | $ | $ | ||||||
| Deferred offering costs not paid | $ | $ | ||||||
| Deemed dividend on inducement of warrants | $ | $ | ||||||
| Issuance of Placement Agent Warrants as offering costs | $ | $ | ||||||
| Issuance of common shares for offering costs | $ | $ | ||||||
| Deferred offering costs charged to offering costs | $ | $ | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 5 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BUSINESS AND LIQUIDITY AND OTHER UNCERTAINTIES
Nature of Operations
Enveric Biosciences, Inc. (“Enveric” or the “Company”) is a biotechnology company focused on developing next-generation, small-molecule neuroplastogenic therapeutics that address unmet needs in psychiatric and neurological disorders. The head office of the Company is located in Cambridge, Massachusetts. The Company has the following wholly-owned subsidiaries: Jay Pharma Inc. (“Jay Pharma”), 1306432 B.C. Unlimited Liability Company, 1236567 B.C. Unlimited Liability Company, MagicMed USA, Inc. (“MagicMed”), Enveric Biosciences Canada Inc., Akos Biosciences, Inc. (“Akos”), and Enveric Therapeutics, Pty. Ltd. (“Enveric Therapeutics”).
Enveric’s lead candidate, EB-003, is the first known compound designed to selectively engage both 5-HT2A and 5-HT1B receptors with the potential to deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience. By leveraging a differentiated drug discovery platform and a growing library of patent protected chemical structures, Enveric is advancing a pipeline of novel compounds designed to promote neuroplasticity without hallucinogenic effects. Previously, Enveric was developing the EVM201 Series, and its lead drug candidate EB-002 (formerly EB-373), for the treatment of neuropsychiatric disorders. The EVM201 series comprised next generation synthetic prodrugs of the active metabolite, psilocin. In the fourth quarter of 2024, Enveric out-licensed the EVM201 Series program to MycoMedica Life Sciences, who will seek to develop, manufacture, and commercialize EB-002, in exchange for certain development and milestone payments to Enveric.
The Company unveiled an EVM401 Series on February 25, 2025, which is intended to broaden its pipeline with additional non-hallucinogenic molecules and strengthen the Company’s ability to target addiction and neuropsychiatric disorders for patients with limited options. While the Company intends to pursue development of the EVM401 Series, its primary focus is to develop its lead asset EB-003 in the EVM301 Series. The Company’s next step is to advance EB-003 into formal preclinical development studies in support of a future Investigational New Drug (“IND”) filing.
Reverse Stock Splits
The
Company effected a
The
Company effected a
Going Concern, Liquidity and Other Uncertainties
The
Company has incurred losses since inception resulting in an accumulated deficit of $
| 6 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In
assessing the Company’s ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate
sufficient cash flow in the future to support its operating and capital expenditure commitments. At September 30, 2025, the Company had
cash of $
As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date of the unaudited condensed consolidated financial statements are issued. The Company’s unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principal of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. Management’s opinion is that all adjustments (consisting of normal accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024, and related notes thereto included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025.
The Company’s significant accounting policies and recent accounting standards are summarized in Note 2 of the Company’s consolidated financial statements for the year ended December 31, 2024. There were no significant changes to these accounting policies during the three and nine months ended September 30, 2025.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and expenses during the periods reported. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include determining the fair value of transactions involving Common Stock, the valuation of warrants, the valuation of stock-based compensation and accruals associated with third party providers supporting research and development efforts. Actual results could differ from those estimates.
Reclassification
Certain reclassifications have been made to the prior period’s unaudited condensed consolidated financial statements in order to conform to the current year presentation. In the prior year, the Company included certain consulting expenses within general and administrative expenses on the unaudited condensed consolidated statements of operations. These expenses were reclassified to research and development expenses in the current year. Additionally, the Company has reclassified investment option liability and warrant liability to accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets and change in fair value of investment option liability and warrant liability to other income on the unaudited condensed consolidated statements of operations in the current year. These reclassifications had no effect on the Company’s previously reported results of operations, changes in equity, or cash flows.
Foreign Currency Translation
From inception through September 30, 2025, the reporting currency of the Company was the United States dollar while the functional currency of certain of the Company’s subsidiaries was the Canadian dollar or the Australian dollar. For the reporting periods ended September 30, 2025 and 2024, the Company engaged in a number of transactions denominated in Canadian dollars and Australian dollars. As a result, the Company is subject to exposure from changes in the exchange rates of the Canadian dollar and Australian dollar against the United States dollar.
The Company translates the assets and liabilities of its Canadian subsidiaries and Australian subsidiary into the United States dollar at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during each monthly period. Unrealized translation gains and losses are recorded as foreign currency translation gain (loss), which is included in the unaudited condensed consolidated statements of shareholders’ equity as a component of accumulated other comprehensive loss.
| 7 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company has not entered into any financial derivative instruments that expose it to material market risk, including any instruments designed to hedge the impact of foreign currency exposures. The Company may, however, hedge such exposure to foreign currency exchange fluctuations in the future.
Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other comprehensive loss in the unaudited condensed consolidated statements of operations and comprehensive loss as incurred.
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which at times, may exceed the federal depository insurance coverage of $
Income Taxes
The Company files U.S. federal and state returns. The Company’s foreign subsidiary also files a local tax return in their local jurisdiction. From a U.S. federal, state, and Canadian perspective, the years that remain open to examination are consistent with each jurisdiction’s statute of limitations. The Company receives no tax benefit from operating losses due to a full valuation allowance.
Basic net loss per share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. The Company uses the two-class method to determine earnings per share only when the Company is in an income position. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using the treasury stock method). The computation of basic net loss per share for the three and nine months ended September 30, 2025 and 2024 excludes potentially dilutive securities. The computations of net loss per share for each period presented is the same for both basic and fully diluted. In accordance with ASC 260 “Earnings per Share” (“ASC 260”), penny warrants were included in the calculation of weighted average shares outstanding for the purposes of calculating basic and diluted earnings per share. In accordance with ASC 260, 560 RSUs that were fully vested on September 30, 2025 were included in basic and dilutive earnings per share as there were no remaining contingencies for these shares to be issued as of September 30, 2025.
For the three and nine months ended September 30, 2025 | For the three and nine months ended September 30, 2024 | |||||||
| Warrants to purchase shares of Common Stock | ||||||||
| Restricted stock units - vested and unissued | ||||||||
| Restricted stock units - unvested | ||||||||
| Investment options to purchase shares of Common Stock | ||||||||
| Options to purchase shares of Common Stock | ||||||||
| Total potentially dilutive securities | ||||||||
Segment Reporting
The
Company operates as
| 8 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. PREPAID EXPENSES AND OTHER CURRENT ASSETS
As of September 30, 2025 and December 31, 2024, the prepaid expenses and other current assets of the Company consisted of the following:
| September 30, 2025 | December 31, 2024 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid other | ||||||||
| Prepaid product development | ||||||||
| Deferred offering costs | ||||||||
| Prepaid value-added taxes | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following assets which are located in Calgary, Canada, with all amounts translated into U.S. dollars:
| September 30, 2025 | December 31, 2024 | |||||||
| Lab equipment | $ | $ | ||||||
| Computer equipment and leasehold improvements | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net of accumulated depreciation | $ | $ | ||||||
Depreciation
expense was $
NOTE 5. ACCRUED LIABILITIES
As of September 30, 2025 and December 31, 2024, the accrued liabilities of the Company consisted of the following:
| September 30, 2025 | December 31, 2024 | |||
| Product development | $
|
$
| ||
| Professional fees | |
| ||
| Accrued franchise taxes | |
| ||
| Other | |
| ||
| Total accrued liabilities | $
|
$
|
NOTE 6. RELATED PARTY TRANSACTIONS
As
of September 30, 2025 and December 31, 2024, the Company had current liabilities of $
Board
member Sheila DeWitt has provided research and development services as an advisory consultant to the Company since May 2022. These services
are provided as needed on an hourly basis. During the three and nine months ended September 30, 2025, the Company incurred $
| 9 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS
Public Offering
On
January 30, 2025, the Company commenced a best efforts public offering (the “Offering”) of an aggregate of (i) shares
(the “Shares”) of Common Stock of the Company, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to
purchase
The
Offering closed on February 3, 2025. The net proceeds of the Offering, after deducting the fees and expenses of the Placement Agent (as
defined below), described in more detail below, and other offering expenses payable by the Company, but excluding the net proceeds from
the exercise of the Warrants, is $
All of the Warrants issued in connection with the Offering were determined to be equity classified in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.
In connection with the Offering, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional investor. Pursuant to the Purchase Agreement, the Company agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock or file any registration statement or prospectus, or any amendment or supplement thereto for 60 days after the closing date of the Offering, subject to certain exceptions. In addition, the Company has agreed not to effect or enter into an agreement to effect any issuance of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock involving a variable rate transaction (as defined in the Purchase Agreement) until the one-year anniversary of the closing date of the Offering, subject to an exception.
A holder will not have the right to exercise any portion of the Warrants or Pre-Funded Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99%, as applicable, of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants or the Pre-Funded Warrants, respectively.
Pursuant
to an engagement agreement, as amended, (the “Engagement Agreement”) with H.C. Wainwright & Co., LLC (the “Placement
Agent”), the Company agreed to pay the Placement Agent in connection with the Offering
Also
pursuant to the Engagement Agreement, the Company, in connection with the Offering, agreed to issue to the Placement Agent or its designees
warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of
As of September 30, 2025, a total of shares of Common Stock have been issued due to exercises of the Pre-Funded Warrants. Prior to the inducement warrant transaction discussed below, shares of Common Stock have been issued due to exercises of the Series B Warrants.
Inducement Warrant Transaction
On
September 17, 2025, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain
holders of the Company’s Series A Warrants and Series B Warrants originally issued in February 2025 (collectively, the “Existing
Warrants”), which closed on September 18, 2025. Pursuant to the Inducement Letters, the holders agreed to exercise for cash their Existing Warrants to purchase
| 10 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
Series C Warrants have an exercise price of $
All of the Inducement Warrants issued in connection with the inducement warrant transaction were determined to be equity classified in accordance with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.
The Company agreed to file a registration statement on Form S-3 covering the resale of the Inducement Warrant Shares issued or issuable upon the exercise of the Inducement Warrants within 10 days of entering into the Inducement Letters. Pursuant to the Inducement Letters, the Company agreed not to issue any shares of Common Stock or Common Stock equivalents or to file any other registration statement with the SEC (in each case, subject to certain exceptions) for a period ending on October 2, 2025. The Company also agreed not to effect or agree to effect any variable rate transaction (as defined in the Inducement Letters) until September 17, 2026.
In
connection with this inducement warrant transaction, the Company determined the fair value of the Existing Warrants immediately prior
to the Inducement Letters and the intrinsic value of the Existing Warrants immediately after the modification. The fair value of the
Existing Warrants immediately prior to the Inducement Letters was $
The
measurement of fair value of the Inducement Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions
current at the date of issuance (i.e., (1) risk-free interest rates of
At the Market Offering
The
Company entered into an at the market offering agreement, or the (“ATM Agreement”), with H.C. Wainwright & Co., LLC,
or (“Wainwright”), acting as sales agent, on April 9, 2025, relating to shares of Common Stock. Under the ATM Agreement,
the Company may offer and sell shares of Common Stock having an aggregate offering price of up to $
Because the purchase price per share to be paid for the shares of Common Stock that the Company may elect to sell under the ATM Agreement, if any, will fluctuate based on the market prices of the Company’s Common Stock at the time the Company elects to sell shares pursuant to the ATM Agreement, if any, it is not possible for us to predict the number of shares of Common Stock that the Company will sell under the ATM Agreement, the purchase price per share the buyer will pay for shares purchased from the Company under the ATM Agreement, or the aggregate gross proceeds that the Company will receive from those purchases under the ATM Agreement.
As
of September 30, 2025, the Company has issued shares under the ATM Agreement for net cash proceeds of $
| 11 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Stock Options
2020 Long-Term Incentive Plan, as amended (“Incentive Plan”)
Effective March 21, 2025, the Board approved an equitable adjustment to increase the number of shares available under the Incentive Plan by shares. On March 24, 2025, the Company registered for resale on Form S-8 the additional shares as a result of the equitable adjustment. As of September 30, 2025, the total number of shares available for grant under the Incentive Plan was .
The Company’s stock based compensation expense, recorded within general and administrative expense in the unaudited condensed consolidated statement of operations and comprehensive loss, related to stock options for the three months ended September 30, 2025 and 2024 was $ and $, respectively.
The Company’s stock based compensation expense, recorded within general and administrative expense, related to stock options for the nine months ended September 30, 2025 and 2024 was $ and $(), respectively.
As of September 30, 2025, the Company had $ in unamortized stock option expense, which will be recognized over a weighted average period of years.
Issuance of Restricted Stock Units
The Company’s activity in restricted stock units was as follows for the nine months ended September 30, 2025:
| Number of shares | Weighted average fair value | |||||||
| Non-vested at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Forfeited | ||||||||
| Vested | ( | ) | ||||||
| Non-vested at September 30, 2025 | $ | |||||||
For the three months ended September 30, 2025 and 2024, the Company recorded $ and $, respectively, in stock-based compensation expense related to restricted stock units, which is a component of both general and administrative and research and development expenses in the unaudited condensed consolidated statement of operations and comprehensive loss. For the nine months ended September 30, 2025 and 2024, the Company recorded $ and $, respectively, in stock-based compensation expense related to restricted stock units, which is a component of both general and administrative and research and development expenses in the condensed consolidated statement of operations and comprehensive loss. As of September 30, 2025, the Company had unamortized stock-based compensation costs related to restricted stock units of $ which will be recognized over a weighted average period of years. As of September 30, 2025, restricted stock units are vested without shares of Common Stock being issued, with all of these shares due as of September 30, 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Stock-based compensation expense for RSUs: | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 12 |
ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Warrants
The following table summarizes information about shares issuable under warrants outstanding at September 30, 2025:
Warrant shares outstanding | Weighted average exercise price | Weighted average remaining life | Intrinsic value | |||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Issued | — | — | ||||||||||||||
| Exercised | ( | ) | — | — | ||||||||||||
| Forfeited | ( | ) | — | — | ||||||||||||
| Outstanding at September 30, 2025 | ||||||||||||||||
| Exercisable at September 30, 2025 | $ | $ | ||||||||||||||
NOTE 8. LICENSING AGREEMENTS
On July 10, 2024, Akos entered into an Exclusive License Agreement (the “License Agreement”) with Aries Science and Technology, LLC, an Ohio limited liability company (“Aries”), pursuant to which Akos granted Aries a license of Akos’s patented radiation dermatitis topical product. The license allows Akos to use the patented formulation to develop pharmaceutical or non-pharmaceutical products for treating radiation dermatitis suitable for administration to humans or animals. The license is exclusive (subject to certain exceptions contained in the License Agreement), worldwide, royalty-bearing, and includes the right to sublicense. Akos is entitled to potential license payments, milestone payments and royalties based on net revenues of the Licensed Product on a licensed product-by-licensed product and country-by-country basis pursuant to the terms of the Agreement. Aries has the option during the license term, to purchase the rights to each licensed product (on a licensed product-by-licensed product basis) in the form of an exclusive (as to the applicable licensed product), fully paid, transferable right and license to the licensed product.
The Company has not earned any revenue related to this License Agreement as of September 30, 2025.
On
November 7, 2024, the Company entered into an Out-Licensing Agreement (the “Agreement”) with MycoMedica Life Sciences, PBC,
a Delaware public benefit corporation (“MycoMedica”), pursuant to which the Company will out-license EB-002 and its EVM201
series to MycoMedica for further development and sales of the product in treatment of neuropsychiatric disorders. MycoMedica will receive
an exclusive, global license to the formulations, drugs, method of use, and medical devices developed by Enveric to utilize the compound.
As part of the Agreement, the Company received a $
The Company has not earned any revenue related to this Agreement as of September 30, 2025.
On February 3, 2025, Akos entered into two licensing agreements with Restoration Biologics LLC (“Restoration Biologics”), a biotechnology company focused on the treatment of joint disease. The companies have executed two licenses for Akos’ cannabinoid-COX-2 conjugate compounds, for pharmaceutical and potential non-pharmaceutical applications.
The Company has not earned any revenue related to these agreements as of September 30, 2025.
NOTE 9. COMMITMENTS AND CONTINGENCIES
The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business. Management believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows.
Other Consulting and Vendor Agreements
The
Company has entered into a number of agreements and work orders for future consulting, clinical trial support, and testing services,
with terms ranging between one and 12 months. These agreements, in aggregate, commit the Company to approximately $
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Item 2. Management’s discussion and analysis of financial condition and results of operations
The information set forth below should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless stated otherwise, references in this Quarterly Report on Form 10-Q to “us,” “we,” “our,” or our “Company” and similar terms refer to Enveric Biosciences, Inc., a Delaware corporation, and its subsidiaries
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “anticipates,” “assumes,” “believes,” “can,” “could,” “estimates,” “expects,” “forecasts,” “guides,” “intends,” “may,” “plans,” “seeks,” “projects,” “targets,” and “would” or the negative of such terms or other variations on such terms or comparable terminology. Such forward-looking statements include, but are not limited to, future financial and operating results, the Company’s plans, objectives, expectations and intentions and other statements that are not historical facts. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from our historical experience and our present expectations. These risks and uncertainties include, but are not limited to:
| ● | our belief that EB-003 is the first known compound to selectively engage both 5-HT2A and 5-HT1B receptors with the potential to deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience; | |
| ● | our intention to broaden our pipeline with additional non-hallucinogenic molecules with the unveiling of the EVM401 Series; | |
| ● | our belief that the EVM401 Series will strengthen our ability to target addiction and neuropsychiatric disorders for patients with limited options; | |
| ● | our intention to pursue the EVM401 Series, but primarily focus on developing our lead asset EB-003 in the EVM301 Series; | |
| ● | our belief that factors exist that raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed consolidated financial statements; | |
| ● | management’s plan to alleviate the conditions that raise substantial doubt include raising additional working capital through public or private equity or debt financings or other sources, and may include additional collaborations with third parties as well as disciplined cash spending; | |
| ● | our belief that adequate additional financing may not be available to the Company on acceptable terms, or at all; | |
| ● | our belief that should the Company be unable to raise sufficient additional capital, the Company may be required to undertake further cost-cutting measures including delaying or discontinuing certain operating activities; | |
| ● | our exposure from changes in the exchange rates of the Canadian dollar and Australian dollar against the United States dollar; | |
| ● | our belief that the outcome of such legal proceedings that the Company may periodically be engaged in the normal course of business will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows; | |
| ● | our belief that our lead program, the EVM301 Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations in the patient; | |
| ● | the advancement of EB-003 through preclinical studies and aim of initiating the first-in-human studies to asses safety and tolerability including non-hallucinogenic properties, followed by clinical trial targeting the treatment of depression or other neuropsychiatric disorders; | |
| ● | our intention to assemble a team of clinical experts and principal investigators with experience across multiple mental health and central nervous system indications to be responsible for the management, monitoring, and integrity of the clinical research; | |
| ● | our plan to submit filings including Investigational New Drug (“IND”) applications and, eventually, new drug applications (NDAs) to seek approval with the U.S. Food and Drug Administration (FDA) and with responsible regulatory agencies in other jurisdictions, in connection with our product candidates; | |
| ● | our belief that we have regained compliance with Nasdaq Listing Rule 5550(b)(1); and | |
| ● | our success at managing the risks involved in the foregoing. |
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For a more detailed discussion of these and other factors that may affect our business and that could cause the actual results to differ materially from those projected in these forward-looking statements, see the risk factors and uncertainties set forth in Part II, Item 1A of this Form 10-Q and Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise, except as required by law.
Business Overview
Enveric a biotechnology company focused on developing next-generation, small-molecule neuroplastogenic therapeutics that address unmet needs in psychiatric and neurological disorders. By leveraging a differentiated drug discovery platform and a growing library of patent protected chemical structures, it is advancing a pipeline of novel compounds designed to promote neuroplasticity without hallucinogenic effects. The Company’s lead candidate, EB-003, is the first known compound designed to selectively engage both 5-HT2A and 5-HT1B receptors with the potential to deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience.
Enveric’s lead program, the EVM301 Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations in the patient. EB-003 is a novel derivative of N,N-Dimethyltryptamine. It is currently advancing through preclinical studies with the aim of initiating first-in-human studies to assess safety and tolerability including non-hallucinogenic properties, followed by clinical trials targeting the treatment of depression or other neuropsychiatric disorders.
The Company intends to assemble a team of clinical experts and principal investigators with experience across multiple mental health and central nervous system indications to be responsible for the management, monitoring, and integrity of the clinical research. The Company plans to submit filings including Investigational New Drug (“IND”) applications and, eventually, new drug applications (NDAs) to seek approval with the U.S. Food and Drug Administration (FDA) and with responsible regulatory agencies in other jurisdictions, in connection with its product candidates. The selection, timing, duration, and design of any prospective studies are subject to regulatory filings, approval and finalization of commercial plans. Enveric’s next step is to advance EB-003 into formal preclinical development studies in support of a future IND filing.
The Company unveiled an EVM401 Series on February 25, 2025, which is intended to broaden its pipeline with additional non-hallucinogenic molecules and strengthen our ability to target addiction and neuropsychiatric disorders for patients with limited options. While the Company intends to pursue development of the EVM401 Series, its primary focus is to develop its lead asset EB-003 in the EVM301 Series.
Recent Developments
At the Market Offering
The Company entered into an at the market offering agreement, or the (“ATM Agreement”), with H.C. Wainwright & Co., LLC, or (“Wainwright”), acting as sales agent, on April 9, 2025, relating to shares of Common Stock. Under the ATM Agreement, the Company may offer and sell shares of Common Stock having an aggregate offering price of up to $1,854,151 from time to time through Wainwright. As of September 30, 2025 the Company has issued 110,242 shares under the ATM Agreement for net cash proceeds of $1,636,799.
Inducement Warrant Transaction
On September 17, 2025, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain Holders of the Company’s Series A Warrants and Series B Warrants originally issued in February 2025 (the “Existing Warrants”), which closed on September 18, 2025. Pursuant to the Inducement Letters, the Holders agreed to exercise for cash their Existing Warrants to purchase 202,083 shares of the Company’s Common Stock, in the aggregate, at a reduced exercise price of $10.98 per share (from an original exercise price of $36.00 per share), in exchange for the Company’s agreement to issue new warrants (the “Series C Warrants” and “Series D Warrants,” collectively, the “Inducement Warrants”) to purchase up to 404,166 shares of the Company’s Common Stock under each series (the “Inducement Warrant Shares”). Pursuant to Nasdaq Listing Rule 5635(d), we are required to obtain approval from the Company’s stockholders before issuing any underlying Inducement Warrant Shares upon exercise of the Inducement Warrants (“Stockholder Approval”).
The Series C Warrants have an exercise price of $10.98 per share and expire five years from the date Stockholder Approval is received. The Series D Warrants have the same exercise price and expire eighteen months from the date Stockholder Approval received. The inducement warrant transaction closed on September 18, 2025. The Company received aggregate gross proceeds of $2,218,873 from the exercise of the Existing Warrants by the Holders.
| 15 |
The Company engaged Wainwright to act as its exclusive placement agent in connection with the transactions and agreed to pay Wainwright a cash fee equal to 7.0% of the gross proceeds as well as a management fee equal to 1.0% of the aggregate gross proceeds from the exercise of the Existing Warrants.The placement agent warrants have the same terms as the Inducement Warrants, except the placement agent warrants have an exercise price of $13.7256 per share. The grant date fair value of these placement agent warrants was estimated to be $90,000 on September 18, 2025 and was charged to additional paid-in capital as issuance costs. The Company also incurred legal and other offering-related fees of $334,659, which were similarly charged to additional paid-in capital.
Nasdaq Listing
On August 26, 2025, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of Nasdaq notifying the Company that it was not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(1). On October 23, 2025, the Company filed a Current Report on Form 8-K indicating that it believed as a result of the inducement warrant transaction (described above), its stockholders’ equity exceeded $2.5 million as required for continued listing pursuant to Nasdaq Listing Rule 5550(b)(1). On October 24, 2025, the Company received a letter from the Staff determining that the Company regained conditional compliance subject to evidencing compliance upon filing its next periodic report. In this Quarterly Report on Form 10-Q for the period ended September 30, 2025, the Company reports $3,456,176 in stockholders’ equity.
On October 22, 2025, the Company received written notice from the Listing Qualifications Department of Nasdaq notifying the Company that, because the closing price for the Company’s Common Stock had fallen below $1.00 per share for 30 consecutive trading days, the Company was no longer in compliance with the requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”). The Company effected a 1-for-12 reverse stock split on October 23, 2025, which began trading on a split-adjusted basis on October 28, 2025. As a result, the Company’s stock price has traded above the minimum bid price requirement since October 28, 2025 through the date of this report. On November 12, 2025, the Company received notice that it has regained compliance with the bid price requirement in Listing Rule 5550(a)(2) and that the Company is therefore in compliance with the Nasdaq Capital Market’s listing requirements.
Results of Operations
The following table sets forth information comparing the components of net loss for the three months ended September 30, 2025 and 2024:
| For the Three Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | 1,431,157 | $ | 1,195,661 | ||||
| Research and development | 402,417 | 802,717 | ||||||
| Depreciation and amortization | 40,369 | 84,814 | ||||||
| Total operating expenses | 1,873,943 | 2,083,192 | ||||||
| Loss from operations | (1,873,943 | ) | (2,083,192 | ) | ||||
| Other income (expense) | ||||||||
| Other expense | — | (623 | ) | |||||
| Interest income (expense), net | 274 | (217 | ) | |||||
| Total other income (expense) | 274 | (840 | ) | |||||
| Net loss before income taxes | $ | (1,873,669 | ) | $ | (2,084,032 | ) | ||
| Income tax expense | — | — | ||||||
| Net loss | $ | (1,873,669 | ) | $ | (2,084,032 | ) | ||
General and Administrative Expenses
Our general and administrative expenses increased to $1,431,157 for the three months ended September 30, 2025 from $1,195,661 for the three months ended September 30, 2024, an increase of $235,496, or 20%. This change was primarily driven by increases in marketing expense of $155,134, Delaware Franchise Tax of $103,100, and legal expense of $39,634, offset by decreases in stock based compensation expense of $65,326.
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Research and Development Expenses
Our research and development expenses for the three months ended September 30, 2025 were $402,417 as compared to $802,717 for the three months ended September 30, 2024, for a decrease of $400,300, or approximately 50%. This change was primarily driven by a decrease in CRO costs of $264,384, salaries and wages of $148,103, research costs of $128,027, and product development costs of $63,858, partially offset by an increase in consulting fees of $197,858.
Depreciation and Amortization Expense
Depreciation and amortization expense for the three months ended September 30, 2025 was $40,369 as compared to $84,814 for the three months ended September 30, 2024, with a decrease of $44,445, or approximately 52%, due to full amortization of the Company’s intangible assets during the first quarter of 2025.
The following table sets forth information comparing the components of net loss for the nine months ended September 30, 2025 and 2024:
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | 4,010,313 | $ | 4,329,565 | ||||
| Research and development | 2,408,839 | 1,873,873 | ||||||
| Depreciation and amortization | 161,373 | 255,002 | ||||||
| Total operating expenses | 6,580,525 | 6,458,440 | ||||||
| Loss from operations | (6,580,525 | ) | (6,458,440 | ) | ||||
| Other income (expense) | ||||||||
| Other income | 2,565 | 39,386 | ||||||
| Interest income (expense), net | 144 | 444 | ||||||
| Total other income (expense) | 2,709 | 39,830 | ||||||
| Net loss before income taxes | $ | (6,577,816 | ) | $ | (6,418,610 | ) | ||
| Income tax expense | — | (1,731 | ) | |||||
| Net loss | $ | (6,577,816 | ) | $ | (6,420,341 | ) | ||
General and Administrative Expenses
Our general and administrative expenses decreased to $4,010,313 for the nine months ended September 30, 2025 from $4,329,565 for the nine months ended September 30, 2024, a decrease of $319,252, or 7%. This change was primarily driven by decreases in director fees of $150,252, stock compensation expense of $177,643, insurance fees of $76,089, and accounting fees of $62,226, partially offset by an increase in marketing expense of $192,763.
Research and Development Expenses
Our research and development expense for the nine months ended September 30, 2025 was $2,408,839 as compared to $1,873,873 for the nine months ended September 30, 2024 with an increase of $534,966, or approximately 29%. This increase was primarily driven by an increase in consulting fees of $1,334,313, and a prior year gain that was realized during the nine months ended September 30, 2024 related to the Australian R&D tax incentive of $291,439, offset by a decrease in CRO costs of $508,774, salaries and wages of $442,648, lab costs of $49,169, product development costs of $30,974, research costs of $45,146, and rent expense of $28,332.
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Depreciation and Amortization Expense
Depreciation and amortization expense for the nine months ended September 30, 2025 was $161,373 as compared to $255,002 for the nine months ended September 30, 2024, for a decrease of $93,629, or approximately 37%, primarily related to full amortization of the Company’s intangible assets in the first quarter of 2025.
Going Concern, Liquidity and Capital Resources
The Company has incurred losses since inception resulting in an accumulated deficit of $112,652,321 as of September 30, 2025 and further losses are anticipated in the development of its business. For the nine months ended September 30, 2025, the Company had a loss from operations of $6,580,525. Further, the Company had operating cash outflows of $6,356,680 for the nine months ended September 30, 2025. Since inception, being a research and development company, the Company has not yet generated revenue and the Company has incurred continuing losses from its operations. The Company’s operations have been funded principally through the issuance of debt and equity. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed consolidated financial statements.
In assessing the Company’s ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At September 30, 2025, the Company had cash of $3,757,594 and working capital of $3,259,655. The Company’s current cash on hand is insufficient to satisfy its operating cash needs for the 12 months following the filing of this Quarterly Report on Form 10-Q. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date the financial statements are issued. Management’s plan to alleviate the conditions that raise substantial doubt include raising additional working capital through public or private equity or debt financings or other sources, and may include additional collaborations with third parties as well as disciplined cash spending. Adequate additional financing may not be available to us on acceptable terms, or at all. Should the Company be unable to raise sufficient additional capital, the Company may be required to undertake cost-cutting measures including delaying or discontinuing certain operating activities.
As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date of the unaudited condensed consolidated financial statements. The Company’s unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash Flows
Since inception, we have primarily used our available cash to fund our product development and operations expenditures.
Cash Flows for the Nine Months Ended September 30, 2025 and 2024
The following table sets forth a summary of cash flows for the years presented:
| For the Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (6,356,680 | ) | $ | (6,414,590 | ) | ||
| Net cash provided by financing activities | 7,890,361 | 7,210,386 | ||||||
| Effect of foreign exchange rate on changes on cash | (17,113 | ) | 27,910 | |||||
| Net increase in cash | $ | 1,516,568 | $ | 823,706 | ||||
Operating Activities
Net cash used in operating activities was $6,356,680 during the nine months ended September 30, 2025, which consisted primarily of a net loss adjusted for non-cash items of $5,960,602, a decrease in prepaid expenses and other current assets of $132,795, a decrease in related party payable of $232,891 and a decrease in accounts payable and accrued liabilities of $295,982.
Net cash used in operating activities was $6,414,590 during the nine months ended September 30, 2024, which consisted primarily of a net loss adjusted for non-cash items of $5,114,009, an increase in prepaid expenses and other current assets of $3,674, and a decrease in accounts payable and accrued liabilities of $1,296,907.
Financing Activities
Net cash provided by financing activities was $7,890,361 during the nine months ended September 30, 2025, which consisted of $4,244,467 in net proceeds from a best efforts public offering of Common Stock, Pre-Funded Warrants, and Series A and Series B Warrants (the “Offering”), $2,009,095 in proceeds from the exercise of warrants, and $1,636,799 in net proceeds from the sale of Common Stock through the ATM Agreement.
Net cash provided by financing activities was $7,210,386 during the nine months ended September 30, 2024, which consisted of $1,804,819 from the net proceeds received from the stock subscription receivable, $2,676,980 for the exercise of the inducement warrants, $2,290,186 for the Common Stock sold under a distribution agreement, net of offering costs, and $599,862 for the Common Stock sold under the Purchase Agreement, offset by $161,461 offering costs previously accrued for the inducement warrants.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, costs and expenses and related disclosures. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our most critical accounting estimate includes determining the accruals associated with third party providers supporting research and development efforts.
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There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk exposure is foreign currency exchange rate risk. From inception through September 30, 2025, the Company’s reporting currency is the United States dollar while the functional currency of certain of the Company’s subsidiaries were the Canadian dollar and Australian dollar. For the reporting periods ended September 30, 2025 and September 30, 2024, the Company engaged in a number of transactions denominated in Canadian dollars and Australian dollars. As a result, the Company is subject to exposure from changes in the exchange rates of the Canadian dollar and Australian dollar against the U.S. dollar.
The Company has not entered into any financial derivative instruments that expose it to material market risk, including any instruments designed to hedge the impact of foreign currency exposures. The Company may, however, hedge such exposure to foreign currency exchange fluctuations in the future.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based on this evaluation, and in light of the material weaknesses found in our internal controls over financial reporting as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective as of September 30, 2025.
Management’s Remediation Plan
As previously discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, management had concluded that our internal control over financial reporting was not effective as of December 31, 2024, because management identified inadequate segregation of duties to ensure the processing, review, and authorization of all transactions, including non-routine transactions resulting in deficiencies, which, in aggregate, amounted to a material weakness in the Company’s internal control over financial reporting.
Management has taken, and is taking steps to strengthen our internal control over financial reporting: we have conducted evaluation of the material weakness to determine the appropriate remedy and have established procedures for documenting disclosures and disclosure controls.
While we have taken certain actions to address the material weaknesses identified, additional measures may be necessary as we work to improve the overall effectiveness of our internal controls over financial reporting.
Changes in Internal Control over Financial Reporting
Other than the changes being undertaken as part of the Company’s remediation plan, there have been no other changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-(f) of the Exchange Act) that occurred during quarter ending September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal proceedings
The Company may periodically be involved in legal proceedings, legal actions and claims arising in the ordinary course of business. In the opinion of management, we do not have any pending litigation that, separately or in the aggregate, have a material adverse effect on our financial position, results of operations or cash flows.
Item 1A. Risk factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 28, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations of financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Company’s Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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Item 6. Exhibits
| * | Filed herewith. | |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 14, 2025.
| Enveric Biosciences, Inc. | ||
| By: | /s/ Joseph Tucker | |
| Name: | Joseph Tucker, Ph.D. | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| By: | /s/ Kevin Coveney | |
| Name: | Kevin Coveney | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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