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, 2022

☐ 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 11, 2022, there were 1,574,764 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, 2022 (Unaudited) and December 31, 2021	2
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2022 and 2021	3
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021	4-5
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	35
	Signatures	37

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash	$	18,008,951		$	17,355,999
Prepaid expenses and other current assets		1,360,326			380,838
Total current assets		19,369,277			17,736,837

Other assets:
Property and equipment, net		783,456			294,430
Right-of-use operating lease asset		120,967			176,304
Intangible assets, net		6,736,386			6,923,928
Goodwill		1,561,943			1,587,634
Total other assets		9,202,752			8,982,296
Total assets	$	28,572,029		$	26,719,133

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	754,296		$	683,393
Accrued liabilities		1,004,251			1,292,721
Current portion of right-of-use operating lease obligation		111,096			107,442
Derivative liability		455,000			—
Total current liabilities		2,324,643			2,083,556

Non-current liabilities:
Non-current portion of right-of-use operating lease obligation		9,871			68,861
Deferred tax liability		1,630,552			1,607,122
Warrant liability		2,003,203			653,674
Total non-current liabilities		3,643,626			2,329,657
Total liabilities	$	5,968,269		$	4,413,213

Commitments and contingencies (Note 7)		-			-

Mezzanine equity
Redeemable non-controlling interest		637,840			—
Series C redeemable preferred stock, $0.01 par value, 100,000 shares authorized, and 52,684.548 and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		527			—
Total mezzanine equity		638,367			—

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, 2022 and December 31, 2021		—			—
Common stock, $0.01 par value, 100,000,000 shares authorized, 1,054,043 and 651,921 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		10,540			6,519
Additional paid-in capital		90,228,932			83,066,656
Accumulated deficit		(68,050,972	)		(60,736,453	)
Accumulated other comprehensive loss		(223,107	)		(30,802	)
Total shareholders’ equity		21,965,393			22,305,920
Total liabilities, mezzanine equity, and shareholders’ equity	$	28,572,029		$	26,719,133

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

ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

INCOME (LOSS)

	2022			2021			2022			2021
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2022			2021			2022			2021
Operating expenses
General and administrative		2,501,206		$	2,309,149			5,269,072		$	8,740,862
Research and development		2,120,051			879,843			4,078,765			1,076,487
Depreciation and amortization		85,502			174,019			154,767			310,659
Total operating expenses		4,706,759			3,363,011			9,502,604			10,128,008

Loss from operations		(4,706,759	)		(3,363,011	)		(9,502,604	)		(10,128,008	)

Other income (expense)
Inducement expense		—			—			—			(298,714	)
Change in fair value of warrant liabilities		1,969,922			2,459,543			2,245,891			6,272,543
Change in fair value of derivative liability		(53,000	)		—			(53,000	)		—
Interest expense		(668	)		(4,821	)		(4,806	)		(4,821	)
Total other income		1,916,254			2,454,722			2,188,085			5,969,008

Net loss	$	(2,790,505	)	$	(908,289	)	$	(7,314,519	)	$	(4,159,000	)
Less preferred dividends attributable to non-controlling interest		7,808			—			7,808			—
Less deemed dividends attributable to accretion of embedded derivative at redemption value		73,994			—			73,994			—
Net loss attributable to shareholders		(2,872,307	)		(908,289	)		(7,396,321	)		(4,159,000	)

Other comprehensive gain (loss)
Foreign currency translation		(281,014	)		(33,262	)		(192,305	)		2,474

Comprehensive loss	$	(3,153,321	)	$	(941,551	)	$	(7,588,626	)	$	(4,156,526	)

Net loss per share - basic and diluted	$	(2.73	)	$	(2.13	)	$	(7.78	)	$	(10.62	)

Weighted average shares outstanding, basic and diluted		1,053,760			426,883			951,193			391,516

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 (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

						Shares			Amount			Shares		Amount		Capital		Deficit			Income (Loss)			Total
						Series B Preferred Stock						Common Stock				Additional Paid-In		Accumulated			Accumulated Other Comprehensive
						Shares			Amount			Shares		Amount		Capital		Deficit			Income (Loss)			Total
Balance at January 1, 2021	-	-	-	-	-		3,275,407		$	32,754			202,249	$	2,022	$	15,321,699	$	(11,759,557	)	$	(181,277	)	$	3,415,641
January 2021 registered direct offering							—			—			44,427		444		4,616,643		—			—			4,617,087
February 2021 registered direct offering							—			—			60,141		601		7,015,800		—			—			7,016,401
Stock-based compensation							—			—			—		—		3,591,565		—			—			3,591,565
Induced conversion of stock options into restricted stock awards							—			—			—		—		298,714		—			—			298,714
Conversion of Series B Preferred Stock							(3,275,407	)		(32,754	)		65,509		655		32,099		—			—			—
Exercise of warrants							—			—			17,022		170		3,267,075		—			—			3,267,245
Foreign currency translation gain							—			—			—		—		—		—			35,736			35,736
Net loss		-		-	-		—			—			—		—		—		(3,250,711	)		—			(3,250,711	)
Balance at March 31, 2021	-	-	-	-	-		—		$	—			389,348	$	3,892	$	34,143,595	$	(15,010,268	)	$	(145,541	)	$	18,991,678
Stock-based compensation							—			—			283		3		750,930		—			—			750,933
Conversion of stock options into restricted stock

SEC Form 10-Q filed by Enveric Biosciences Inc.