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: June 30, 2023

☐ 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 (Section 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. ☐

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 August 9, 2023, there were 2,147,906 shares outstanding of Registrant’s Common Stock (par value $0.01 per share).

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 and 2022	2
	Unaudited Condensed Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity for the three and six months ended June 30, 2023 and 2022	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	29
	Signatures	30

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2023			December 31,2022
	(unaudited)
ASSETS
Current assets:
Cash	$	7,081,408		$	17,723,884
Prepaid expenses and other current assets		1,818,611			708,053
Total current assets		8,900,019			18,431,937

Other assets:
Property and equipment, net		595,233			677,485
Right-of-use operating lease asset		9,607			63,817
Intangible assets, net		295,311			379,686
Total other assets		900,151			1,120,988
Total assets	$	9,800,170		$	19,552,925

LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,234,490		$	463,275
Accrued liabilities		1,499,476			1,705,655
Current portion of right-of-use operating lease obligation		9,611			63,820
Investment option liability		1,813,644			851,008
Warrant liability		368,379			185,215
Derivative liability		—			727,000
Total current liabilities	$	4,925,600		$	3,995,973

Commitments and contingencies (Note 9)		-			-

Mezzanine equity
Series C redeemable preferred stock, $0.01 par value, 100,000 shares authorized, and 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022		—			—
Redeemable non-controlling interest		—			885,028
Total mezzanine equity		—			885,028

Shareholders’ equity
Preferred stock, $0.01 par value, 20,000,000 shares authorized; Series B preferred stock, $0.01 par value, 3,600,000 shares authorized, 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022		—			—
Common stock, $0.01 par value, 100,000,000 shares authorized, 2,141,782 and 2,078,271 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		21,417			20,782
Additional paid-in capital		95,640,571			94,395,662
Accumulated deficit		(90,241,366	)		(79,207,786	)
Accumulated other comprehensive loss		(546,052	)		(536,734	)
Total shareholders’ equity		4,874,570			14,671,924
Total liabilities, mezzanine equity, and shareholders’ equity	$	9,800,170		$	19,552,925

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

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	2023			2022			2023			2022
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Operating expenses
General and administrative	$	3,155,400		$	2,501,206		$	5,910,991		$	5,269,072
Research and development		2,513,089			2,120,051			4,531,690			4,078,765
Depreciation and amortization		86,518			85,502			173,004			154,767
Total operating expenses		5,755,007			4,706,759			10,615,685			9,502,604

Loss from operations		(5,755,007	)		(4,706,759	)		(10,615,685	)		(9,502,604	)

Other income (expense)
Change in fair value of warrant liabilities		(233,821	)		1,969,922			(183,164	)		2,245,891
Change in fair value of investment option liability		(1,082,141	)		—			(962,636	)		—
Change in fair value of derivative liability		714,000			(53,000	)		727,000			(53,000	)
Interest income (expense)		916			(668	)		905			(4,806	)
Total other (expense) income		(601,046	)		1,916,254			(417,895	)		2,188,085

Net loss		(6,356,053	)		(2,790,505	)		(11,033,580	)		(7,314,519	)
Less preferred dividends attributable to non-controlling interest		6,712			7,808			19,041			7,808
Less deemed dividends attributable to accretion of embedded derivative at redemption value		36,997			73,994			147,988			73,994
Net loss attributable to shareholders		(6,399,762	)		(2,872,307	)		(11,200,609	)		(7,396,321	)

Other comprehensive loss
Foreign currency translation		(11,286	)		(281,014	)		(9,318	)		(192,305	)

Comprehensive loss	$	(6,411,048	)	$	(3,153,321	)	$	(11,209,927	)	$	(7,588,626	)

Net loss per share - basic and diluted	$	(3.04	)	$	(2.73	)	$	(5.35	)	$	(7.78	)

Weighted average shares outstanding, basic and diluted		2,107,583			1,053,760			2,093,008			951,193

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

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

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

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

	-	Shares		Amount		Equity		Shares		Amount		Capital			Deficit			Loss			Equity
		Redeemable Non-controlling Interest				Total Mezzanine		Common Stock				Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Total Shareholders’
		Shares		Amount		Equity		Shares		Amount		Capital			Deficit			Loss			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

SEC Form 10-Q filed by Enveric Biosciences Inc.