
PART I Business Enveric Biosciences develops mental health and oncology treatments using psychedelic-derived molecules and synthetic cannabinoids, leveraging its Psybrary™ and PsyAI™ tools - The company's core business is developing next-generation mental health and oncology treatments using psychedelic-derived molecules and synthetic cannabinoids, with an initial focus on palliative care for cancer patients20 - On September 16, 2021, Enveric completed an amalgamation with MagicMed Industries, acquiring its proprietary psychedelic derivatives library, the Psybrary™, and its AI discovery tool, PsyAI™2229 Product Candidate Pipeline | Product Candidate | Targeted Indications | Status | Expected Next Steps | | :--- | :--- | :--- | :--- | | EV104 | Osteoarthritis | Research & Development, Lead Optimization | Synthesis of molecular conjugates | | EVM-101 | Cancer Related Distress (CRD) | Research & Development / Discovery | Exploratory Phase 1/2 trial | | EVM-201 | Cancer Related Distress (CRD) | Research & Development, Lead Optimization | In-vitro and in-vivo experimentation | | EVM-301 | Mental health indication | Research & Development, Hit-to-Lead Generation | In-vitro experimentation | | EV102 | Radiation Dermatitis | Research & Development / IND-enabling studies | IND submission; Phase 1/2 clinical trial | | EV101 | Glioblastoma Multiforme | Research & Development / Discovery | Exploratory Phase 1/2 trial | - The company's intellectual property portfolio includes 16 owned patent applications related to psychedelics (psilocybin, psilocin, mescaline derivatives) and several owned and in-licensed patents for cannabinoid-based therapies404752 - Enveric collaborates with academic and industry partners, including Tikun Olam Ltd., St. George's University of London, and The University of Calgary, to accelerate product development and clinical trials7273 Risk Factors The company faces significant risks including product development uncertainty, substantial funding needs, stringent regulatory hurdles for controlled substances, intense competition, and potential Nasdaq delisting - The company's success is highly dependent on its early-stage product candidates, which may never receive regulatory approval or be successfully commercialized149150 - Enveric has significant and increasing liquidity needs and will require additional capital to fund operations, clinical trials, and potential commercialization, with no assurance that such funding will be available163164165 - The psychedelic-derived therapeutic candidates are subject to strict controlled substance laws in the U.S. and other countries, with psychedelics like psilocybin classified as Schedule I substances, presenting significant hurdles for clinical trials and commercial marketing249250 - The company has never been profitable, has no products approved for sale, and has an accumulated deficit of $60.7 million as of the report date214 - The company faces intense competition from major pharmaceutical and biotech companies with greater financial and development resources172 - On February 18, 2022, the company received a notice from Nasdaq for failing to meet the minimum $1.00 bid price requirement, posing a risk of delisting if compliance is not regained365 - A material weakness in internal control over financial reporting was identified, related to inadequate segregation of duties, which could impact the accuracy of financial reporting322324 Unresolved Staff Comments The company reports no unresolved staff comments - The company reports no unresolved staff comments371 Properties The company's principal corporate office in Naples, Florida, is held under a month-to-month operating lease - The principal corporate office is in Naples, Florida, under a month-to-month operating lease372 Legal Proceedings The company reports no pending litigation expected to materially affect its financial condition or operations - There is no pending litigation expected to have a material adverse effect on the company's results of operations, financial condition, or cash flows373 Mine Safety Disclosures The company reports that mine safety disclosures are not applicable - The company reports that mine safety disclosures are not applicable374 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer's Purchases of Equity Securities The company's common stock trades on Nasdaq under 'ENVB', with approximately 170 stockholders, and no cash dividends have been paid or are planned - The company's common stock is listed on the Nasdaq Capital Markets under the symbol "ENVB"377 - As of March 29, 2022, the company had approximately 170 stockholders of record378 - The company has never paid cash dividends and does not plan to in the foreseeable future379 Management's Discussion and Analysis of Financial Condition and Results of Operations Operating expenses surged to $64.6 million in 2021, driven by a $38.7 million impairment charge, widening the net loss to $49.0 million, with future liquidity dependent on recent $9.2 million financing and ongoing Nasdaq delisting risk Results of Operations Comparison (2021 vs. 2020) | Metric | Year Ended 2021 | Year Ended 2020 | | :--- | :--- | :--- | | Total operating expenses | $64,623,420 | $5,617,317 | | Impairment of intangible assets and goodwill | $38,678,918 | $0 | | Loss from operations | ($64,623,420) | ($5,617,317) | | Net loss | ($48,976,896) | ($6,864,676) | | Net loss per share | ($2.07) | ($1.19) | - Operating expenses increased by $59.0 million (1,050%) in 2021, primarily due to a $38.7 million impairment charge, a $4.6 million increase in R&D costs, and a $9.8 million increase in stock-based compensation416 - A sustained decline in the company's stock price in Q4 2021 triggered an impairment analysis, resulting in a $30.5 million impairment of intangible assets and an $8.2 million impairment of goodwill403 - The company raised approximately $9.2 million in net proceeds from a public offering in February 2022, which is expected to fund operations for at least the next twelve months391393424 - On February 18, 2022, the company received a notice from Nasdaq for failing to meet the $1.00 minimum bid price requirement, initiating a 180-day compliance period to regain compliance394427 Summary of Cash Flows (2021 vs. 2020) | Cash Flow Activity | Year Ended 2021 | Year Ended 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($11,457,671) | ($3,888,785) | | Net cash provided by (used in) investing activities | $2,190,609 | ($44,143) | | Net cash provided by financing activities | $24,899,659 | $5,531,270 | | Net increase in cash | $15,777,539 | $1,534,746 | Quantitative and Qualitative Disclosure About Market Risk The company reports this item is not applicable - The company reports that this item is not applicable495 Financial Statements and Supplementary Data Consolidated financial statements and supplementary data are included at the end of the Annual Report on Form 10-K, starting on page F-1 - The required financial statements and supplementary data are included at the end of the report, starting on page F-1496 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reported no changes in or disagreements with its accountants on accounting and financial disclosure - The company reports no disagreements with accountants on accounting and financial disclosure498 Controls and Procedures Management concluded disclosure controls were ineffective as of December 31, 2021, due to a material weakness in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2021499 - A material weakness was identified due to insufficient segregation of duties in finance and accounting functions, lack of formalized control documentation, and ineffective control activities over the control environment504 - Remediation efforts are underway, including engaging third-party experts for design and testing, implementing new software for improved controls, and using external experts for supervision and financial reporting assistance507 Other Information The company reported no other information in this section - The company reports no other information508 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections The company reported no disclosures regarding foreign jurisdictions that prevent inspections - The company reports no disclosures are required under this item509 PART III Directors, Executive Officers and Corporate Governance This section details the company's executive leadership and seven-member Board of Directors, including committee structures and noted late Section 16(a) filings Executive Officers and Directors | Name | Position(s) | | :--- | :--- | | David Johnson | Executive Chairman | | Joseph Tucker, PhD | Chief Executive Officer and Director | | Avani Kanubaddi | President and Chief Operating Officer | | Dr. Bob Dagher | Chief Medical Officer | | Peter Facchini, PhD | Chief Innovation Officer | | Carter Ward | Chief Financial Officer | | George Kegler | Director and Chair of the Audit Committee | | Dr. Douglas Lind | Director | | Sol Mayer | Director and Chair of the Nominating and Corporate Governance Committee | | Dr. Marcus Schabacker | Director and Chair of the Compensation Committee | | Brad Thompson, PhD | Director | - The Board of Directors consists of seven members, with George Kegler, Sol Mayer, Dr. Marcus Schabacker, and Dr. Douglas Lind determined to be independent directors according to Nasdaq Listing Rules539541 - The company has adopted a Code of Corporate Conduct and Ethics and Whistleblower Policy, which is available on its website537 - Several late Form 3 and Form 4 filings were reported for directors and officers in Fiscal 2021, mostly related to initial ownership reports for new appointees531532533 Executive Compensation Executive compensation for 2021 was heavily weighted towards stock awards, with total compensation for key executives including $6.9 million for David Johnson and $2.5 million for Joseph Tucker 2021 Summary Compensation Table | Name and Principal Position | Year | Salary | Bonus | Stock Awards | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | David Johnson, Executive Chairman | 2021 | $250,000 | $168,750 | $6,469,066 | $6,887,816 | | Joseph Tucker, Chief Executive Officer | 2021 | $92,083 | $159,063 | $2,226,992 | $2,478,138 | | Avani Kanubaddi, President and COO | 2021 | $302,500 | $144,570 | $3,789,523 | $4,236,593 | - Employment agreements for key executives provide for severance payments, typically equal to 12 months of base salary, upon termination by the company without cause or by the executive for good reason601 - Non-employee directors are compensated with cash fees and equity awards; for example, in 2021, George Kegler received $38,500 in cash and $76,594 in equity awards604 - Equity awards are granted under the Enveric Biosciences, Inc. 2020 Long-Term Incentive Plan, which authorizes various types of awards including stock options, RSUs, and RSAs606 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 29, 2022, directors and executive officers collectively beneficially owned 9.3% of the company's 52,585,120 outstanding common shares Beneficial Ownership of Directors and Officers (as of March 29, 2022) | Name | Shares Beneficially Owned | Percentage of Shares Outstanding | | :--- | :--- | :--- | | Joseph Tucker, PhD | 1,568,220 | 2.8% | | Avani Kanubaddi | 789,484 | 1.4% | | Peter Facchini, PhD | 1,330,329 | 2.3% | | David Johnson | 1,347,722 | 2.4% | | All directors and officers as a group (9 persons) | 5,152,322 | 9.3% | - As of March 29, 2022, there were 52,585,120 shares of common stock outstanding632 Certain Relationships and Related Transactions and Director Independence This section details significant related-party transactions, including the MagicMed Industries amalgamation and complex financing and IP agreements involving Jay Pharma with Alpha Capital Anstalt and Tikkun Pharma - The amalgamation with MagicMed Industries involved acquiring a company where key incoming executives, Dr. Joseph Tucker and Dr. Peter Facchini, were existing shareholders642643 - Prior to its acquisition by Enveric, Jay Pharma engaged in significant financing transactions with Alpha Capital Anstalt, including a $2 million bridge loan and a $3 million private placement, which converted into Enveric securities651661 - Jay Pharma acquired intellectual property rights from Tikkun Pharma in exchange for over 10 million Jay Pharma shares, of which 7.77 million were subsequently sold by Tikkun to Alpha for a nominal price of $10.00676677 Principal Accountant Fees and Services The company changed independent accountants multiple times, with total professional service fees increasing to $235,110 in 2021 from $31,000 in 2020, all pre-approved by the Audit Committee - The company changed its independent accountant twice during the period, ultimately appointing Friedman LLP in June 2021690 Accountant Fees (2021 vs. 2020) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit fees | $170,025 | $15,000 | | Tax fees | $10,000 | $16,000 | | Audit-related fees | $5,150 | $0 | | All other fees | $49,935 | $0 | | Total | $235,110 | $31,000 | - All services provided by the independent auditor were pre-approved by the company's audit committee693 PART IV Exhibits and Financial Statement Schedules This section lists all documents filed as part of the Annual Report on Form 10-K, including consolidated financial statements and a detailed index of exhibits - This section provides a list of all financial statements and schedules filed with the report697 - An index to all exhibits is included, referencing key corporate documents, agreements, and certifications698700 Form 10–K Summary The company reports this item is not applicable - The company reports that this item is not applicable699