ENVB

Risk factors A summary of the principal risk factors that make investing in our securities risky and might cause our actual results to differ materially from those projected.
This summary should be read in conjunction with the complete discussion of risk factors set forth in “Item 1A.
Risk Factors.” If any of the following factors occur, our business, financial condition, results of operations, cash flows, cash available for distribution, ability to service our debt obligations and prospects could be materially and adversely affected: Business and Financial Condition ● our ability to continue as a going concern; ● our dependence on the success of our prospective product candidates, which are in 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; ● catastrophic events could have a material adverse effect on our business, including current plans for product development, as well as any currently ongoing preclinical studies and clinical trials and any future studies or other development or commercialization activities; ● in the event Artificial Intelligence (“AI”) is used to better effect by our competitors it could lead to countervailing discoveries that may undermine our current pipeline.
The use of AI could also lead to potential security risks and breaches; ● our significant and increasing liquidity needs and potential requirements for additional funding; ● our dependence on key personnel; ● the limited study on the effects of psychedelic-inspired drug candidates, 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 drug candidates; ● the risk that our limited resources has led us to focus on a particular product candidate, and, as a result, we may fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of medical and commercial success; ● our expectation to face intense competition, often from companies with greater resources and experience than us; ● the fact that our current and future preclinical and clinical studies may be conducted outside the United States, and the FDA may not accept data from such studies to support any new drug applications we may submit after completing the applicable developmental and regulatory prerequisites; ● the expensive, time-consuming, and uncertain nature of clinical trials, which are susceptible to change, delays, termination, and differing interpretations; ● our ability to establish that potential products are efficacious or safe in preclinical or clinical trials; ● 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; ● the risk that the psychedelic-inspired medicines industry and market are relatively new, and the industry may not succeed in the long term; ● we have never been profitable, have no products approved for commercial sale, and to date have not generated any revenue.
Regulatory Matters ● the fact that our current and prospective product candidates, and the development thereof, are or will be subject to the various federal and state laws and regulations relating to the safety and efficacy of health products, such as prescription drugs; ● the fact that psychedelic-inspired drug candidates we are developing or may develop in the future may be subject to controlled substance laws and regulations in the United States and other countries where the product will be marketed, and failure to comply with these laws and regulations, or the cost of compliance with these laws and regulations, may adversely affect the results of our business operations and our financial condition; ● 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 fact that our prospective products will be subject to the various federal and state laws and regulations relating to health and safety; ● the fact that any failure by us to comply with existing regulations could harm our reputation and operating results; ● the risk that we may voluntarily suspend or terminate our clinical trials if at any time we believe that the product candidates present an unacceptable risk to participants, or if preliminary data demonstrates that our future product candidates are unlikely to receive regulatory approval or unlikely to be successfully commercialized; Intellectual Property ● our ability to secure and enforce legal rights related to our products, including intellectual property rights and patent protection; ● the fact that infringement claims by third parties may result in liability for damages or prevent or delay our developmental and commercialization efforts; ● we may be unsuccessful in licensing additional intellectual property to develop new product candidates; ● if we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished; ● we may not be able to protect our intellectual property rights effectively outside of the United States; Common Stock ● the fact that our common stock could be delisted from The Nasdaq Capital Market; ● the market price of our common stock may be subject to significant fluctuations and volatility, and our stockholders may be unable to resell their shares at a profit and incur losses; ● we may issue additional equity securities in the future, which may result in dilution to existing investors; and ● certain stockholders could attempt to influence changes within the Company which could adversely affect our operations, financial condition and the value of our common stock.
Risks Related to Our Business and Financial Condition Our management and independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern as of December 31, 2025.
Our independent registered public accounting firm issued a report dated March 27, 2026 in connection with the audit of our consolidated financial statements as of December 31, 2025, which included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern including our recurring losses, cash used in operations, and need to raise additional funds to meet our obligations and sustain our operations.
In addition, the notes to our financial statements for the year ended December 31, 2025, included in this Annual Report, contain a disclosure describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern.
We intend to advance early research programs through preclinical development and to file IND applications for human clinical trials evaluating the prospective product candidates in our pipeline.
The preparation and submission of IND applications requires rigorous and time-consuming preclinical testing, the results of which must be sufficiently documented to establish, among other things, the toxicity, safety, chemistry manufacturing and controls (“CMC”) and clinical protocols of the product candidates.
In the event Artificial Intelligence (“AI”) is used to better effect by our competitors it could lead to countervailing discoveries that may undermine our current pipeline.
The use of AI could also lead to potential security risks and breaches.
AI technologies are evolving rapidly, and our management has limited ability to fully assess or predict the potential long-term risks and disruptions they may bring.
As AI technologies continue to develop, we may face significant challenges in adapting to new market conditions or operational realities.
Competitors may leverage AI to gain competitive advantages or disrupt established business models.
Moreover, AI systems have the potential to make unforeseen or unintended discoveries that may disrupt existing products, services, or business strategies.
These countervailing discoveries could render our current operations or offerings obsolete, or cause unforeseen consequences that are difficult to mitigate.
As AI-driven developments evolve, the risk of encountering these unintended outcomes increases, and our ability to anticipate or control them may be limited.
Additionally, the rapid deployment of AI by competitors could create significant competitive risks.
Competitors may be able to develop or adopt AI technologies faster than we can, potentially outpacing our innovation or efficiency improvements.
This could result in a loss of market share, reduced profitability, and increased difficulty in maintaining a competitive position within our industry.
AI systems, if not adequately secured, could expose our company to cybersecurity threats, including data breaches, intellectual property theft, and system compromises.
The exploitation of such vulnerabilities could lead to reputational damage, legal liabilities, and regulatory penalties.
Research and development, management and administrative expenses and cash used for operations will continue to be significant and may increase substantially in the future in connection with new and continued research and development initiatives and our pursuit of IND application(s) for some or all of our product candidates, as is required to initiate clinical trials in human subjects in the United States.
On January 27, 2026, we engaged in a registered direct offering and concurrent private placement, which locked-up our ability to engage in variable-rate transactions for a period of one year following January 27, 2026, subject to limited exceptions.
We have consolidated our employee base to save capital and focus on development of our lead candidate EB-003.
There has been limited study on the effects of psychedelic- inspired drug candidates, and 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 drug candidates.
Our limited resources have lead us to focus on a particular product candidate.
Our resource allocation decisions may cause us to fail to capitalize on viable medical solutions, therapeutic enhancements and commercial potentials because spending on our lead candidate for one or more indications specified therein may not yield any commercially viable products.
Inaccurate or limited evaluation of commercial and therapeutic potential may result in relinquishment of other valuable product candidate opportunities.
Some of these competitors and potential competitors have more experience than us in the development of pharmaceutical products, including clinical trials and regulatory matters.
In addition, our future product candidates, if successfully developed, will compete with product candidates from large and well-established companies that have greater commercial expertise than us or our collaboration partners have.
Other companies with greater resources than us may announce similar plans in the future.
In addition, we compete with these companies in recruiting and retaining scientific personnel as well as establishing clinical trial sites and patient recruitment for clinical trials.
To the extent we do not conduct these clinical trials under an IND application, the FDA may not accept data from such trials.
The trial population must also adequately represent the intended U.S. population, and the resulting clinical trial data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful.
In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the clinical trial data will be dependent upon our ability to verify the data and our determination that the clinical trials also complied with all applicable U.S. laws and regulations.
We cannot guarantee that the FDA will accept data from clinical trials conducted outside of the United States.
If any such actions are instituted against us, and we are not successful in defending the Company or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.
In the future, any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, such as the Health Insurance Portability and Accountability Act and European Union General Data Protection Regulation, government enforcement actions and regulatory penalties.

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Gone since FY2024

Risk factors Risks Related to Our Business and Financial Condition Our management and independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern as of December 31, 2024.
Our independent registered public accounting firm issued a report dated March 28, 2025 in connection with the audit of our consolidated financial statements as of December 31, 2024, which included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern including our recurring losses, cash used in operations, and need to raise additional funds to meet our obligations and sustain our operations.
In addition, the notes to our financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K, contain a disclosure describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern.
We intend to advance early research programs through preclinical development and to file an IND application for human clinical trials evaluating the prospective product candidates in our pipeline.
The preparation and submission of IND applications requires rigorous and time-consuming preclinical testing, the results of which must be sufficiently documented to establish, among other things, the toxicity, safety, manufacturing, chemistry and clinical protocol of the product candidates.
Research and development, management and administrative expenses and cash used for operations will continue to be significant and may increase substantially in the future in connection with new and continued research and development initiatives and our pursuit of IND authorization(s) for some or all of our product candidates, as is required to initiate clinical trials in human subjects in the United States.
In the first quarter of 2025, we engaged in a best efforts public offering, which locked-up our ability to issue securities or file registration statements for a period of 60 days following February 3, 2025, and engage in variable-rate transactions for a period of one year following February 3, 2025, each subject to limited exceptions.
Additionally, the Company does not have sufficient unreserved, authorized shares to secure an equity investment of a sufficient amount, based on the Company’s currently traded price per share, and the Company will require shareholder approval to increase the amount of authorized shares.
We have consolidated our employee base to save capital and focus on development of our leading candidate EB-003.
There has been limited study on the effects of psychedelic- inspired drug candidates, and 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 psychedelics.
Our limited resources have lead us to focus on a particular candidate.
Our resource allocation decisions may cause us to fail to capitalize on viable medical solutions, therapeutic enhancements and commercial potentials for viable markets when our spending on our current and future defined candidates with the indications specified therein may not yield any commercially viable products.
Inaccurate evaluation of potential may result in relinquishment of valuable product candidate opportunity.
Some of these competitors and potential competitors have more experience than us in the development of pharmaceutical products, including validation procedures and regulatory matters.
In addition, our future product candidates, if successfully developed, will compete with product offerings from large and well-established companies that have greater marketing and sales experience and capabilities than us or our collaboration partners have.
Other companies with greater resources than we may announce similar plans in the future.
In addition, we compete with these companies in recruiting and retaining scientific personnel as well as establishing clinical trial sites and patient registration for clinical trials.
To the extent we do not conduct these clinical trials in accordance under an IND application, the FDA may not accept data from such trials.
The trial population must also adequately represent the intended U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful.
In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon our ability to verify the data and our determination that the trials also complied with all applicable U.S. laws and regulations.
We cannot guarantee that the FDA will accept data from trials conducted outside of the United States.
If any such actions are instituted against us, and we are not successful in defending our Company or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.
In the future, any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, such as the Health Insurance Portability and Accountability Act (HIPPA) and European Union General Data Protection Regulation, government enforcement actions and regulatory penalties.
The availability of financing will be affected by the achievement of the Company’s corporate goals, the results of scientific and clinical research, the need and ability to obtain regulatory approvals and the state of the capital markets generally.
We may rely on third parties to plan and conduct preclinical and clinical trials.
We may rely on third parties to conduct preclinical development activities and intend to partner with third parties who may conduct clinical development activities with our psychedelic-inspired drug candidates and other product candidates.
Clinical development activities include trial design, regulatory submissions, clinical patient recruitment, clinical trial monitoring, clinical data management and analysis, safety monitoring and project management.
For completion of the “in vitro” portion of the preclinical testing we intend to conduct, when only lab-grade and lab-scale drug candidate molecules are required, we intend to synthesize the required psychedelic molecules in our laboratories in Calgary or at other third-party contract research organizations (“CROs”) that provide synthetic chemistry services.
When larger quantities and higher quality psychedelic molecules are required (e.g., for animal model testing), we intend to contract with appropriate third-party contract manufacturing organizations (“CMOs”), over which we may have limited control to, among other things, supply the active pharmaceutical ingredient (“API”) used in our drug candidates.
We intend to rely on CMOs to supply APIs and formulated drug products in compliance with GMP regulations.
All applicable jurisdictions, including Health Canada, and the FDA, ensure the quality of drug candidates by carefully monitoring drug manufacturers’ compliance with GMP regulations.
The GMP regulations for drug candidates contain minimum requirements for the methods, facilities and controls used in manufacturing, processing and packing of APIs and formulated a drug products.
Further, the failure of CMOs to operate in compliance with GMP regulations could result in, among other things, certain product liability claims in the event such failure to comply results in defective products (containing our drug candidates) that caused injury or harm.
In general, our dependence upon third parties for the supply of our APIs and formulated drug products may adversely affect profit margins and our ability to develop and deliver viable drug candidates on a timely and competitive basis.
Specifically, in conducting research and preclinical studies in compliance with current legislation, we substantially rely on the Facchini Drug License, which expires on December 31, 2025.
Until Enveric obtains its own Dealer’s License or Section 56 Exemption necessary for its business, the termination, non-renewal or hindrance of use of the Facchini Drug License would have a material adverse effect on Enveric’s ability to develop psychedelic-inspired drug candidate, conduct research or operate its business as it currently does.
A major risk we face is the possibility that none of the products containing our drug candidates will successfully gain market approval from Health Canada, the FDA or other regulatory authorities, resulting in our inability to derive any royalty-based revenue from them.
Raw materials requiring regulatory approval Some raw materials used by us will require regulatory approval by Health Canada and the FDA because the plant or fungi may contain a controlled substance.
Neither us, nor any third-party partner, have submitted any products containing our products for approval by regulatory authorities in Canada, the United States or elsewhere.
As of December 31, 2024, we had an accumulated deficit of $106.1 million and accumulated other comprehensive losses of $0.6 million.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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