Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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. Specific forward-looking statements in this quarterly report include statements, among others, regarding:

	●	our belief that EB-003 is the first known compound to selectively engage both 5-HT2A and 5-HT1B receptors with the potential to deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience;
	●	our intention to broaden our pipeline with additional non-hallucinogenic molecules with the unveiling of the EVM401 Series;
	●	our belief that the EVM401 Series will strengthen our ability to target addiction and neuropsychiatric disorders for patients with limited options;
	●	our intention to pursue the EVM401 Series, but primarily focus on developing our lead asset EB-003 in the EVM301 Series;
	●	our belief that factors exist that raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these unaudited condensed consolidated financial statements;
	●	management's plan to alleviate the conditions that raise substantial doubt include raising additional working capital through public or private equity or debt financings or other sources, and may include additional collaborations with third parties as well as disciplined cash spending;
	●	our belief that adequate additional financing may not be available to the Company on acceptable terms, or at all;
	●	our belief that should the Company be unable to raise sufficient additional capital, the Company may be required to undertake further cost-cutting measures including delaying or discontinuing certain operating activities;
	●	our exposure from changes in the exchange rates of the Canadian dollar and Australian dollar against the United States dollar;
	●	our belief that the outcome of such legal proceedings that the Company may periodically be engaged in the normal course of business will not have a significant adverse effect on the Company's financial position, results of operations or cash flows;
	●	our ability to continue as a going concern;
	●	our belief that our lead program, the EVM301 Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations in the patient;
	●	the advancement of EB-003 through preclinical studies and aim of initiating the first-in-human studies to asses safety and tolerability including non-hallucinogenic properties, followed by clinical trial targeting the treatment of depression or other neuropsychiatric disorders;
	●	our intention to assemble a team of clinical experts and principal investigators with experience across multiple mental health and central nervous system indications to be responsible for the management, monitoring, and integrity of the clinical research;
	●	our plan to submit filings including Investigational New Drug ("IND") applications and, eventually, new drug applications (NDAs) to seek approval with the U.S. Food and Drug Administration (FDA) and with responsible regulatory agencies in other jurisdictions, in connection with our product candidates;
	●	our intention to broaden the pipeline with non-hallucinogenic molecules and strengthen our ability to target addiction and neuropsychiatric disorders for patients with limited options through the unveiling of our EVM401 Series;
	●	our belief that our continued development of the Psybrary™ will help us identify and develop the right drug candidates needed to address mental health challenges, including depression, anxiety, and addiction disorders; and
	●	our success at managing the risks involved in the foregoing.

Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including, but not limited to, our ability to: finalize and submit its IND filing to the U.S. Food and Drug Administration; carry out successful clinical programs; achieve the value creation contemplated by technical developments; avoid delays in planned clinical trials; establish that potential products are efficacious or safe in preclinical or clinical trials; establish or maintain collaborations for the development of therapeutic candidates; obtain appropriate or necessary governmental approvals to market potential products; obtain future funding for product development and working capital on commercially reasonable terms; scale-up manufacture of product candidates; respond to changes in the size and nature of competitors; hire and retain key executives and scientists; secure and enforce legal rights related to Enveric's products, including patent protection; identify and pursue alternative routes to capture value from its research and development pipeline assets; continue as a going concern; and manage its future growth effectively.

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, 2025. 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 focused on developing next-generation, small-molecule neuroplastogenic therapeutics that address unmet needs in psychiatric and neurological disorders. By leveraging a differentiated drug discovery platform and a growing library of patent protected chemical structures, we are advancing a pipeline of novel compounds designed to promote neuroplasticity without hallucinogenic effects. Our lead candidate, EB-003, is the first known compound designed to selectively engage both 5-HT_2A and 5-HT_1B receptors with the potential to deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience.

Our lead program, the EVM301 Series, and our lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations in the patient. EB-003 is a novel derivative of DMT. It is currently advancing through preclinical studies with the aim of initiating first-in-human studies to assess safety and tolerability including non-hallucinogenic properties, followed by clinical trials targeting the treatment of depression or other neuropsychiatric disorders.

We intend to assemble a team of clinical experts and principal investigators with experience across multiple mental health and central nervous system indications to be responsible for the management, monitoring, and integrity of the clinical research. We plan to submit filings including IND applications and, eventually, NDAs to seek approval with the FDA and with responsible regulatory agencies in other jurisdictions, in connection with our product candidates. The selection, timing, duration, and design of any prospective studies are subject to regulatory filings, approval and finalization of commercial plans. Our EB-003 program has completed short-term dose-range finding toxicology studies and has advanced into IND-enabling, GLP compliant safety pharmacology, ADMET and longer-term toxicology studies.

We unveiled the EVM401 Series on February 25, 2025, which is intended to broaden its pipeline with additional non-hallucinogenic molecules and strengthen our ability to target addiction and neuropsychiatric disorders for patients with limited options. While we intend to pursue development of the EVM401 Series, our primary focus is to develop our lead asset EB-003 in the EVM301 Series.

Neuroplastogens

Following our amalgamation with MagicMed in September 2021, 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 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.

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. During 2026, a post-grant review petition challenging one of our issued patents was withdrawn. We believe this development further supports the strength of our intellectual property portfolio and our strategy of developing and protecting novel neuroplastogenic compounds.

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. During the second quarter of 2026, we continued to advance IND-enabling activities for EB-003. In May 2026, we reported positive results from preclinical phototoxicity analyses indicating no photoreactive potential for EB-003. In June 2026, we initiated GLP-compliant genotoxicity studies designed to evaluate the compound's potential to interact with DNA and cause genetic mutations, which are among the studies required to support a future IND submission. We believe these activities represent important steps in advancing EB-003 toward planned first-in-human clinical studies.

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

ATM Agreement

On June 9, 2026, the Company filed a prospectus supplement to increase the registered capacity of its ATM facility by an additional $2,425,000. By way of background, the Company previously entered into an at the market offering agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC, acting as sales agent (the "Sales Agent"), on April 9, 2025, relating to shares of Common Stock. Under the ATM Agreement, we may offer and sell shares of Common Stock from time to time through the Sales Agent. The Sales Agent receives 3% of the gross sales price of the shares sold as a placement fee.

During the six months ended June 30, 2026, the Company issued 497,200 shares for net cash proceeds of $1,291,038.

As of June 30, 2026, the Company has issued an aggregate of 607,442 shares under the ATM Agreement, reflecting issuances during both the prior year and the current year, for net cash proceeds of $2,927,837, and $2,425,000 remains available to sell.

April 2026 Private Placement

On April 16, 2026, the Company entered into a securities purchase agreement (the "April 2026 Purchase Agreement") with certain institutional investors, pursuant to which the Company agreed to issue and sell to the investors in a private placement (the "April Private Placement") (i) 98,000 shares of the Company's common stock, (ii) pre-funded warrants (the "Pre-Funded Warrants") to purchase up to an aggregate of 2,124,223 shares of Common Stock (the "Pre-Funded Warrant Shares"), (iii) Series I warrants to purchase up to 2,222,223 shares of Common Stock (the "Series I Warrants"), and (iv) Series J warrants to purchase up to 2,222,223 shares of Common Stock (the "Series J Warrants," together with the Series I Warrants, the "April Common Warrants"). In connection with the April Private Placement, the Company entered into a Registration Rights Agreement pursuant to which it agreed to file a registration statement covering the resale of the shares and shares issuable upon exercise of the warrants issued in the April Private Placement (the "Resale Registration Statement"). The Pre-Funded Warrants are immediately exercisable and may be exercised at a nominal exercise price of $0.0001 per share of Common Stock at any time until all of the Pre-Funded Warrants are exercised in full. The April Common Warrants have an exercise price of $2.00 per share and are exercisable immediately. The Series I Warrants expire five years following the effective date of the Resale Registration Statement, and the Series J Warrants expire 18 months following the effective date of the Resale Registration Statement. The aggregate gross proceeds from the April Private Placement were approximately $5.0 million before deducting Placement Agent fees and offering expenses. The closing of the private placement occurred on April 17, 2026.

The Placement Agent acted as the exclusive placement agent in connection with the April Private Placement. The Company agreed to pay the Placement Agent a cash fee equal to 7.0% of the aggregate gross proceeds of the April Private Placement and a management fee equal to 1.0% of the aggregate gross proceeds of the April Private Placement. The Company also issued warrants to purchase up to 155,556 shares of Common Stock to the Placement Agent. The Placement Agent warrants have substantially the same terms as the Series I Warrants, except the placement agent warrants have an exercise price of $2.8125 per share (125% of the offering price).

Results of Operations

The following table sets forth information comparing the components of net loss for the three months ended June 30, 2026 and 2025:

		For the Three Months Ended June 30,
		2026				2025
Operating expenses
General and administrative		$	1,635,478			$	1,219,018
Research and development			1,355,137				1,260,051
Depreciation and amortization			36,826				39,980
Total operating expenses			3,027,441				2,519,049
Loss from operations			(3,027,441	)			(2,519,049	)
Other expense
Interest expense, net			(292	)			(132	)
Total other expense			(292	)			(132	)
Net loss before income taxes			(3,027,733	)			(2,519,181	)
Income tax expense			-				-
Net loss		$	(3,027,733	)		$	(2,519,181	)

General and Administrative Expenses

Our general and administrative expenses increased to $1,635,478 for the three months ended June 30, 2026 from $1,219,018 for the three months ended June 30, 2025, an increase of $416,460, or 34%. This change was primarily driven by increases in salaries and wages of $430,894 and Delaware franchise tax fees of $50,000, offset by decreases in legal fees of $20,126 and investor relations of $52,798.

Research and Development Expenses

Our research and development expenses for the three months ended June 30, 2026 were $1,355,137 as compared to $1,260,051 for the three months ended June 30, 2025, for an increase of $95,086, or approximately 8%. This change was primarily driven by increases in salaries and wages of $108,820, and research costs of $52,307, offset by decreases in consulting fees of $65,365.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended June 30, 2026 was $36,826 as compared to $39,980 for the three months ended June 30, 2025, with a decrease of $3,154, or approximately 8%, due to full depreciation of certain fixed assets during 2026.

The following table sets forth information comparing the components of net loss for the six months ended June 30, 2026 and 2025:

		For the Six Months Ended June 30,
		2026				2025
Operating expenses
General and administrative		$	2,885,439			$	2,579,156
Research and development			1,701,106				2,006,422
Depreciation and amortization			74,066				121,004
Total operating expenses			4,660,611				4,706,582
Loss from operations			(4,660,611	)			(4,706,582	)
Other (expense) income
Other income			-				2,565
Interest (expense) income, net			(595	)			(130	)
Total other (expense) income			(595	)			2,435
Net loss before income taxes			(4,661,206	)			(4,704,147	)
Income tax expense			-				-
Net loss		$	(4,661,206	)		$	(4,704,147	)

General and Administrative Expenses

Our general and administrative expenses increased to $2,885,439 for the six months ended June 30, 2026 from $2,579,156 for the six months ended June 30, 2025, an increase of $306,283, or 12%. This change was primarily driven by increases in salaries and wages of $418,996, offset by decreases in consulting fees of $32,051, investor relations of $74,149, and public company fees of $31,703.

Research and Development Expenses

Our research and development expense for the six months ended June 30, 2026 was $1,701,106 as compared to $2,006,422 for the six months ended June 30, 2025, a decrease of $305,316, or approximately 15%. This decrease was primarily driven by a decrease in consulting fees of $253,248 and, research costs of $38,335, offset by an increase in salaries and wages of $4,006.

Depreciation and Amortization Expense

Depreciation and amortization expense for the six months ended June 30, 2026 was $74,066 as compared to $121,004 for the six months ended June 30, 2025, for a decrease of $46,938, or approximately 39%, primarily related to full amortization of our 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 $119,507,698 as of June 30, 2026 and further losses are anticipated in the development of its business. For the six months ended June 30, 2026, the Company had a loss from operations of $4,660,611. Further, the Company had operating cash outflows of $4,701,378 for the six months ended June 30, 2026. 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, 2026, the Company had cash of $8,296,296 and working capital of $7,931,850. Cash increased to $8,296,296 at June 30, 2026 from $4,908,769 at March 31, 2026, an increase of $3,387,527, or 69%, primarily as a result of proceeds received from the April 2026 private placement and warrant exercises, partially offset by cash used in operating activities. Management expects existing cash resources to fund operations only for a limited period and anticipates the need for additional capital to continue development activities and satisfy ongoing obligations. As a result, 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, 2026 and 2025

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

		For the Six Months Ended June 30,
		2026				2025
Net cash used in operating activities		$	(4,701,378	)		$	(4,281,724	)
Net cash provided by financing activities			8,348,207				4,898,010
Effect of foreign exchange rate on changes on cash			(28,024	)			(7,496	)
Net increase in cash		$	3,618,805			$	608,790

Operating Activities

Net cash used in operating activities was $4,701,378 during the six months ended June 30, 2026, which consisted primarily of a net loss adjusted for non-cash items of $4,353,756, an increase in prepaid expenses and other current assets of $276,132, a decrease in related party payable of $73,125 and an increase in accounts payable and accrued liabilities of $1,635.

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 due to related parties of $133,016, and a decrease in accounts payable and accrued liabilities of $11,300.

Financing Activities

Net cash provided by financing activities was $8,348,207 during the six months ended June 30, 2026, which consisted of $5,552,765 in net proceeds from the sale of Common Stock and warrants, $1,523,242 of proceeds from warrant exercises, and $1,291,038 in net proceeds from the sale of Common Stock pursuant to the ATM Agreement, offset slightly by $18,838 in payments of deferred offering costs.

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 sale of Common Stock, net of offering costs, $75,044 in proceeds from the exercise of warrants, and $578,499 in proceeds from Common Stock sold under the ATM Agreement, net of 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.

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, 2025.