--12-31 Q3 0000890821 0000890821 2024-01-01 2024-09-30 0000890821 2024-11-12 0000890821 2024-09-30 0000890821 2023-12-31 0000890821 ENVB:C系列可赎回优先股成员 2024-09-30 0000890821 ENVB:C系列可赎回优先股成员 2023-12-31 0000890821 us-gaap:系列B优先股成员 2024-09-30 0000890821 us-gaap:系列B优先股成员 2023-12-31 0000890821 2024-07-01 2024-09-30 0000890821 2023-07-01 2023-09-30 0000890821 2023-01-01 2023-09-30 0000890821 ENVB:可赎回非控制权益成员 2023-12-31 0000890821 ENVB:中间资本成员 2023-12-31 0000890821 美国通用会计准则:普通股股份 2023-12-31 0000890821 美国通用会计准则:资本超额 2023-12-31 0000890821 ENVB:订阅应收会员 2023-12-31 0000890821 美国通用会计准则:留存收益成员 2023-12-31 0000890821 us-gaap:累计其他综合收入成员 2023-12-31 0000890821 ENVB:可赎回的非控股权益会员 2024-03-31 0000890821 ENVB:中间资本权益会员 2024-03-31 0000890821 美国通用会计准则:普通股股份 2024-03-31 0000890821 美国通用会计准则:资本超额 2024-03-31 0000890821 ENVB:可收订制会员 2024-03-31 0000890821 美国通用会计准则:留存收益成员 2024-03-31 0000890821 us-gaap:累计其他综合收入成员 2024-03-31 0000890821 2024-03-31 0000890821 ENVB:可赎回非控制权益会员 2024-06-30 0000890821 ENVB:夹层股本会员 2024-06-30 0000890821 美国通用会计准则:普通股股份 2024-06-30 0000890821 美国通用会计准则:资本超额 2024-06-30 0000890821 ENVB:可收订制会员 2024-06-30 0000890821 美国通用会计准则:留存收益成员 2024-06-30 0000890821 us-gaap:累计其他综合收入成员 2024-06-30 0000890821 2024-06-30 0000890821 ENVB:可赎回的非控制利益成员 2022-12-31 0000890821 ENVB:中间资本成员 2022-12-31 0000890821 美国通用会计准则:普通股股份 2022-12-31 0000890821 美国通用会计准则:资本超额 2022-12-31 0000890821 美国通用会计准则:留存收益成员 2022-12-31 0000890821 us-gaap:累计其他综合收入成员 2022-12-31 0000890821 2022-12-31 0000890821 ENVB:可赎回的非控制权益成员 2023-03-31 0000890821 ENVB:中间融资权益成员 2023-03-31 0000890821 美国通用会计准则:普通股股份 2023-03-31 0000890821 美国通用会计准则:资本超额 2023-03-31 0000890821 美国通用会计准则:留存收益成员 2023-03-31 0000890821 us-gaap:累计其他综合收入成员 2023-03-31 0000890821 2023-03-31 0000890821 ENVB:可赎回的非控制权益成员 2023-06-30 0000890821 ENVB:中间融资权益成员 2023-06-30 0000890821 美国通用会计准则:普通股股份 2023-06-30 0000890821 美国通用会计准则:资本超额 2023-06-30 0000890821 美国通用会计准则:留存收益成员 2023-06-30 0000890821 us-gaap:累计其他综合收入成员 2023-06-30 0000890821 2023-06-30 0000890821 ENVB:可赎回的非控制权益成员 2024-01-01 2024-03-31 0000890821 ENVB:中间资本权益成员 2024-01-01 2024-03-31 0000890821 美国通用会计准则:普通股股份 2024-01-01 2024-03-31 0000890821 美国通用会计准则:资本超额 2024-01-01 2024-03-31 0000890821 ENVB:应收会员费会员 2024-01-01 2024-03-31 0000890821 美国通用会计准则:留存收益成员 2024-01-01 2024-03-31 0000890821 us-gaap:累计其他综合收入成员 2024-01-01 2024-03-31 0000890821 2024-01-01 2024-03-31 0000890821 ENVB:可赎回的非控制权益会员 2024-04-01 2024-06-30 0000890821 ENVB:夹层权益会员 2024-04-01 2024-06-30 0000890821 美国通用会计准则:普通股股份 2024-04-01 2024-06-30 0000890821 美国通用会计准则:资本超额 2024-04-01 2024-06-30 0000890821 ENVB:应收会员费会员 2024-04-01 2024-06-30 0000890821 美国通用会计准则:留存收益成员 2024-04-01 2024-06-30 0000890821 us-gaap:累计其他综合收入成员 2024-04-01 2024-06-30 0000890821 2024-04-01 2024-06-30 0000890821 ENVB:可赎回的非控制利益成员 2024-07-01 2024-09-30 0000890821 ENVB:夹层股权成员 2024-07-01 2024-09-30 0000890821 美国通用会计准则:普通股股份 2024-07-01 2024-09-30 0000890821 美国通用会计准则:资本超额 2024-07-01 2024-09-30 0000890821 ENVB:认购应收账款成员 2024-07-01 2024-09-30 0000890821 美国通用会计准则:留存收益成员 2024-07-01 2024-09-30 0000890821 us-gaap:累计其他综合收入成员 2024-07-01 2024-09-30 0000890821 ENVB:可赎回的非控股权益成员 2023-01-01 2023-03-31 0000890821 ENVB:中间产权成员 2023-01-01 2023-03-31 0000890821 美国通用会计准则:普通股股份 2023-01-01 2023-03-31 0000890821 美国通用会计准则:资本超额 2023-01-01 2023-03-31 0000890821 美国通用会计准则:留存收益成员 2023-01-01 2023-03-31 0000890821 us-gaap:累计其他综合收入成员 2023-01-01 2023-03-31 0000890821 2023-01-01 2023-03-31 0000890821 ENVB:可赎回的非控股权益成员 2023-04-01 2023-06-30 0000890821 ENVB:夹层股权成员 2023-04-01 2023-06-30 0000890821 美国通用会计准则:普通股股份 2023-04-01 2023-06-30 0000890821 美国通用会计准则:资本超额 2023-04-01 2023-06-30 0000890821 美国通用会计准则:留存收益成员 2023-04-01 2023-06-30 0000890821 us-gaap:累计其他综合收入成员 2023-04-01 2023-06-30 0000890821 2023-04-01 2023-06-30 0000890821 ENVB:可赎回的非控股权成员 2023-07-01 2023-09-30 0000890821 ENVB:夹层股权成员 2023-07-01 2023-09-30 0000890821 美国通用会计准则:普通股股份 2023-07-01 2023-09-30 0000890821 美国通用会计准则:资本超额 2023-07-01 2023-09-30 0000890821 美国通用会计准则:留存收益成员 2023-07-01 2023-09-30 0000890821 us-gaap:累计其他综合收入成员 2023-07-01 2023-09-30 0000890821 ENVB:可赎回的非控制权益成员 2024-09-30 0000890821 ENVB:中间贷权益成员 2024-09-30 0000890821 美国通用会计准则:普通股股份 2024-09-30 0000890821 美国通用会计准则:资本超额 2024-09-30 0000890821 ENVB:认股权应收成员 2024-09-30 0000890821 美国通用会计准则:留存收益成员 2024-09-30 0000890821 us-gaap:累计其他综合收入成员 2024-09-30 0000890821 ENVB:可赎回的非控股权益成员 2023-09-30 0000890821 ENVB:中间权益成员 2023-09-30 0000890821 美国通用会计准则:普通股股份 2023-09-30 0000890821 美国通用会计准则:资本超额 2023-09-30 0000890821 美国通用会计准则:留存收益成员 2023-09-30 0000890821 us-gaap:累计其他综合收入成员 2023-09-30 0000890821 2023-09-30 0000890821 2023-11-21 0000890821 2024-05-16 0000890821 2023-11-12 0000890821 国家:美国 2024-09-30 0000890821 国家:加拿大 2024-09-30 0000890821 国家:澳大利亚 2024-09-30 0000890821 ENVB:购买普通股权证成员 2024-07-01 2024-09-30 0000890821 ENVB:购买普通股权证成员 2023-07-01 2023-09-30 0000890821 ENVB:购买普通股权证成员 2024-01-01 2024-09-30 0000890821 ENVB:购买普通股权证成员 2023-01-01 2023-09-30 0000890821 ENVB:已归属受限股份单位和未发行成员 2024-07-01 2024-09-30 0000890821 ENVB:已归属且未发行成员的限制性股票单位 2023-07-01 2023-09-30 0000890821 ENVB:已归属且未发行成员的限制性股票单位 2024-01-01 2024-09-30 0000890821 ENVB:已归属且未发行成员的限制性股票单位 2023-01-01 2023-09-30 0000890821 ENVB:未归属成员的限制股票单位 2024-07-01 2024-09-30 0000890821 ENVB:未归属成员的限制股票单位 2023-07-01 2023-09-30 0000890821 ENVB:未归属成员的限制股票单位 2024-01-01 2024-09-30 0000890821 ENVB:未归属成员的限制股票单位 2023-01-01 2023-09-30 0000890821 ENVB:投资选项,购买普通股股份成员 2024-07-01 2024-09-30 0000890821 ENVB: 购买普通股份会员的投资选择 2023-07-01 2023-09-30 0000890821 ENVB: 购买普通股份会员的投资选择 2024-01-01 2024-09-30 0000890821 ENVB: 购买普通股份会员的投资选择 2023-01-01 2023-09-30 0000890821 ENVB: 购买普通股份会员的选择 2024-07-01 2024-09-30 0000890821 ENVB: 购买普通股份会员的选择 2023-07-01 2023-09-30 0000890821 ENVB: 购买普通股份会员的选择 2024-01-01 2024-09-30 0000890821 ENVB: 购买普通股份会员的选择 2023-01-01 2023-09-30 0000890821 ENVB: 实验设备会员 2024-09-30 0000890821 ENVB: 实验室设备成员 2023-12-31 0000890821 ENVB: 计算机设备和租赁改进成员 2024-09-30 0000890821 ENVB: 计算机设备和租赁改进成员 2023-12-31 0000890821 ENVB: 分销协议成员 ENVB: Canaccord Genuity LLC成员 2023-09-01 0000890821 ENVB: 分销协议成员 ENVB: Canaccord Genuity LLC成员 2023-09-01 2023-09-01 0000890821 ENVB: 分销协议成员 ENVB: Canaccord Genuity LLC成员 2024-01-01 2024-09-30 0000890821 ENVB: 分销协议成员 ENVB: Canaccord Genuity LLC成员 2024-09-30 0000890821 ENVB: 分销协议成员 ENVB: Canaccord Genuity LLC成员 2023-12-31 0000890821 ENVB: 分销协议成员 2024-09-30 0000890821 ENVB: 二月认股权证成员 2023-12-28 2023-12-28 0000890821 ENVB: 二月认股权证成员 srt : 最低会员 2023-12-28 2023-12-28 0000890821 ENVB:二月认股权证会员 srt:最大成员 2023-01-01 2023-12-31 0000890821 ENVB:二月认股权证会员 2023-12-28 0000890821 2024-01-01 2024-01-31 0000890821 美国通用会计准则:普通股股份 2023-01-01 2023-12-31 0000890821 ENVB:二月认股权证会员 2023-12-31 0000890821 ENVB:二月认股权证会员 2024-09-30 0000890821 ENVB:购买协议会员 2024-03-08 2024-03-08 0000890821 ENVB:注册权协议成员 2023-11-03 2023-11-03 0000890821 ENVB:购买协议成员 2024-05-03 2024-05-03 0000890821 ENVB:购买协议成员 2024-05-03 2024-05-03 0000890821 ENVB:购买协议成员 2024-07-01 2024-09-30 0000890821 ENVB:购买协议成员 2024-01-01 2024-09-30 0000890821 ENVB:购买协议成员 2024-09-30 0000890821 ENVB:购买协议成员 2023-12-31 0000890821 ENVB:2020年长期激励计划成员 2023-11-02 0000890821 ENVB:2020年长期激励计划成员 ENVB:董事会成员 2024-03-31 0000890821 ENVB:2020年长期激励计划成员 ENVB:董事会成员 2024-09-30 0000890821 us-gaap:员工股票期权成员 2024-07-01 2024-09-30 0000890821 us-gaap:员工股票期权成员 2023-07-01 2023-09-30 0000890821 us-gaap:员工股票期权成员 2024-01-01 2024-09-30 0000890821 us-gaap:员工股票期权成员 2023-01-01 2023-09-30 0000890821 us-gaap:员工股票期权成员 2024-09-30 0000890821 us-gaap:限制性股票单位成员 2024-07-01 2024-09-30 0000890821 us-gaap:限制性股票单位成员 2023-07-01 2023-09-30 0000890821 us-gaap:限制性股票单位成员 2024-01-01 2024-09-30 0000890821 us-gaap:限制性股票单位成员 2023-01-01 2023-09-30 0000890821 us-gaap:限制性股票单位成员 2024-09-30 0000890821 us-gaap:限制性股票单位成员 美国通用会计准则:普通股股份 2024-01-01 2024-09-30 0000890821 2023-01-01 2023-12-31 0000890821 us-gaap:限制性股票单位成员 2023-12-31 0000890821 美国通用会计准则:一般和行政费用成员 2024-07-01 2024-09-30 0000890821 美国通用会计准则:一般和行政费用成员 2023-07-01 2023-09-30 0000890821 美国通用会计准则:一般和行政费用成员 2024-01-01 2024-09-30 0000890821 美国通用会计准则:一般和行政费用成员 2023-01-01 2023-09-30 0000890821 us-gaap:研发费用成员 2024-07-01 2024-09-30 0000890821 us-gaap:研发费用成员 2023-07-01 2023-09-30 0000890821 us-gaap:研发费用成员 2024-01-01 2024-09-30 0000890821 us-gaap:研发费用成员 2023-01-01 2023-09-30 0000890821 美国通用会计准则:认股权证成员 2023-12-31 0000890821 美国通用会计准则:认股权证成员 2023-01-01 2023-12-31 0000890821 美国通用会计准则:认股权证成员 2024-01-01 2024-09-30 0000890821 美国通用会计准则:认股权证成员 2024-09-30 0000890821 ENVB: 投资选择会员 2023-12-31 0000890821 ENVB: 投资选择会员 2024-01-01 2024-09-30 0000890821 ENVB: 投资选择会员 2023-01-01 2023-12-31 0000890821 ENVB:投资选择成员 2024-09-30 0000890821 ENVB:Avance Clinical成员 2024-09-30 0000890821 ENVB:Avance Clinical成员 2024-07-01 2024-09-30 0000890821 ENVB:Avance Clinical成员 2024-01-01 2024-09-30 0000890821 ENVB:Avance Clinical成员 2023-07-01 2023-09-30 0000890821 ENVB:Avance Clinical成员 2023-01-01 2023-09-30 0000890821 ENVB:其他咨询和供应商协议成员 2024-09-30 0000890821 2023-05-31 2023-05-31 0000890821 us-gaap:后续事件会员 美国通用会计准则:普通股股份 ENVB: 购买协议会员 2024-10-01 2024-11-14 0000890821 us-gaap:后续事件会员 美国通用会计准则:普通股股份 ENVB: 购买协议会员 2024-11-12 0000890821 us-gaap:后续事件会员 2024-10-09 2024-10-09 0000890821 us-gaap:后续事件会员 ENVB: 激励计划会员 2024-10-09 0000890821 us-gaap:后续事件会员 2024-11-07 2024-11-07 iso4217:美元指数 xbrli:股份 iso4217:美元指数 xbrli:股份 xbrli:纯形 aud

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: September 30, 2024

 

OR

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from ___ to ___

 

Commission File Number 001-38286

 

ENVERIC BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   95-4484725

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer

Identification No.)

 

4851 Tamiami Trail N, Suite 200

Naples, FL

  34103
(Address of principal executive offices)   (Zip code)

 

(239) 302-1707

(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
Common Stock, $0.01 par value per share   ENVB   The Nasdaq Stock Market LLC

 

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. Yes No ☐

 

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). Yes No ☐

 

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 ☐
Non-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. ☐

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

 

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, 2024, there were 9,944,920 shares outstanding of Registrant’s Common Stock (par value $0.01 per share).

 

 

 

 

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

 

FORM 10-Q

 

TABLE OF CONTENTS

 

    页面
  第一部分-财务信息  
项目 1. 财务报表  
  2024年9月30日(未经审计)和2023年12月31日的简明合并资产负债表 2
  2024年和2023年截至9月30日三个月及九个月未经审核的简明合并营运及综合损益报表 3
  2024年9月30日和2023年三个月以及九个月结束的未经审计的基本报表中间股本和股东权益变动表 4
  2024年9月30日和2023年的九个月未经审计的简明现金流量表 6
  简明联合财务报表附注(未经审计) 7
项目 2. 分销计划 19
项目 3. 有关市场风险的定量和定性披露 27
项目 4. 控制和程序 27
     
  第二部分-其他信息  
项目 1. 法律诉讼 28
Interest expense, net 风险因素 28
项目 2. 未注册的股票股权销售和筹款用途 29
项目 3. 对优先证券的违约 29
项目 4. 矿山安全披露 29
项目5。 其他信息 29
项目 6. 展示资料 30
  签名 31

 

 

 

 

ENVERIC 生物科学公司及子公司

汇编简明资产负债表

 

   2024年9月30日   2023年12月31日 
   (未经审计)     
资产          
流动资产:          
现金  $3,111,683   $2,287,977 
预付费用及其他流动资产   1,226,576    1,293,554 
总流动资产   4,338,259    3,581,531 
           
其他资产:          
物业和设备,净值   367,689    507,377 
无形资产-净额   84,368    210,932 
其他资产总计   452,057    718,309 
总资产  $4,790,316   $4,299,840 
           
负债、中间资本、和股东权益          
流动负债:          
应付账款  $576,324   $1,218,783 
应计负债   253,150    1,075,643 
投资选择责任   4,944    23,608 
认股权责任   4,748    25,470 
总流动负债   839,166    2,343,504 
           
承诺和 contingencies(注9)   -    - 
           
中间权益          
C轮可赎回优先股,$0.01 面值, 100,000股份得到授权,和0 截至2024年9月30日和2023年12月31日的已发行在外股份        
总准贷本金        
           
股东权益          
优先股,$0.00010.01 面值, 20,000,000 授权股份;B系列优先股,$0.01 面值, 3,600,000 授权股数, 0 截至2024年9月30日和2023年12月31日的已发行在外股份        
普通股,每股面值为 $0.0001;0.01 面值, 100,000,000 授权股数, 8,994,9202,739,315 截至2024年9月30日和2023年12月31日的已发行在外股份   89,949    27,392 
追加实收资本   107,316,058    100,815,851 
股票认购应收款项为4,597,000。       (1,817,640)
累积赤字   (102,919,859)   (96,499,518)
累计其他综合损失   (534,998)   (569,749)
股东权益合计   3,951,150    1,956,336 
负债合计、次级股本和股东权益  $4,790,316   $4,299,840 

 

See the accompanying notes to the unaudited condensed consolidated financial statements.

 

2

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

   2024   2023   2024   2023 
  

For the Three Months Ended

September 30,

  

For the Nine Months Ended

September 30,

 
   2024   2023   2024   2023 
Operating expenses                    
General and administrative  $1,235,661   $2,080,644   $4,467,065   $8,273,344 
Research and development   762,717    1,281,455    1,736,373    5,531,436 
Depreciation and amortization   84,814    86,296    255,002    259,300 
Total operating expenses   2,083,192    3,448,395    6,458,440    14,064,080 
                     
Loss from operations   (2,083,192)   (3,448,395)   (6,458,440)   (14,064,080)
                     
Other income (expense)                    
Change in fair value of warrant liabilities   (122)   67,822    20,722    (115,342)
Change in fair value of investment option liability   (501)   562,715    18,664    (399,921)
Change in fair value of derivative liability               727,000 
Interest income (expense), net   (217)   2,237    444    3,142 
Total other income (expense)   (840)   632,774    39,830    214,879 
                     
Net loss before income taxes   (2,084,032)   (2,815,621)   (6,418,610)   (13,849,201)
                     
Income tax expense       (6,595)   (1,731)   (6,595)
                     
Net loss   (2,084,032)   (2,822,216)   (6,420,341)   (13,855,796)
Less preferred dividends attributable to non-controlling interest               19,041 
Less deemed dividends attributable to accretion of embedded derivative at redemption value               147,988 
Net loss attributable to shareholders   (2,084,032)   (2,822,216)   (6,420,341)   (14,022,825)
                     
Other comprehensive income                    
Foreign currency translation   31,497    10,433    34,751    1,115 
                     
Comprehensive loss  $(2,052,535)  $(2,811,783)  $(6,385,590)  $(14,021,710)
                     
Net loss per share - basic and diluted  $(0.24)  $(1.30)  $(0.95)  $(6.62)
                     
Weighted average shares outstanding, basic and diluted   8,702,951    2,164,656    6,771,162    2,117,153 

 

See the accompanying notes to the unaudited condensed consolidated financial statements.

 

3

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

 

  - Shares   Amount   Additional
Paid-In
Capital
   Subscription
Receivable
   Accumulated
Deficit
   Accumulated
Other
Comprehensive
Loss
   Total
Shareholders’
Equity
 
     Common Stock                     
     Shares   Amount   Additional
Paid-In
Capital
   Subscription
Receivable
   Accumulated
Deficit
   Accumulated
Other
Comprehensive
Loss
   Total
Shareholders’
Equity
 
Balance at January 1, 2024 --  2,739,315    27,392    100,815,851    (1,817,640)   (96,499,518)   (569,749)   1,956,336 
Stock-based compensation --          351,488                351,488 
Common stock sold under the Equity Distribution Agreement, net of offering costs of $583,713     1,668,000    16,680    1,792,109                1,808,789 
Issuance of direct offering shares (see Note 7)     228,690    2,287    320,166                322,453 
Exercise of Inducement Warrants for common stock     1,954,000    19,540    2,657,440                2,676,980 
Proceeds from the subscription receivable related to the issuance of Inducement Warrants, net of offering costs of $12,821             (12,821)   280,500            267,679 
Proceeds from the subscription receivable related to the exercise of warrants and preferred investment options and issuance of common stock in abeyance     704,000    7,040    (7,040)   1,537,140            1,537,140 
Foreign exchange translation gain                         17,906    17,906 
Net loss --                  (2,456,915)       (2,456,915)
Balance at March 31, 2024 --  7,294,005   $72,939   $105,917,193   $   $(98,956,433)  $(551,843)  $6,481,856 
Stock-based compensation             369,614                369,614 
Common stock sold under the Purchase Agreement, net of offering costs of $82,850     125,000    1,250    (1,250)                
Issuance of direct offering shares (see Note 7)     458,000    4,580    444,260                448,840 
Issuance of common shares for vested RSU     1,563    16    (16)                
Foreign exchange translation loss                         (14,652)   (14,652)
Net loss --                  (1,879,394)       (1,879,394)
Balance at June 30, 2024 --  7,878,568   $78,785   $106,729,801   $   $(100,835,827)  $(566,495)  $5,406,264 
Stock-based compensation             369,614                369,614 
Common stock sold under the Purchase Agreement, net of offering costs of $290,029     1,090,477    10,905    216,902                227,807 
Issuance of common shares for vested RSU     25,875    259    (259)                
Foreign exchange translation gain                         31,497    31,497 
Net loss --                  (2,084,032)       (2,084,032)
Balance at September 30, 2024 --  8,994,920   $89,949   $107,316,058   $   $(102,919,859)  $(534,998)  $3,951,150 

 

See the accompanying notes to the unaudited condensed consolidated financial statements.

 

4

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

 

   Shares   Amount   Total
Mezzanine
Equity
     Shares   Amount   Additional Paid-In Capital   Accumulated Deficit   Accumulated
Other
Comprehensive
Loss
   Total
Shareholders’
Equity
 
   Redeemable Non-controlling Interest         Common Stock                 
   Shares   Amount   Total
Mezzanine
Equity
     Shares   Amount   Additional Paid-In Capital   Accumulated Deficit   Accumulated
Other
Comprehensive
Loss
   Total
Shareholders’
Equity
 
Balance at January 1, 2023   1,000   $885,028   $885,028      2,078,271   $20,782   $94,395,662   $(79,207,786)  $(536,734)  $14,671,924 
Stock-based compensation                         532,835            532,835 
Preferred dividends attributable to redeemable non-controlling interest       12,329    12,329              (12,329)           (12,329)
Accretion of embedded derivative to redemption value       110,991    110,991              (110,991)           (110,991)
Foreign exchange translation gain                                 1,968    1,968 
Net loss                             (4,677,527)       (4,677,527)
Balance at March 31, 2023   1,000   $1,008,348   $1,008,348      2,078,271   $20,782   $94,805,177   $(83,885,313)  $(534,766)  $10,405,880 
Stock-based compensation                         879,738            879,738 
Preferred dividends attributable to redeemable       6,712    6,712              (6,712)           (6,712)
Accretion of embedded derivative to redemption value       36,997    36,997              (36,997)           (36,997)
Redemption of Series A preferred stock   (1,000)   (1,052,057)   (1,052,057)                          
Issuance of common shares in exchange for RSU conversions from the reduction in force                 63,511    635    (635)            
Foreign exchange translation loss                                 (11,286)   (11,286)
Net loss                             (6,356,053)       (6,356,053)
Balance at June 30, 2023      $   $      2,141,782   $21,417   $95,640,571   $(90,241,366)  $(546,052)  $4,874,570 
Stock-based compensation                         372,859            372,859 
Issuance of common shares for vested RSU                 40,130    401    (401)            
Foreign exchange translation gain                                 10,433    10,433 
Net loss                             (2,822,216)       (2,822,216)
Balance at September 30, 2023      $   $      2,181,912   $21,818   $96,013,029   $(93,063,582)  $(535,619)  $2,435,646 

 

See the accompanying notes to the unaudited condensed consolidated financial statements.

 

5

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   2024   2023 
   For the Nine Months Ended September 30, 
   2024   2023 
Cash Flows From Operating Activities:          
Net loss  $(6,420,341)  $(13,855,796)
Adjustments to reconcile net loss to cash used in operating activities          
Change in fair value of warrant liability   (20,722)   115,342 
Change in fair value of investment option liability   (18,664)   399,921 
Change in fair value of derivative liability       (727,000)
Stock-based compensation   1,090,716    1,785,432 
Amortization of right of use asset       64,246 
Amortization of intangibles   126,564    126,566 
Depreciation expense   128,438    132,734 
Gain on disposal of property and equipment       (4,219)
Change in operating assets and liabilities:          
Prepaid expenses and other current assets   (3,674)   (746,033)
Accounts payable and accrued liabilities   (1,296,907)   429,688 
Right-of-use operating lease asset and obligation       (64,244)
Net cash used in operating activities   (6,414,590)   (12,343,363)
           
Cash Flows From Investing Activities:          
Purchases of property and equipment       (5,195)
Proceeds from disposal of property and equipment       16,900 
Net cash provided by investing activities       11,705 
           
Cash Flows From Financing Activities:          
Proceeds from the subscription receivable related to the issuance of Inducement Warrants and the exercise of warrants and preferred investment options   1,804,819     
Proceeds from exercise of Inducement Warrants   2,676,980     
Proceeds from common stock sold under the Equity Distribution Agreement, net of offering costs   2,290,186     
Proceeds from common stock sold under the Purchase Agreement, net of offering costs   599,862     
Payment for offering costs previously accrued   (161,461)   (105,000)
Redemption of Series A Preferred Stock       (1,052,057)
Net cash provided by (used in) financing activities   7,210,386    (1,157,057)
           
Effect of Foreign Exchange Rate on Changes on Cash   27,910    31,399 
           
Net increase (decrease) in cash   823,706    (13,457,316)
Cash at beginning of period   2,287,977    17,723,884 
Cash at end of period  $3,111,683   $4,266,568 
           
Supplemental disclosure of cash and non-cash transactions:          
Cash paid for interest  $   $ 
Income taxes paid  $24,001   $6,595 
Offering costs accrued not paid  $35,455   $20,800 
Deferred offering costs charged to offering costs  $495,544     
Issuance of common shares for offering costs  $771,293   $ 
Preferred dividends attributable to redeemable non-controlling interest  $   $19,041 
Accretion of embedded derivative to redemption value  $   $147,988 

 

See the accompanying notes to the unaudited condensed consolidated financial statements.

 

6

 

 

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 developing novel neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety, and addiction disorders. The head office of the Company is located in Naples, Florida. The Company has the following wholly-owned subsidiaries: Jay Pharma Inc. (“Jay Pharma”), 1306432 B.C. Ltd., MagicMed Industries, Inc. (“MagicMed”), Enveric Biosciences Canada Inc., Akos Biosciences, Inc. (“Akos”), and Enveric Therapeutics, Pty. Ltd. (“Enveric Therapeutics”).

 

Leveraging its unique discovery and development platform, The Psybrary™, Enveric has created a robust intellectual property portfolio of new chemical entities for specific mental health indications. Enveric’s lead program, the EVM201 Series, comprises next generation synthetic prodrugs of the active metabolite, psilocin. Enveric is developing the first product from the EVM201 Series – EB-002 (formerly EB-373) – for the treatment of psychiatric disorders. Enveric is also advancing its product EB-003, a non-hallucinogenic neuroplastogen from the EVM301 Series, which is expected to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity without also inducing hallucinations in the patient.

 

The Company has continued to pursue the development of MagicMed’s proprietary library, the Psybrary™ which the Company believes will help to identify and develop the right drug candidates needed to address mental health challenges. The Company synthesizes novel analogues of serotonin, using a mixture of chemistry and synthetic biology, resulting in the expansion of the Psybrary™, which includes 15 patent families with over a million potential variations and hundreds of synthesized molecules. The Company has created over 1,200 novel molecular compounds and derivatives that are housed in the Psybrary™. The Company’s current focus is to develop its lead molecules, EB-002 and EB-003, and to out license other molecules from the Psybrary™.

 

The Company screens newly synthesized molecules in the Psybrary™ through PsyAI™, a proprietary artificial intelligence (“AI”) tool. Leveraging AI systems is expected to reduce the time and cost of pre-clinical, clinical, and commercial development. The Company believes it streamlines pharmaceutical design by predicting ideal binding structures of molecules, manufacturing capabilities, and pharmacological effects to help determine ideal drug candidates, tailored to each indication. Each of these molecules that the Company believes are patentable can then be further screened to see how changes to its makeup alter its effects in order to synthesize additional new molecules. New compounds of sufficient purity are undergoing pharmacological screening, including non-clinical (receptors/cell lines), preclinical (animal), and ultimately clinical (human) evaluations. The Company intends to utilize the Psybrary™ and the AI tool to categorize and characterize the Psybrary™ substituents to focus on bringing more non-hallucinogenic neuroplastogen molecules from discovery to the clinical phase.

 

Going Concern, Liquidity and Other Uncertainties

 

The Company has incurred a loss since inception resulting in an accumulated deficit of $102,919,859 as of September 30, 2024, and further losses are anticipated in the development of its business. For the nine months ended September 30, 2024, the Company has operating cash outflows of $6,414,590 and had a loss from operations of $6,458,440. Being a research and development company, since inception, 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 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, 2024, the Company had cash of $3,111,683 and working capital of $3,499,093. The Company’s current cash on hand is not sufficient to satisfy its operating cash needs for the 12 months from 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, the Purchase Agreement with Lincoln Park (see Note 7), subject to registration, 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 further cost-cutting measures including delaying or discontinuing certain operating activities.

 

7

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

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.

 

Inflation Risks

 

The Company considers the current inflationary trend existing in the North American economic environment reasonably likely to have a material unfavorable impact on results of continuing operations. Higher rates of price inflation, as compared to recent prior levels of price inflation, have caused a general increase in the cost of labor and materials. In addition, there is an increased risk of the Company experiencing labor shortages due to a potential inability to attract and retain human resources due to increased labor costs resulting from the current inflationary environment.

 

Nasdaq Notice

 

On November 21, 2023, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) stating that as of September 30, 2023, the Company did not meet the minimum of $2,500,000 in stockholders’ equity required for continued listing pursuant to Nasdaq Listing Rule 5550(b)(1). On February 6, 2024, the Company received a letter from Nasdaq, granting the Company an extension to regain compliance with the minimum stockholders’ equity requirement by May 20, 2024. On May 21, 2024, the Company received a letter from Nasdaq notifying the Company that it regained compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq.

 

On May 16, 2024, the Company received a letter from Nasdaq’s Listing Qualifications Department stating that because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive business days, the Company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Capital Market (the “Minimum Bid Price Requirement”). The Company received an initial period of 180 calendar days from May 16, 2024, or until November 12, 2024, to regain compliance with the Minimum Bid Price Requirement and was unable to regain compliance during that time. The Company has applied for a second 180-day compliance period. As of the date hereof, the Company has not heard whether it will be granted the second compliance period. The Company anticipates conducting a reverse split during the first or second quarter of 2025 in order to regain compliance with the Minimum Bid Price Requirement if the bid price of the Company’s common stock fails to close at or above $1.00 per share for a minimum of 10 consecutive business days prior the end of the second compliance period.

 

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, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2023, 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 26, 2024.

 

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, 2023. There were no significant changes to these accounting policies during the three and nine months ended September 30, 2024.

 

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 and preferred investment options, and 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.

 

8

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

重分类

 

某些 重分类已对以前期间未经审计的简明合并基本报表进行调整,以符合 当前年度的展示。在前一年,公司将某些与投资者相关的支出包含在未经审计的简明合并 运营报表的研究与开发中。这些支出在当前年度被重新分类为一般和行政费用。 这种重新分类对公司以前报告的运营结果、股权变动或现金流没有影响。

 

外币翻译

 

从创立到2024年9月30日,公司的报告货币为美元,而某些子公司的功能货币为加币和澳币。在截至2024年和2023年9月30日的报告期内,公司进行了若干以加币和澳币计价的交易。因此,公司面临着加币和澳币兑美元汇率变化带来的风险。

 

公司将其加拿大子公司和澳大利亚子公司的资产和负债按资产负债表日的汇率转换为美元。收入和支出按每月期间的平均汇率转换。未实现的汇率转换收益和损失作为外币汇率转换收益(损失)记录,作为累积其他综合损失的组成部分包含在未经审计的合并股东权益变动表中。

 

公司未进入任何会使其面临重大市场风险的金融衍生工具,包括任何旨在对冲外币风险的工具。然而,公司可能会在未来对冲外币汇率波动带来的风险。

 

调整 因以非当地货币计量的交易而产生的汇率变动所导致的损失计入未经审计的合并收益表和综合损失表中的其他综合 损失。

 

信贷风险集中

 

金融 金融工具可能使公司面临信用风险集中,包括在金融机构中的现金账户,这些账户在某些时候可能超过联邦存款保险的覆盖范围 $250,000 在美国和澳洲以及$100,000 在加拿大。 公司在这些账户上没有经历亏损,管理层认为公司并未面临这些账户的重大风险。截至2024年9月30日,公司在$250,000 在美国金融机构有超过$250,000 在澳大利亚金融机构有超过$100,000 在加拿大金融机构有少于$

 

研究和开发费用会在发生时计入运营成本。研发费用的主要组成部分包括工资、顾问、外部服务和用品。

 

研发费用作为费用发生时计入运营。研发费用包括但不限于与临床前开发、商业化前制造费用和临床试验相关的内部和外部成本。公司通过监控试验或提供的服务的状态以及收到的外部服务提供商的发票,为提供的服务所产生的费用进行计提。在临床试验的情况下,预计费用的一部分通常与试验中治疗患者的预期费用有关,该费用根据注册试验的患者人数进行确认。当实际费用明确时,公司相应地调整其计提。

 

所得税

 

本公司向美国联邦和州提交报税表。本公司的外国子公司也在其当地管辖区提交地方税务申报表。 从美国联邦、州以及加拿大的角度来看,仍然可以审查的年度与各管辖区的 诉讼时效一致。由于完全的估值备抵,该公司未能从经营亏损中获得任何税收利益。

 

研究和开发税收激励应收账款

 

公司通过其在澳洲的全资子公司参与澳洲的研究和开发税收激励计划, 因此,公司符合条件的研究和开发支出的一部分将由澳洲政府报销, 而这些激励将体现为研究和开发费用的减少。只有在合理确信将会收到激励、相关支出已发生且 相关金额可以可靠测量时,澳洲的研究和开发税收激励才会被确认。在每个期间末,管理层会根据当时可用的信息估计可供公司报销的金额。

 

9

 

 

ENVERIC BIOSCIENCES公司及其子公司

简明合并财务报表附注

 

每股亏损

 

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. 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, 2024 and 2023 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.

 

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, 2024 and 2023 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, 2024

  

For the three and nine months ended

September 30, 2023

 
Warrants to purchase shares of common stock   844,628    609,893 
Restricted stock units - vested and unissued   20,526    20,847 
Restricted stock units - unvested   351,616    148,251 
Investment options to purchase shares of common stock   70,000    1,070,000 
Options to purchase shares of common stock   23,082    31,852 
Total potentially dilutive securities   1,309,852    1,880,843 

 

Recent Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for all entities for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the potential impacts of ASU 2023-07, however as the Company currently has one reportable segment, does not expect this guidance will not have a material impact on its unaudited condensed consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amends the disclosure to address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. Early adoption is permitted. The Company is currently assessing potential impacts of ASU 2023-09 and does not expect the adoption of this guidance will have a material impact on its unaudited condensed consolidated financial statements and disclosures.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses, that requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements. The ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the potential impacts of ASU 2024-03.

 

10

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 3. PREPAID EXPENSES AND OTHER CURRENT ASSETS

 

As of September 30, 2024 and December 31, 2023, the prepaid expenses and other current assets of the Company consisted of the following:

 

   September 30, 2024   December 31, 2023 
Prepaid research and development  $106,138   $46,320 
Prepaid value-added taxes   245,972    243,429 
Prepaid insurance   249,048    149,559 
Prepaid other   99,061    62,036 
Deferred offering costs (see Note 7)   508,599    567,603 
Franchise tax receivable   17,758    79,258 
R&D tax incentive receivable       145,349 
Total prepaid expenses and other current assets  $1,226,576   $1,293,554 

 

NOTE 4. INTANGIBLE ASSETS

 

As of September 30, 2024, the Company’s intangible assets consisted of:

 

Definite lived intangible assets     
Balance at January 1, 2024  $210,932 
Amortization   (126,564)
Balance at September 30, 2024  $84,368 

 

For identified definite lived intangible assets, there was no impairment expense during the three and nine months ended September 30, 2024 and 2023. For identified definite lived intangible assets, amortization expense amounted to $42,188 and $42,191 during the three months ended September 30, 2024 and 2023, respectively and $126,564 and $126,566 during each of the nine months ended September 30, 2024 and 2023, respectively.

 

11

 

 

NOTE 5. PROPERTY AND EQUIPMENT

 

Property and equipment consists of the following assets which are located in Calgary, Canada, with all amounts converted into U.S. dollars:

 

   September 30, 2024   December 31, 2023 
Lab equipment  $819,784   $836,709 
Computer equipment and leasehold improvements   27,804    28,379 
Less: Accumulated depreciation   (479,899)   (357,711)
Property and equipment, net of accumulated depreciation  $367,689   $507,377 

 

Depreciation expense was $42,626 and $44,105 for the three months ended September 30, 2024 and 2023, respectively and $128,438 and $132,734 for the nine months ended September 30, 2024 and 2023, respectively.

 

NOTE 6. ACCRUED LIABILITIES

 

As of September 30, 2024 and December 31, 2023, the accrued liabilities of the Company consisted of the following:

 

   September 30, 2024   December 31, 2023 
Product development  $112,346   $139,981 
Accrued salaries, wages, and bonuses   8,736    8,889 
Professional fees   114,068    584,810 
Accrued restructuring costs (see Note 9)       301,645 
Accrued franchise taxes       22,318 
Patent costs   18,000    18,000 
Total accrued expenses  $253,150   $1,075,643 

 

12

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7. SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

 

Equity Distribution Agreement

 

On September 1, 2023, the Company entered into the Equity Distribution Agreement (the “Distribution Agreement”), with Canaccord Genuity LLC (“Canaccord”), pursuant to which the Company may offer and sell from time to time, through Canaccord as sales agent and/or principal, shares of common stock of the Company, par value $0.01 per share having an aggregate offering price of up to $10.0 million. Due to the offering limitations applicable to the Company and in accordance with the terms of the Distribution Agreement, the Company may offer Common Stock having an aggregate gross sales price of up to $2,392,514 pursuant to the prospectus supplement dated September 1, 2023 (the “Prospectus Supplement”). Subject to the terms and conditions of the Distribution Agreement, Canaccord may sell the Common Stock by any method permitted by law deemed to be an “at-the-market offering”. The Company will pay Canaccord a commission equal to 3.0% of the gross sales price of the Common Stock sold through Canaccord under the Distribution Agreement and has also agreed to reimburse Canaccord for certain expenses. The Company may also sell Common Stock to Canaccord as principal for Canaccord’s own account at a price agreed upon at the time of sale. Any sale of Common Stock to Canaccord as principal would be pursuant to the terms of a separate terms agreement between the Company and Canaccord.

 

During the nine months ended September 30, 2024, the Company issued 1,668,000 shares of common stock for gross proceeds of $2,392,502 under the Distribution Agreement, and charged offering costs of $583,713 to additional paid in capital on the unaudited condensed consolidated balance sheet. As of September 30, 2024 and December 31, 2023, there were deferred offering costs related to the Distribution Agreement of $0 and $171,944, respectively. As of September 30, 2024, there is $0 available under the Distribution Agreement.

 

On December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders (the “Holders”) of the February 2022 Post-Modification Warrants and RD and PIPE preferred investment options to purchase shares of the Company’s common stock (the “Existing Warrants and Investment Options”) pursuant to which the Holders agreed to exercise for cash their Existing Warrants and Investment Options to purchase 1,122,000 shares of the Company’s common stock, in the aggregate, at a reduced exercised price of $1.37 per share (from an original exercise price of $7.78 per share), in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) to purchase up to 2,244,000 shares of the Company’s common stock (the “Inducement Warrant Shares”), and the Holders to make a cash payment of $0.125 per Inducement Warrant share for total proceeds of $280,500. In January 2024, the Company received aggregate gross proceeds of $1,817,640 from the exercise of the Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants. Because the Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants that exercised on December 28, 2023 and unsettled until January 2024, the proceeds are included in the condensed consolidated balance sheet as a subscription receivable as of December 31, 2023. As of December 31, 2023, 418,000 shares of the Existing Warrants and Investment Options exercised were considered issued as the Company had the enforceable right to the obtain the cash proceeds, which were in-transit, and the Holders were no longer able to rescind the exercise election. Due to the beneficial ownership limitation provisions, 704,000 shares of the Existing Warrants and Investment Options exercised were initially unissued and held in abeyance for the benefit of the Holder until notice is received from the Holder that the shares may be issued in compliance with such limitation. During the nine months ended September 30, 2024, the Company issued all 704,000 shares of common stock of the 704,000 shares of Existing Warrants and Investment Options exercised that were held in abeyance due to the beneficial ownership limitation provisions.

 

On December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders of warrants and preferred investment options. The Inducement Letters prohibit the Company from entering into any variable rate transaction as defined in the Inducement Letters, including the issuance of (1) any variable priced debt or equity securities or (2) transactions whereby the Company may issue securities at a future determined price, such as through an at-the-market offering or an equity line of credit. The variable rate transaction restriction would have expired after six-months from the closing date of December 28, 2023 for the Inducement Letters for an issuance through an at-the-market offering, and one-year for the remaining variable rate transactions, however the restriction was waived for the at-the-market offering on March 8, 2024 and the equity line on May 3, 2024.

 

On March 8, 2024, the Company entered into a series of common stock purchase agreements for the issuance in a registered direct offering of 228,690 shares of the Company’s common stock to the Holders of the Inducement Warrants. The issuance was made in exchange for the permanent and irrevocable waiver of the variable rate transaction limitation solely with respect to the entry into and/or issuance of shares of common stock in an at the market offering contained in the Inducement Letters. The fair value of the shares issued for consideration of waiving the variable rate transaction limitation was $322,453 and was charged to additional paid in capital, as it is direct and incremental to the Distribution Agreement, on the unaudited condensed consolidated balance sheet as an offering cost related to the Distribution Agreement.

 

13

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Lincoln Park Equity Line

 

On November 3, 2023, the Company entered into a Purchase Agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park has committed to purchase up to $10.0 million of the Company’s common stock subject to certain limitations and satisfaction of the conditions set forth in the Purchase Agreement.

 

Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $10.0 million of the Company’s Common Stock (the “Purchase Shares”). However, such sales of Common Stock by the Company, if any, will be subject to important limitations set forth in the Purchase Agreement, including limitations on number of shares that may be sold. Sales may occur from time to time, at the Company’s sole discretion, over the 24-month period commencing on the date that the conditions to Lincoln Park’s purchase obligation set forth in the Purchase Agreement are satisfied, including that a registration statement on Form S-1 covering the resale of the shares of the Company’s Common Stock that have been and may be issued to Lincoln Park under the Purchase Agreement, which the Company has filed with the SEC pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC. As required under the Purchase Agreement, the Company registered a resale of 1,140,477 shares of our common stock, plus the 139,403 commitment shares, by Lincoln Park on a registration statement on Form S-1 dated November 8, 2023, which was declared effective by the SEC on December 5, 2023. As of July 30, 2024, there were no remaining shares available to be issued in connection with this registration statement. On September 4, 2024, the Company filed an amended Form S-1, which was declared effective by the SEC on September 11, 2024. The amended Form S-1 registered an additional 4,900,000 shares of common stock that are available to be issued to Lincoln Park in connection with this agreement.

 

Because the purchase price per share to be paid by Lincoln Park for the shares of Common Stock that the Company may elect to sell to Lincoln Park under the Purchase 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 to Lincoln Park pursuant to the Purchase Agreement, if any, it is not possible for us to predict the number of shares of Common Stock that the Company will sell to Lincoln Park under the Purchase Agreement, the purchase price per share that Lincoln Park will pay for shares purchased from us under the Purchase Agreement, or the aggregate gross proceeds that the Company will receive from those purchases by Lincoln Park under the Purchase Agreement.

 

On May 3, 2024, the Company entered into a series of common stock purchase agreements for the issuance in a registered direct offering of an aggregate of 458,000 shares of the Company’s common stock, to certain institutional investors. The issuance was made in exchange for the permanent and irrevocable waiver of the variable rate transaction limitation with respect to any existing or future agreement by the Company to effect any issuance of shares and issue such shares thereunder, as contained in those certain Inducement Offer Letters, dated December 28, 2023, between the Company and those certain institutional investors. The Company will not receive any net proceeds in connection with the offering. The fair value of the shares issued for consideration of waiving the variable rate transaction limitation was $448,840 and was recorded as deferred offering costs, as direct and incremental to the Purchase Agreement, within prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet related to the Purchase Agreement.

 

The common stock purchase agreements contain customary representations and warranties and certain indemnification obligations of the Company. The common stock purchase agreements also restrict the Company from issuing, entering into any agreement to issue, or announcing the issuance of the Company’s common stock from the date of the common stock purchase agreements until the earlier of 30 days after entering into the agreements or at such time as fifteen million (15,000,000) shares of the Company’s common stock have traded in the open market. The closing of the issuance of the Shares pursuant to the common stock purchase agreements closed on May 3, 2024.

 

During the three and nine months ended September 30, 2024, the Company had issued 1,090,477 and 1,215,477 shares of common stock, respectively, through the Purchase Agreement for gross cash proceeds of $517,836 and $600,686, respectively. During the three and nine months ended September 30, 2024, the Company charged offering costs of $290,029 and $372,879, respectively, to additional paid in capital on the unaudited condensed consolidated balance sheet. As of September 30, 2024 and December 31, 2023, the Company has capitalized deferred offering costs of $508,599 and $395,660, respectively. As of September 30, 2024, there were 4,825,000 shares available to be issued in connection with the Purchase Agreement.

 

14

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Stock Options

 

Amendment to 2020 Long-Term Incentive Plan

 

On November 2, 2023, the stockholders approved the amendments to the 2020 Long-Term Incentive Plan, which was approved by the Board on August 8, 2023 (the “Amended Incentive Plan”). The Amended Incentive Plan (i) increased the number of authorized shares reserved for issuance under the Amended Incentive Plan to a maximum of 350,000, subject to equitable adjustment, and (ii) removed the Evergreen Provision implemented in the Plan Amendment. During the first quarter of 2024, the Board approved an equitable adjustment to increase the number of shares available under the Plan by 134,779 shares. As of September 30, 2024, the total number of shares available for grant under the Incentive Plan was 6,257.

 

A summary of the stock option activity under the Company’s incentive plan for the nine months ended September 30, 2024 is presented below:

 

   Number of Shares   Weighted Average Exercise Price   Weighted Average Grant Date Fair Value   Weighted Average Remaining Contractual Term (years)   Aggregate Intrinsic Value 
Outstanding at December 31, 2023   30,329   $57.17   $77.22    3.4   $ 
Granted      $   $          
Forfeited   (7,247)  $39.35   $54.02          
Outstanding at September 30, 2024   23,082   $62.77   $84.51    2.6   $ 
                          
Exercisable at September 30, 2024   22,145   $65.30   $87.98    2.2   $ 

 

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, 2024 and 2023 was $414 and $44,606, 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, 2024 and 2023 was $(5,854) and $147,067, respectively.

 

As of September 30, 2024, the Company had $2,346 in unamortized stock option expense, which will be recognized over a weighted average period of 1.40 years.

 

Issuance of Restricted Stock Units

 

The Company’s activity in restricted stock units was as follows for the nine months ended September 30, 2024:

 

   Number of shares   Weighted average fair value 
Non-vested at December 31, 2023   140,491   $28.97 
Granted   251,500   $0.85 
Forfeited   (9,750)  $2.87 
Vested   (30,625)  $22.22 
Non-vested at September 30, 2024   351,616   $10.17 

 

For the three months ended September 30, 2024 and 2023, the Company recorded $369,200 and $328,253, 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, 2024 and 2023, the Company recorded $1,096,570 and $1,638,365, 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, 2024, the Company had unamortized stock-based compensation costs related to restricted stock units of $1,109,526 which will be recognized over a weighted average period of 1.57 years. As of September 30, 2024, 20,526 restricted stock units are vested without shares of common stock being issued, with all of these shares due as of September 30, 2024.

 

15

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following table summarizes the Company’s recognition of stock-based compensation for restricted stock units for the following periods:

 

Stock-based compensation expense for RSUs:  2024   2023   2024   2023 
   Three Months Ended September   Nine Months Ended September 
Stock-based compensation expense for RSUs:  2024   2023   2024   2023 
General and administrative  $162,042   $101,607   $476,513   $946,851 
Research and development   207,158    226,646    620,057    691,514 
Total  $369,200   $328,253   $1,096,570   $1,638,365 

 

Warrants and Preferred Investment Options

 

The following table summarizes information about shares issuable under warrants outstanding at September 30, 2024:

 

   Warrant shares outstanding   Weighted average exercise price   Weighted average remaining life   Intrinsic value 
Outstanding at December 31, 2023   2,799,213   $11.79    4.6   $ 
Expired   (585)   160.00       $ 
Exercised   (1,954,000)   1.37       $ 
Outstanding at September 30, 2024   844,628   $35.78    3.0   $ 
                     
Exercisable at September 30, 2024   844,628   $35.78    3.0   $ 

 

The following table summarizes information about investment options outstanding at September 30, 2024:

 

   Investment options outstanding   Weighted average exercise price   Weighted average remaining life   Intrinsic value 
Outstanding at December 31, 2023   70,000   $10.00    4.1   $ 
Outstanding at September 30, 2024   70,000   $10.00    2.9   $ 
                     
Exercisable at September 30, 2024   70,000   $10.00    2.9   $ 

 

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 agreement as of September 30, 2024.

 

16

 

 

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

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.

 

Australian Subsidiary Research and Development

 

On March 23, 2023, the Company issued a press release announcing the selection of Australian CRO, Avance Clinical, in preparation for Phase 1 Study of EB-002, the Company’s lead candidate targeting the treatment of anxiety disorders. Under the agreement, Avance Clinical will manage the Phase 1 clinical trial of EB-002 in coordination with the Company’s newly established Australian subsidiary, Enveric Therapeutics Pty, Ltd. The Phase 1 clinical trial is designed as a multi-cohort, dose-ascending study to measure the safety and tolerability of EB-002. EB-002, a next-generation proprietary psilocin prodrug, has been recognized as a New Chemical Entity (NCE) by Australia’s Therapeutic Goods Administration and is currently in preclinical development targeting the treatment of anxiety disorder. The total cost of the Avance Clinical contract is approximately 3,400,000 AUD, which translates to approximately $2,329,000 USD as of September 30, 2024. As of September 30, 2024, the Company has paid 100% of the Avance Clinical contract costs and has $0 recorded as prepaid assets within prepaid and other current assets, accrued $0 recorded as accrued liabilities and $0 as accounts payable on the accompanying condensed consolidated balance sheet. For the three and nine months ended September 30, 2024 and 2023, the Company has expensed $264,385 and $508,774, and $157,117 and $401,284, respectively, in research and development expenses within the accompanying unaudited condensed consolidated statement of operations. As of September 30, 2024, all payments have been made and the project is substantially completed.

 

According to Australian tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in Australia for expenses incurred in R&D subject to certain requirements. The Company’s Australian subsidiary submits R&D tax credit requests annually for research and development expenses incurred. At September 30, 2024 and December 31, 2023, the Company had a research and development tax credit receivable of $0 and $145,349, respectively, for R&D expenses incurred in Australia, included in prepaid and other current assets within the accompanying unaudited condensed consolidated statement of operations. The Company received the amount due in relation to the research and development tax credit during the three months ended September 30, 2024.

 

Purchase agreement with Prof. Zvi Vogel and Dr. Ilana Nathan

 

On December 26, 2017, Jay Pharma entered into a purchase agreement with Prof. Zvi Vogel and Dr. Ilana Nathan (the “Vogel-Nathan Purchase Agreement”), pursuant to which Jay Pharma was assigned ownership rights to certain patents, which were filed and unissued as of the date of the Vogel-Nathan Purchase Agreement. The patent portfolio acquired and developed under the Vogel-Nathan Purchase Agreement was sold to undisclosed buyers for an amount not material to these financials in the first quarter of 2024. No additional financial or other obligations exist regarding the Vogel-Nathan Purchase Agreement.

 

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 $0.1 million in future cash payments, inclusive of amounts in accounts payable.

 

Reduction in Force/Restructuring

 

In May 2023, the Company entered into a cost reduction plan, including a reduction in force (“RIF”) of approximately 35% of its full-time employees to streamline its operations and conserve cash resources. Additionally, contracts with seven consultants that were focused on the Akos cannabinoid spin-out were terminated. The plan included a focus on progressing the Company’s existing non-cannabinoid pipeline while reducing the rate of spend and managing cash flow. In June 2023, the Company completed the reduction in force, with such severance expenses recorded in general and administrative accounts.

 

In June 2023, the Company entered into a separation agreement with Avani Kanubaddi, the Company’s President and Chief Operating Officer (the “Kanubaddi Separation Agreement”). In accordance with the Kanubaddi Separation Agreement, Mr. Kanubaddi received salary and benefits that is paid out in twelve monthly installments beginning in July 2023, was eligible for his 2023 performance bonus, which was not achieved, and any outstanding restricted stock units retained their vesting conditions.

 

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ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following table summarizes the Reduction in Force/Restructuring activity and ending balance at September 30, 2024 for the remaining severance payments included in accrued expenses in the consolidated balance sheet:

 

   Accrued Restructuring Costs 
January 1, 2024 beginning balance  $301,645 
Restructuring costs paid   (301,645)
September 30, 2024 ending balance  $ 

 

NOTE 10. SUBSEQUENT EVENTS

 

Subsequent to September 30, 2024, the Company issued 950,000 shares of common stock through the Purchase Agreement with Lincoln Park for gross cash proceeds of $405,820. As of November 12, 2024, there are 3,875,000 remaining registered shares available to be issued in connection with this agreement.

 

On October 9, 2024, the Company granted 386,633 restricted stock units to its officers and certain employees, which fully vest on October 9, 2028 and 218,776 restricted stock awards to its non-employee directors, which fully vest on December 31, 2024.

 

Effective October 9, 2024, the Board approved an equitable adjustment to increase the number of shares available under the Incentive Plan by 966,026 shares, which increased the total number of authorized shares under the Incentive Plan to 1,450,805 shares.

 

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 will receive modest upfront payments, and if certain conditions are met, will receive development and sales milestone payments of up to $62 million and tiered single-digit royalties based on future sales. MycoMedica has the option during the license term to buyout its milestone and royalty payment obligations at a predetermined amount depending upon the stage of product development and commercialization at the time of the buyout. Further, MycoMedica has the right to purchase the licensed patents at a nominal amount upon a change of control of the Company, although doing so does not relieve MycoMedica of any of its payment obligations.

 

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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, or projections described under the sections in this Form 10-Q entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These risks and uncertainties include, but are not limited to:

 

our dependence on the success of our prospective product candidates, which are in the early stages of development and may not reach a particular stage in development, receive regulatory approval, or be successfully commercialized;
   
potential difficulties that may delay, suspend, or scale back our efforts to advance additional early research programs through preclinical development and investigational new drug (“IND”) application filings and into clinical development;
   
the limited study on the effects of medical psychedelics, and the chance that future clinical research studies may lead to conclusions that dispute or conflict with our understanding and belief regarding the medical benefits, viability, safety, efficacy, dosing, and social acceptance of psychedelics;
   
the expensive, time-consuming, and uncertain nature of clinical trials, which are susceptible to change, delays, termination, and differing interpretations;
   
the ability to establish that potential products are efficacious or safe in preclinical or clinical trials;
   
the fact that our current and future preclinical and clinical studies may be conducted outside the United States, and the United States Food and Drug Administration may not accept data from such studies to support any new drug applications we may submit after completing the applicable developmental and regulatory prerequisites;
   
our ability to effectively and efficiently build, maintain and legally protect our molecular derivatives library so that it can be an essential building block from which those in the biotech industry can develop new patented products;
   
our ability to establish or maintain collaborations on the development of therapeutic candidates;
   
our ability to obtain appropriate or necessary governmental approvals to market potential products;
   
our ability to manufacture product candidates on a commercial scale or in collaborations with third parties;
   
our significant and increasing liquidity needs and potential requirements for additional funding;
   
our ability to obtain future funding for developing products and working capital and to obtain such funding on commercially reasonable terms;

 

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legislative changes related to and affecting the healthcare system, including, without limitation, changes and proposed changes to the Patient Protection and Affordable Care Act;
   
the intense competition we face, often from companies with greater resources and experience than us;
   
our ability to retain key executives and scientists;
   
the ability to secure and enforce legal rights related to our products, including intellectual property rights and patent protection;
   
political, economic, and military instability in Israel which may impede our development programs;
   
our success at managing the risks involved in the foregoing; and
   
the risk of loss in excess of insurance limitations on funds held in U.S Banking Institutions.

 

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 our periodic reports, including Part I, Item IA of the Annual Report on Form 10-K for the year ended December 31, 2023, and Part II, Item IA of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 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

 

We are a biotechnology company dedicated to the development of novel neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety, and addiction disorders. Leveraging our unique discovery and development platform, the Psybrary™, we have created a robust intellectual property portfolio of new chemical entities for specific mental health indications. Our lead program, the EVM201 Series, comprises next generation synthetic prodrugs of the active metabolite, psilocin. We are developing the first product from the EVM201 Series – EB-002 – for the treatment of psychiatric disorders. We are also advancing its second program, the EVM301 Series – EB 003, a non-hallucinogenic neuroplastogen – expected to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity without also inducing hallucinations in the patient.

 

Psychedelics

 

We have continued to pursue the development of MagicMed’s proprietary library, the Psybrary™ which we believe will help us to identify and develop the right drug candidates needed to address mental health challenges, including anxiety. We synthesize novel analogues of serotonin using a mixture of chemistry and synthetic biology, resulting in the expansion of the Psybrary™, which includes 15 patent families with over a million potential variations and hundreds of synthesized molecules. The Company has created over 1,200 novel molecular compounds that are housed in the Psybrary™. Our current focus is develop our lead molecules EB-002 and EB-003, a non-hallucinogenic neuroplastogen, and to out-license other molecules from the Psybrary™.

 

Recent Developments

 

Equity Distribution Agreement

 

During the nine months ended September 30, 2024, the Company issued 1,668,000 shares of common stock for gross proceeds of $2,392,502 under the Distribution Agreement, and charged offering costs of $583,713 to additional paid in capital on the unaudited condensed consolidated balance sheet. As of September 30, 2024 and December 31, 2023, there were deferred offering costs related to the Distribution Agreement of $0 and $171,944, respectively.

 

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On December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders (the “Holders”) of the February 2022 Post-Modification Warrants and RD and PIPE preferred investment options to purchase shares of the Company’s common stock (the “Existing Warrants and Investment Options”) pursuant to which the Holders agreed to exercise for cash their Existing Warrants and Investment Options to purchase 1,122,000 shares of the Company’s common stock, in the aggregate, at a reduced exercised price of $1.37 per share (from an original exercise price of $7.78 per share), in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) to purchase up to 2,244,000 shares of the Company’s common stock (the “Inducement Warrant Shares”), and the Holders to make a cash payment of $0.125 per Inducement Warrant share for total proceeds of $280,500. In January 2024, the Company received aggregate gross proceeds of $1,817,640 from the exercise of the Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants. Because the Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants that exercised on December 28, 2023 and unsettled until January 2024, the proceeds are included in the condensed consolidated balance sheet as a subscription receivable as of December 31, 2023. As of December 31, 2023, 418,000 shares of the Existing Warrants and Investment Options exercised were considered issued as the Company had the enforceable right to the obtain the cash proceeds, which were in-transit, and the Holders were no longer able to rescind the exercise election. Due to the beneficial ownership limitation provisions, 704,000 shares of the Existing Warrants and Investment Options exercised were initially unissued and held in abeyance for the benefit of the Holder until notice is received from the Holder that the shares may be issued in compliance with such limitation. During the nine months ended September 30, 2024, the Company issued all 704,000 shares of common stock of the 704,000 shares of Existing Warrants and Investment Options exercised that were held in abeyance due to the beneficial ownership limitation provisions.

 

On December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders of warrants and preferred investment options. The Inducement Letters prohibit the Company from entering into any variable rate transaction as defined in the Inducement Letters, including the issuance of (1) any variable priced debt or equity securities or (2) transactions whereby the Company may issue securities at a future determined price, such as through an at-the-market offering or an equity line of credit. The variable rate transaction restriction would have expired after six-months from the closing date of December 28, 2023 for the Inducement Letters for an issuance through an at-the-market offering, and one-year for the remaining variable rate transactions, however the restriction was waived for the at-the-market offering on March 8, 2024 and the equity line on May 3, 2024.

 

On March 8, 2024, the Company entered into a series of common stock purchase agreements for the issuance in a registered direct offering of 228,690 shares of the Company’s common stock, par value $0.01 per share to the Holders of the Inducement Warrants. The issuance was made in exchange for the permanent and irrevocable waiver of the variable rate transaction limitation solely with respect to the entry into and/or issuance of shares of common stock in an at the market offering contained in the Inducement Letters. The fair value of the shares issued for consideration of waiving the variable rate transaction limitation was $322,453 and was charged to additional paid in capital on the unaudited condensed consolidated balance sheet as an offering cost related to the Distribution Agreement.

 

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Lincoln Park Equity Line

 

During the three and nine months ended September 30, 2024, the Company had issued 1,090,477 and 1,215,477 shares of common stock, respectively, through the Purchase Agreement for gross cash proceeds of $517,836 and $600,686, respectively. During the three and nine months ended September 30, 2024, the Company charged offering costs of $290,029 and $372,879, respectively, to additional paid in capital on the unaudited condensed consolidated balance sheet. As of September 30, 2024 and December 31, 2023, the Company has capitalized deferred offering costs of $508,599 and $395,660, respectively.

 

On May 3, 2024, the Company entered into a series of common stock purchase agreements for the issuance in a registered direct offering of an aggregate of 458,000 shares of the Company’s common stock, to certain institutional investors. The issuance was made in exchange for the permanent and irrevocable waiver of the variable rate transaction limitation with respect to any existing or future agreement by the Company to effect any issuance of shares and issue such shares thereunder, as contained in those certain Inducement Offer Letters, dated December 28, 2023, between the Company and those certain institutional investors. The Company will not receive any net proceeds in connection with the offering. The fair value of the shares issued for consideration of waiving the variable rate transaction limitation was $448,840 and was recorded as deferred offering costs within prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet related to the Purchase Agreement.

 

As of July 30, 2024, there were no remaining shares available to be issued in connection with the initial registration statement. On September 4, 2024, the Company filed an amended Form S-1, which registered an additional 4,900,000 shares of common stock that are available to be issued to Lincoln Park in connection with this agreement. From July through November 12, 2024, under the initial registration statement and the amended Form S-1, the Company issued 2,040,477 shares of common stock through the Purchase Agreement with Lincoln Park for gross cash proceeds of $923,656. As of November 12, 2024, there are 3,875,000 remaining shares available to be issued in connection with the amended Form S-1.

 

Inducement Warrants

 

On February 29, 2024, a Holder of the Inducement Warrants, exercised 1,954,000 Inducement Warrants at an exercise price of $1.37 per share for 1,954,000 shares of the Company’s common stock for total gross proceeds of $2,676,980.

 

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Results of Operations

 

The following table sets forth information comparing the components of net loss for the three months ended September 30, 2024 and 2023:

 

   For the Three Months Ended September 30, 
   2024   2023 
Operating expenses          
General and administrative  $1,235,661   $2,080,644 
Research and development   762,717    1,281,455 
Depreciation and amortization   84,814    86,296 
Total operating expenses   2,083,192    3,448,395 
           
Loss from operations   (2,083,192)   (3,448,395)
           
Other income (expense)          
Change in fair value of warrant liabilities   (122)   67,822 
Change in fair value of investment option liability   (501)   562,715 
Interest income (expense), net   (217)   2,237 
Total other income (expense)   (840)   632,774 
           
Net loss before income taxes  $(2,084,032)  $(2,815,621)
           
Income tax expense       (6,595)
           
Net loss  $(2,084,032)  $(2,822,216)

 

General and Administrative Expenses

 

Our general and administrative expenses decreased to $1,235,661 for the three months ended September 30, 2024 from $2,080,644 for the three months ended September 30, 2023, a decrease of $844,983, or 41%. This change was primarily driven by decreases in consulting expenses of $138,778, salaries and wages of $263,764, and legal fees of $192,941, all a direct result of the second quarter 2023 reduction in force and no longer pursuing the transfer and spin-off its cannabinoid clinical development pipeline assets to Akos Biosciences, Inc.

 

Research and Development Expenses

 

Our research and development expense for the three months ended September 30, 2024 was $762,717 as compared to $1,281,455 for the three months ended September 30, 2023 with a decrease of $518,738, or approximately 40%. This decrease was primarily driven by a decrease in CRO expense of $4,206, salaries and wages of $212,377, and product development of $208,312.

 

Depreciation and Amortization Expense

 

Depreciation and amortization expense for the three months ended September 30, 2024 was $84,814 as compared to $86,296 for the three months ended September 30, 2023, with a decrease of $1,482, or approximately 2%.

 

Change in Fair Value of Warrant Liabilities

 

Change in fair value of warrant liabilities for the three months ended September 30, 2024 resulted in an expense of $122 as compared to income of $67,822 for the three months ended September 30, 2023. The change in fair value of warrant liabilities is due to the exercise of 122,000 of warrants on December 28, 2023, resulting in less warrants outstanding and re-valued at September 30, 2024, as well as, the change in the closing price of Common Stock at the end of each period, as compared to the closing price of Common Stock at the beginning of each period with a strong inverse relationship between changes in fair value of warrant liabilities and the trading price of Common Stock.

 

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Change in Fair Value of Investment Option Liability

 

Change in fair value of investment option liability the three months ended September 30, 2024 resulted in an expense of $501 as compared to income of $562,715 during the three months ended September 30, 2023. The change in fair value is due to the exercise of 1,000,000 investment options on December 28, 2023, resulting in less investment options re-valued at September 30, 2024 and a significant decrease in the Company’s stock price for the three months ended September 30, 2024.

 

The following table sets forth information comparing the components of net loss for the nine months ended September 30, 2024 and 2023:

 

   For the Nine Months Ended September 30, 
   2024   2023 
Operating expenses          
General and administrative  $4,467,065   $8,273,344 
Research and development   1,736,373    5,531,436 
Depreciation and amortization   255,002    259,300 
Total operating expenses   6,458,440    14,064,080 
           
Loss from operations   (6,458,440)   (14,064,080)
           
Other income (expense)          
Change in fair value of warrant liabilities   20,722    (115,342)
Change in fair value of investment option liability   18,664    (399,921)
Change in fair value of derivative liability       727,000 
Interest income, net   444    3,142 
Total other income (expense)   39,830    214,879 
           
Net loss before income taxes  $(6,418,610)  $(13,849,201)
           
Income tax expense   (1,731)   (6,595)
           
Net loss  $(6,420,341)  $(13,855,796)

 

General and Administrative Expenses

 

Our general and administrative expenses decreased to $4,467,065 for the nine months ended September 30, 2024 from $8,273,344 for the nine months ended September 30, 2023, a decrease of $3,806,279, or 46%. This change was primarily driven by decreases in consulting expenses of $836,437, salaries and wages of $1,305,710, stock compensation expense of $623,259, investor relations of $313,509, legal fees of $487,863, and accounting fees of $227,200, all a direct result of the second quarter 2023 reduction in force and no longer pursuing the transfer and spin-off its cannabinoid clinical development pipeline assets to Akos Biosciences, Inc., and Delaware franchise taxes of $246,144 partially offset by an increase in director fees of $107,186.

 

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Research and Development Expenses

 

Our research and development expense for the nine months ended September 30, 2024 was $1,736,373 as compared to $5,531,436 for the nine months ended September 30, 2023 with a decrease of $3,795,063, or approximately 69%. This decrease was primarily driven by a decrease salaries and wages of $1,542,075, research costs of $1,056,511, product development costs of $532,063, CRO costs of $128,560 and the gain realized related to the Australian R&D tax incentive of $291,439.

 

Depreciation and Amortization Expense

 

Depreciation and amortization expense for the nine months ended September 30, 2024 was $255,002 as compared to $259,300 for the nine months ended September 30, 2023, with a decrease of $4,298, or approximately 2%.

 

Change in Fair Value of Warrant Liabilities

 

Change in fair value of warrant liabilities for the nine months ended September 30, 2024 resulted in income of $20,722 as compared to a loss of $115,342 for the nine months ended September 30, 2023. The change in fair value of warrant liabilities is due to the exercise of 122,000 of warrants on December 28, 2023, resulting in less warrants outstanding and re-valued at September 30, 2024, as well as, the change in the closing price of Common Stock at the end of each period, as compared to the closing price of Common Stock at the beginning of each period with a strong inverse relationship between changes in fair value of warrant liabilities and the trading price of Common Stock.

 

Change in Fair Value of Investment Option Liability

 

Change in fair value of investment option liability the nine months ended September 30, 2024 resulted in income of $18,664 as compared to a loss of $399,921 during the nine months ended September 30, 2023. The change in fair value is due to the exercise of 1,000,000 investment options on December 28, 2023, resulting in less investment options re-valued at September 30, 2024 and a significant decrease in the Company’s stock price for the nine months ended September 30, 2024.

 

Change in Fair Value of Derivative Liability

 

The Company’s change in fair value of derivative liability is due to the May 2023 redemption which ceased the probability of occurrence of the Akos spin-off and Akos Series A Preferred Stock redemption.

 

Going Concern, Liquidity and Capital Resources

 

The Company has incurred a loss since inception resulting in an accumulated deficit of $102,919,859 as of September 30, 2024 and further losses are anticipated in the development of its business. Further, the Company had operating cash outflows of $6,414,590 for the nine months ended September 30, 2024. For the nine months ended September 30, 2024, the Company had a loss from operations of $6,458,440. 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, 2024, the Company had cash of $3,111,683 and working capital of $3,499,093. 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.

 

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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, 2024 and 2023:

 

The following table sets forth a summary of cash flows for the years presented:

 

   For the Nine Months Ended September 
   2024   2023 
Net cash used in operating activities  $(6,414,590)  $(12,343,363)
Net cash provided by investing activities       11,705 
Net cash provided by (used in) financing activities   7,210,386    (1,157,057)
Effect of Foreign Exchange Rate on Changes on Cash   27,910    31,399 
Net increase (decrease) in cash  $823,706   $(13,457,316)

 

Operating Activities

 

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 and 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.

 

Net cash used in operating activities was $12,343,363 during the nine months ended September 30, 2023, which consisted primarily of a net loss adjusted for non-cash items of $11,962,774, an increase in prepaid expenses and other current assets of $746,033, offset by an increase in accounts payable and accrued liabilities of $429,688.

 

Investing Activities

 

Net cash used in investing activities was $0 during the nine months ended September 30, 2024.

 

Net cash provided by investing activities was $11,705 during the nine months ended September 30, 2023, which consisted of proceeds from disposal of property and equipment of $16,900, offset by the purchase of property and equipment of $5,195.

 

Financing Activities

 

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 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 the 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.

 

Net cash used in financing activities was $1,157,057 during the nine months ended September 30, 2023, which consisted of the redemption of redeemable non-controlling interest and payment of deferred offering costs.

 

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, 2023.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Our primary market risk exposure is foreign currency exchange risk. From inception through September 30, 2024, the Company’s reporting currency is the United States dollar while the functional currency of certain of the Company’s subsidiaries is the Canadian dollar and Australian dollar. For the reporting periods ended September 30, 2024 and September 30, 2023, 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. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The matters that management identified in our Annual Report for the year ended December 31, 2023, continued to exist and were still considered material weaknesses in our internal control over financial reporting at September 30, 2024.

 

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, 2024. Based on this evaluation, and in light of the material weaknesses found in our internal controls over financial reporting, 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, 2024.

 

Management’s Remediation Plan

 

As previously discussed in our Annual Report on Form 10-K for the year ended December 31, 2023, management had concluded that our internal control over financial reporting was not effective as of December 31, 2023, 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.

 

As of September 30, 2024, there were control deficiencies that constituted a material weakness in our 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.

 

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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 discussed above in 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, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

The Company may be periodically involved in legal proceedings, legal actions and claims arising in the ordinary course of business. We do not have any pending litigation that, separately or in the aggregate, would, in the opinion of management, 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, 2023 as filed with the SEC on March 26, 2024 and the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, as filed with the SEC on May 15, 2024 and August 12, 2024, respectively. 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, other than as described below, there have been no material changes to the risk factors disclosed in the Company’s Annual Report.

 

In the event that we fail to regain compliance with the listing requirements of The Nasdaq Capital Market or satisfy any of the listing requirements of Nasdaq, our common stock may be delisted, which could affect our market price and liquidity.

 

Our common stock is listed on Nasdaq. For continued listing on Nasdaq, we will be required to comply with the continued listing requirements, including the minimum market capitalization standard, the stockholders’ equity requirement, the corporate governance requirements and the minimum closing bid price requirement, among other requirements. On May 16, 2024, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market stating that because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive business days, the Company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Capital Market (the “Minimum Bid Price Requirement”). The Company received an initial period of 180 calendar days from May 16, 2024, or until November 12, 2024, to regain compliance with the Minimum Bid Price Requirement and was unable to regain compliance during that time. The Company has applied for a second 180-day compliance period. As of the date hereof, the Company has not heard whether it will be granted the second compliance period. The Company anticipates conducting a reverse split during the first or second quarter of 2025 in order to regain compliance with the Minimum Bid Price Requirement if the bid price of the Company’s common stock fails to close at or above $1.00 per share for a minimum of 10 consecutive business days prior the end of the second compliance period.

 

In the event that we fail to receive a second compliance period, or to otherwise regain compliance with the Minimum Bid Price Requirement or satisfy any of the listing requirements of Nasdaq, our common stock may be delisted. We will have an opportunity to appeal the determination to a Hearings Panel, but we cannot guarantee that such appeal will be successful. If we are unable to list on Nasdaq, we would likely be more difficult to trade in or obtain accurate quotations as to the market price of our common stock. If our common stock is delisted from trading on Nasdaq, and we are not able to list our common stock on another exchange or to have it quoted on Nasdaq, our securities could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, we could face significant adverse consequences including, without limitation:

 

a limited availability of market quotations for our securities;

 

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a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
   
a limited amount of news and analyst coverage for our Company; and
   
a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain additional financing in the future).

 

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

 

INDEX TO EXHIBITS

 

Exhibit No.   Description
10.1   Exclusive License Agreement, dated July 10, 2024, between Akos Biosciences, Inc. and Aries Science and Technology, LLC ***
31.1   Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer
31.2   Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Financial and Accounting Officer
32.1   Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer, Principal Financial and Accounting Officer
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*** Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ENVERIC BIOSCIENCES, INC.
     
November 14, 2024 By: /s/ Dr. Joseph Tucker
    Joseph Tucker, Ph.D
    Chief Executive Officer
    (Principal Executive Officer)

 

November 14, 2024

By: /s/ Kevin Coveney
    Kevin Coveney
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

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