Management's discussion and analysis of financial condition and results of operations
The information set forth below should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless stated otherwise, references in this Quarterly Report on Form 10-Q to "us," "we," "our," or our "Company" and similar terms refer to Enveric Biosciences, Inc., a Delaware corporation, and its subsidiaries
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this "Form 10-Q") contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as "anticipates," "assumes," "believes," "can," "could," "estimates," "expects," "forecasts," "guides," "intends," "may," "plans," "seeks," "projects," "targets," and "would" or the negative of such terms or other variations on such terms or comparable terminology. Such forward-looking statements include, but are not limited to, future financial and operating results, the Company's plans, objectives, expectations and intentions and other statements that are not historical facts. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from our historical experience and our present expectations. These risks and uncertainties include, but are not limited to:
| ● | our 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 risk that the cost savings, synergies and growth from our combination with MagicMed and the successful use of the rights and technologies acquired in the combination may not be fully realized or may take longer to realize than expected; | |
| ● | the limited study on the effects of psychedelic-inspired compounds, 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 psychedelic-inspired compounds; | |
| ● | 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; | |
| ● | our ability to continue as a going concern; |
| ● | legislative changes related to and affecting the healthcare system, including, without limitation, changes and proposed changes to the Patient Protection and Affordable Care Act ("PPACA"); | |
| ● | 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; | |
| ● | adverse macroeconomic conditions; geopolitical tensions; laws and policies resulting from federal and state governments in the United States and Canada; the impact of tariffs, any retaliatory tariffs, and other trade protective measures (including tariffs that have been or may in the future be imposed by the United States or other countries); and | |
| ● | our success at managing the risks involved in the foregoing. |
For a more detailed discussion of these and other factors that may affect our business and that could cause the actual results to differ materially from those projected in these forward-looking statements, see the risk factors and uncertainties set forth in Part II, Item 1A of this Form 10-Q and Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise, except as required by law.
Business Overview
We are a biotechnology company dedicated to the development of novel neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety, addiction, and other psychiatric disorders. Leveraging our unique discovery and development Psybrary™ platform, which houses proprietary information on the use and development of existing and novel molecules for specific mental health indications, we seek to develop a robust intellectual property portfolio of novel drug candidates.
Our lead program, the EVM301 Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations in the patient. We unveiled a EVM401 Series on February 25, 2025, which is intended to broaden our pipeline with additional non-hallucinogenic molecules and strengthen our ability to target addiction and neuropsychiatric disorders for patients with limited options. Previously, we were developing the EVM201 Series, and its drug candidate EB-002 (formerly EB-373), for the treatment of neuropsychiatric disorders. The EVM201 Series comprised next generation synthetic prodrugs of the active metabolite, psilocin. In the fourth quarter of 2024, we out-licensed the EVM201 Series program to MycoMedica Life Sciences, who will seek to develop, manufacture, and commercialize EB-002, in exchange for certain development and milestone payments to us (discussed below).
Neuroplastogens
Following our amalgamation with MagicMed in September 2021, we have continued to pursue the development of MagicMed's Psybrary™, its proprietary library, which we believe will help us to identify and develop the right drug candidates needed to address mental health challenges, including depression, anxiety, and addiction disorders. We synthesize novel phenylalkylamines and indolethylamines, using a mixture of chemistry and synthetic biology, resulting in the expansion of the Psybrary™, which currently includes 20 patent families with claims covering a million potential molecular structures, over one thousand of which we have so far synthesized in sufficient quantities to identify and hundreds of which we have screened for receptor binding and other relevant activities.
The Company developed certain intellectual property rights around the trademark PsyAI™ for potential use. On March 6, 2025, Enveric announced it is soliciting Requests-For Proposals ("RFPs") for the license or sale of its PsyAI™ trademark portfolio as a means of maximizing value for an asset which is no longer strategic given the Company's focus on drug development. This limited portfolio of US and Canadian trademark assets is held by its subsidiary, Enveric Biosciences Canada, Inc. Enveric expects the period for RFPs to remain open until August 31, 2025, with a decision to follow within three (3) months thereafter.
We have entered into several out-license agreements with strategic partners for specific molecules from the Psybrary™. Going forward, in order to build a pipeline of product candidates, we intend to both continue to internally develop new drug candidates with associated intellectual property and to acquire, through in-licensing, additional intellectual property from pharmaceutical and biotechnology companies and research institutions. The in-licensed assets could include both research stage and clinical stage drug candidates.
While we intend to pursue development of the EVM401 Series, our primary focus is to develop our lead asset EB-003 in the EVM301 Series. The development status of the product is shown in the table below:
| Product Candidates | Targeted Indications | Status | Expected Next Steps | |||
| EB-003 | Mental health indication | Preclinical Development | IND Filing |
Psychedelic-inspired drug candidate
Recent Developments
At the Market Offering
The Company entered into an at the market offering agreement, or the ("ATM Agreement"), with H.C. Wainwright & Co., LLC, or ("Wainwright"), acting as sales agent, on April 9, 2025, relating to shares of Common Stock. Under the ATM Agreement, the Company may offer and sell shares of Common Stock having an aggregate offering price of up to $1,854,151 from time to time through Wainwright. As of June 30, 2025, the Company has issued 554,372 shares under the ATM Agreement for net cash proceeds of $555,504.
Results of Operations
The following table sets forth information comparing the components of net loss for the three months ended June 30, 2025 and 2024:
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | 1,219,018 | $ | 1,248,151 | ||||
| Research and development | 1,260,051 | 565,001 | ||||||
| Depreciation and amortization | 39,980 | 84,779 | ||||||
| Total operating expenses | 2,519,049 | 1,897,931 | ||||||
| Loss from operations | (2,519,049 | ) | (1,897,931 | ) | ||||
| Other (expense) income | ||||||||
| Other income | - | 18,572 | ||||||
| Interest (expense) income, net | (132 | ) | (35 | ) | ||||
| Total other (expense) income | (132 | ) | 18,537 | |||||
| Net loss before income taxes | $ | (2,519,181 | ) | $ | (1,879,394 | ) | ||
| Income tax expense | - | - | ||||||
| Net loss | $ | (2,519,181 | ) | $ | (1,879,394 | ) | ||
General and Administrative Expenses
Our general and administrative expenses decreased to $1,219,018 for the three months ended June 30, 2025 from $1,248,151 for the three months ended June 30, 2024, a decrease of $29,133, or 2%. This change was primarily driven by decreases in stock-based compensation expense of $59,614 and insurance expense of $25,398, offset by increases in salaries and wages of $56,726.
Research and Development Expenses
Our research and development expenses for the three months ended June 30, 2025 were $1,260,051 as compared to $565,001 for the three months ended June 30, 2024, for an increase of $695,050, or approximately 123%. This change was primarily driven by an increase in consulting fees of $832,923 and in CRO costs of $154,354, offset by decreases in salaries and wages of $146,820 and an Australian R&D tax incentive of $140,396.
Depreciation and Amortization Expense
Depreciation and amortization expense for the three months ended June 30, 2025 was $39,980 as compared to $84,779 for the three months ended June 30, 2024, with a decrease of 44,799, or approximately 53%, due to full amortization of the Company's intangible assets during the first quarter of 2025.
The following table sets forth information comparing the components of net loss for the six months ended June 30, 2025 and 2024:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | 2,579,156 | $ | 3,133,904 | ||||
| Research and development | 2,006,422 | 1,071,156 | ||||||
| Depreciation and amortization | 121,004 | 170,188 | ||||||
| Total operating expenses | 4,706,582 | 4,375,248 | ||||||
| Loss from operations | (4,706,582 | ) | (4,375,248 | ) | ||||
| Other (expense) income | ||||||||
| Other income | 2,565 | 40,009 | ||||||
| Interest (expense) income, net | (130 | ) | 661 | |||||
| Total other (expense) income | 2,435 | 40,670 | ||||||
| Net loss before income taxes | $ | (4,704,147 | ) | $ | (4,334,578 | ) | ||
| Income tax expense | - | (1,731 | ) | |||||
| Net loss | $ | (4,704,147 | ) | $ | (4,336,309 | ) | ||
General and Administrative Expenses
Our general and administrative expenses decreased to $2,579,156 for the six months ended June 30, 2025 from $3,133,904 for the six months ended June 30, 2024, a decrease of $554,748, or 18%. This change was primarily driven by decreases in director fees of $144,587, stock compensation expense of $112,317, accounting fees of $58,016, insurance expenses of $51,392, legal fees of $46,973, franchise tax of $39,904 software expense of $34,031, and public company fees of $25,822.
Research and Development Expenses
Our research and development expense for the six months ended June 30, 2025 was $2,006,422 as compared to $1,071,156 for the six months ended June 30, 2024 with an increase of $935,266, or approximately 87%. This increase was primarily driven by an increase in consulting fees of $1,136,455, and a prior year gain that was realized during the six months ended June 30, 2024 related to the Australian R&D tax incentive of $259,591, offset by a decrease in salaries and wages of $294,545 and CRO costs of $244,390.
Depreciation and Amortization Expense
Depreciation and amortization expense for the six months ended June 30, 2025 was $121,004 as compared to $170,188 for the six months ended June 30, 2024, for a decrease of $49,184, or approximately 29%, primarily related to full amortization of the Company's intangible assets in the first quarter of 2025.
Going Concern, Liquidity and Capital Resources
The Company has incurred losses since inception resulting in an accumulated deficit of $110,778,652 as of June 30, 2025 and further losses are anticipated in the development of its business. For the six months ended June 30, 2025, the Company had a loss from operations of $4,706,582. Further, the Company had operating cash outflows of $4,281,724 for the six months ended June 30, 2025. Since inception, being a research and development company, the Company has not yet generated revenue and the Company has incurred continuing losses from its operations. The Company's operations have been funded principally through the issuance of debt and equity. These factors raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed consolidated financial statements.
In assessing the Company's ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. At June 30, 2025, the Company had cash of $2,849,816 and working capital of $1,943,687. The Company's current cash on hand is insufficient to satisfy its operating cash needs for the 12 months following the filing of this Quarterly Report on Form 10-Q. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern for a period of one year after the date the financial statements are issued. Management's plan to alleviate the conditions that raise substantial doubt include raising additional working capital through public or private equity or debt financings or other sources, and may include additional collaborations with third parties as well as disciplined cash spending. Adequate additional financing may not be available to us on acceptable terms, or at all. Should the Company be unable to raise sufficient additional capital, the Company may be required to undertake cost-cutting measures including delaying or discontinuing certain operating activities.
As a result of these factors, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern for a period of one year after the date of the unaudited condensed consolidated financial statements. The Company's unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash Flows
Since inception, we have primarily used our available cash to fund our product development and operations expenditures.
Cash Flows for the Six Months Ended June 30, 2025 and 2024
The following table sets forth a summary of cash flows for the years presented:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (4,281,724 | ) | $ | (5,487,520 | ) | ||
| Net cash provided by financing activities | 4,898,010 | 6,692,699 | ||||||
| Effect of foreign exchange rate on changes on cash | (7,496 | ) | 9,395 | |||||
| Net increase in cash | $ | 608,790 | $ | 1,214,574 | ||||
Operating Activities
Net cash used in operating activities was $4,281,724 during the six months ended June 30, 2025, which consisted primarily of a net loss adjusted for non-cash items of $4,185,600, a decrease in prepaid expenses and other current assets of $48,192, a decrease in related party payable of $133,016 and a decrease in accounts payable and accrued liabilities of $11,300.
Net cash used in operating activities was $5,487,520 during the six months ended June 30, 2024, which consisted primarily of a net loss adjusted for non-cash items of $3,485,028, an increase in prepaid expenses and other current assets of $543,822, and a decrease in accounts payable and accrued liabilities of $1,458,670.
Financing Activities
Net cash provided by financing activities was $4,898,010 during the six months ended June 30, 2025, which consisted of $4,244,467 in net proceeds from the Offering, $75,044 in proceeds from the exercise of warrants, and $578,499 in net proceeds from the sale of Common Stock through the ATM Agreement.
Net cash provided by financing activities was $6,692,699 during the six months ended June 30, 2024, which consisted of $1,804,819 from the net proceeds received from the stock subscription receivable, $2,676,980 for the exercise of the inducement warrants, $2,290,186 for the Common Stock sold under a distribution agreement, net of offering costs, and $82,026 for the Common Stock sold under the Purchase Agreement, offset by $161,312 offering costs previously accrued for the inducement warrants.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, costs and expenses and related disclosures. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our most critical accounting estimate includes determining the accruals associated with third party providers supporting research and development efforts.
There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Enveric Biosciences Inc. published this content on August 14, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on August 14, 2025 at 20:25 UTC.
