What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 2051 added, 2476 removed, 1056 unchanged (81% of the section changed)

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as appropriate, to allow timely decisions regarding required disclosures.

As required by paragraph (b) of Rules 13a-15 and 15d-15 under

the Exchange Act, our Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer

and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls

and procedures as of December 31, 2021 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

in Internal Control (“COSO”).

Based on that evaluation, and as disclosed in Management’s Annual Report on Internal

Controls Over Financial Reporting, below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls

and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act), due to a material weakness in internal

controls, were not effective as December 31, 2021.

A material weakness is a deficiency, or combination of deficiencies,

in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual

or interim financial statements will not be prevented or detected on a timely basis.

required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer (our principal executive) and

Chief Financial Officer (our principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness

of the design and operation of our disclosure controls and procedures as of December 31, 2022.

Based on this evaluation, and in light

of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer

concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act)

were not effective as of December 31, 2022.

on Internal Control over Financial Reporting

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was not effective as of December 31, 2022 due to the material weaknesses described below.

A material weakness in internal

control over financial reporting is a deficiency or a combination of deficiencies, in internal control over financial reporting,

such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements

will not be prevented or detected on a timely basis.

We determined that our internal control over financial reporting had the following

material weaknesses:

material weakness in internal control over financial reporting is a deficiency or a combination of deficiencies, in internal control

over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim

financial statements will not be prevented or detected on a timely basis.

We determined that our internal control over financial reporting

had the following material weaknesses:

were unable to document, formalize, implement and revise where necessary controls, policies and procedure documentation to evidence

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had insufficient segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting

functions, including, without limitation, the processing, review and authorization of all routine and non-routine transactions,

due to limited personnel and resources.

functions, including, without limitation, the processing, review and authorization of all routine and non-routine transactions, due

to limited personnel and resources.

Company is evaluating these weaknesses to determine the appropriate remedy.

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in Internal Control over Financial Reporting

the quarter ended December 31, 2021, the Company was in the process of remediating its material weaknesses and to designing an effective

internal control environment, with its remediation efforts detailed below.

of December 31, 2022, the Company is in process of remediating its material weaknesses and designing an effective internal

control environment, however it has not yet remediated its material weaknesses.

efforts to address material weaknesses in internal controls

have engaged third party subject matter experts to assist in the design, documentation and testing protocols for an internal control

environment meeting those requirements and criteria established in the COSO 2013 Internal Control Integrated Framework;

have engaged information technology experts to design and implement a secure, cloud based, server and IT environment with controlled

engaged third party subject matter experts to assist in the design and documentation of an internal control environment meeting

those requirements and criteria established in the COSO 2013 Internal Control Integrated Framework;

engaged information technology experts who designed and implemented a secure, cloud based, server and IT environment with controlled

access, monitoring, help desk and a user training protocol;

have installed and implemented third party software that provides improved control, approvals and segregation of duties over the

purchase to pay operation cycle;

have engaged third party subject matter experts to provide independent supervision of accounting staff, transaction processing, reconciliations

and financial statement preparation, resulting in improved segregation of duties;

have engaged third party subject matter experts to assist in the financial reporting function, with such activities, including, without

limitation, preparation, review and reconciliation of financial reports, research of technical accounting issues/transactions, performing

various checklists to ensure compliance with GAAP and SEC requirements, with all such activities resulting in improved segregation

of duties and standards of control over the accuracy and completeness of financial reports.

installed and implemented third party software that provides improved control, approvals and segregation of duties over the purchase

to pay operation cycle;

engaged third party subject matter experts who are providing independent supervision of accounting staff, transaction processing,

reconciliations and financial statement preparation, resulting in improved segregation of duties;

engaged third party subject matter experts who are assisting in the financial reporting function, with such activities, including,

without limitation, preparation, review and reconciliation of financial reports, research of technical accounting issues/transactions,

performing various checklists to ensure compliance with GAAP and SEC requirements, with all such activities resulting in improved

segregation of duties.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

following table sets forth information regarding the members of our board of directors (the “Board”) and our executive officers.

Term of Office

Executive Officers and Directors

David Johnson

Executive Chairman

Since September 2021

Joseph Tucker, PhD

Chief Executive Officer and Director

Since September 2021

Avani Kanubaddi

President and Chief Operating Officer

Since December 2020

Chief Medical Officer

Since December 2021

Peter Facchini, PhD

Chief Innovation Officer

Since September 2021

Chief Financial Officer

Since May 2021

Non-Employee Directors

George Kegler

Director and Chair of the Audit Committee

Since December 2020

Since March 2021

Director and Chair of the Nominating and Corporate Governance Committee

Since December 2020

Officers and Directors

Joseph Tucker, Ph.D.

Executive Officer and Director

September 2021

and Chief Operating Officer

December 2020

Medical Officer

December 2021

Peter Facchini, Ph.D.

Innovation Officer

September 2021

Financial Officer

of the Board of Directors

and Chair of the Audit Committee

December 2020

and Chair of the Nominating and Corporate Governance Committee

Marcus Schabacker

Director and Chair of the Compensation Committee

Since December 2020

Brad Thompson, PhD

Since September 2021

December 2020

and Chair of the Compensation Committee

Officers and Directors

Johnson has served as our Executive Chairman since September 2021.

Previously, since December 2020, Mr.

Johnson served as Chairman

and Chief Executive Officer of Enveric.

Johnson also has served on the board of directors and as the Chief Executive Officer of Aquamed

Technologies, Inc.

since April 2019.

Johnson formerly served on the board of directors and as the President and Chief Executive Officer

of Alliqua BioMedical, Inc.

from November 2012 until April 2019.

Johnson was formerly President of the ConvaTec Division of Bristol-Myers

until 2008 when he orchestrated a sale of the division from its pharmaceutical parent to Avista Capital Partners and Nordic

Capital in a deal valued at $4.1 billion.

Concurrently, he acquired and integrated the assets of Copenhagen-based Unomedical to expand

ConvaTec Inc.’s manufacturing and infrastructure into Europe.

From 2008 through 2012, Mr.

Johnson served as the Chief Executive

Officer of ConvaTec Inc.

Prior to his tenure with ConvaTec Inc., Mr.

Johnson held several senior positions in the U.S., Europe and Canada

with Zimmer Inc., Fisher Scientific, and Baxter Corporation.

He served as a member of ConvaTec Inc.’s board of directors and the

board of the Advanced Medical Technology Association (AdvaMed), where he chaired the Global Wound Sector Team for four years.

received an Undergraduate Business Degree in Marketing from the Northern Alberta Institute of Technology in Edmonton, Alberta, Canada,

completed the INSEAD Advanced Management Program in Fontainbleau, France, and is a fellow from the Wharton School of the University of

Pennsylvania.

Johnson’s extensive experience in the pharmaceutical and biotechnology fields, as well as his executive leadership

experience, make him an asset that will serve as a bridge between the board of directors and our executive officers.

Tucker is a seasoned executive who has built several publicly traded biotechnology companies.

to joining Enveric, Dr.

Tucker was the Chief Executive Officer, President and Director of MagicMed Industries, from its founding in May

2020 to September 2021.

Tucker was the Executive Chairman of Willow Biosciences Inc.

Tucker has served as our President and Director since September 16, 2021.

Prior to joining Enveric, Dr.

Tucker was the

Chief Executive Officer, President and Director of MagicMed Industries, from its founding in May 2020 to September 2021.

the Executive Chairman of Willow Biosciences Inc.

from March 2014 to March 2020.

Tucker was a founder and Chief Executive Officer of Stem Cell Therapeutics, which he took public on the TSX (TSX:

Trillium Therapeutics

TRIL) acquired Stem Cell Therapeutics in 2013.

Tucker has also held the position of Co-Founder and Chief

Executive Officer of Epimeron Inc., a University of Calgary start-up acquired in the creation of Willow Biosciences Inc.

Tucker was a founder and Chief Executive Officer

of Stem Cell Therapeutics, which he took public on the TSX (TSX:

Trillium Therapeutics (Nasdaq:

TRIL) acquired Stem

Cell Therapeutics in 2013.

Tucker has also held the position of Co-Founder and Chief Executive Officer of Epimeron Inc., a University

of Calgary start-up acquired in the creation of Willow Biosciences Inc.

At Willow, Dr.

Tucker served as Executive Chairman and Chief Operating Officer.

Tucker served as Executive Chairman

and Chief Operating Officer.

Prior to founding companies, Dr.

Tucker was a healthcare

analyst with two investment banks and has also worked in technology commercialization for a university technology transfer office.

Tucker was a healthcare analyst with two investment banks and has also

worked in technology commercialization for a university technology transfer office.

Tucker received his Ph.D.

in Biochemistry and Molecular Biology from the University of Calgary.

in Biochemistry and

Molecular Biology from the University of Calgary.

Lind was appointed Chairman of the Nominating and Corporate Governance Committee in November 2022.

Pasqualone was appointed Chairman of the Compensation Committee in November 2022.

Kanubaddi has served as our President since October 2021 and Chief Operating Officer since December 30, 2020.

is an entrepreneur and business leader who has a passion for health and healing.

an entrepreneur and business leader who has a passion for health and healing.

From September 2019 through December 2020, Mr.

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with new concepts and guiding the company’s first-ever branded product launches.

In addition to NEXGEL, since August 2018,

In addition to NEXGEL, since August 2018, Mr.

Kanubaddi has also served as the Senior Partner at IQ/EQ Brand Strategy, where he assists companies in developing “go to market”

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Dagher has over twenty years of experience in clinical

development in the pharmaceutical industry and as a past board-certified physician from the American Board of neurology

and psychiatry.

He has an extensive therapeutic background concentrated in the neuroscience space which includes a focus on psychotic,

affective and anxiety disorders, as well as neuroimmunology, neurodegeneration and movement disorders.

development in the pharmaceutical industry and as a past board-certified physician from the American Board of neurology and psychiatry.

He has an extensive therapeutic background concentrated in the neuroscience space which includes a focus on psychotic, affective and

anxiety disorders, as well as neuroimmunology, neurodegeneration and movement disorders.

Furthermore, Dr.

Dagher has supported

and driven successful drug development programs from preclinical stages through Phase 4 clinical trials.

Following his early experience

treating patients in academic and private practice settings, Dr.

Dagher has supported and driven

successful drug development programs from preclinical stages through Phase 4 clinical trials.

Following his early experience treating

patients in academic and private practice settings, Dr.

Dagher started his career in the pharmaceutical industry at GlaxoSmithKline,

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product metabolism.

has served as our Chief Financial Officer since joining the Company in May 2021.

Ward has over 30 years of extensive public

company leadership experience in life sciences, SEC reporting and the capital markets.

As a hands-on financial leader who started his

career at KPMG, Mr.

Ward successfully negotiated and executed capital raises, developed strategic initiatives, created financial models

and led financial reporting efforts.

Before joining Enveric, from 2009 to 2021, Mr.

Ward served as CFO at Elite Pharmaceuticals,

a company that develops and manufactures oral, controlled-release products.

Prior to that, Mr.

Ward worked on the finance and supply

chain team at Actavis USA, the U.S.

subsidiary of European-based Actavis Group.

Additionally, Mr.

Ward worked at Centennial Communications,

and internationally at Ceejay Healthcare in India and Petro Pharma in Singapore.

Ward is a New York State Certified Public Accountant

(CPA) and Certified Supply Chain Professional (CSCP).

He obtained his Bachelor of Science degree in accounting from Long Island University

in Brooklyn, N.Y, graduating summa cum laude.

Coveney has served as our Chief Financial Officer since March 13, 2023.

Coveney brings to the Company years of experience

in biotechnology finance and accounting.

Coveney provided fractional CFO services to Progressive Therapeutics, Inc.

Patients, LLC, from June 2022 to July 2022 to August 2022, respectively.

Coveney previously held the position of a chief financial

officer at Memgen, Inc.

from November 2021 to June 2022 and at Q-State Biosciences, Inc.

from April 2020 to April 2021.

chief financial officer position, Mr.

Coveney served as Senior Vice President of Finance, HR & IT of Vedanta Biosciences, Inc.

November 2018 to February 2020.

He held various senior positions at Berg Health LLC from September 2015 to November 2018.

was an Audit Partner at Braver PC (now Marcum) from July 2007 through October 2012.

Coveney holds a Bachelor of Science degree in

Management with a Concentration in Accounting from the University of Massachusetts and served as a non-commissioned officer in the United

States Coast Guard.

Webb has served as a non-employee director of the Company since June 13, 2022.

Webb is the President and CEO of CXL Ophthalmics,

LLC and a member of its board of directors, positions he has held since 2017.

He has served as a director at iQure Pharma Inc.

2022, at GMDx Genomics since 2021, at RIFFIT, Inc.

since 2019, at Videokawa since 2018, and at DeuteRx, LLC since 2012.

a Principal and IntrinsicBio Life Sciences Consulting LLC, a position he has held since 2016.

He has been a founder and CEO of biotechnology

companies, taking them from seed round funding through venture financing and NASDAQ IPO.

Webb began his career in Booz, Allen &

Hamilton’s Chicago office, specializing in healthcare and life sciences and subsequently at CIBA-Geigy (now Novartis) where has

was last a senior vice president.

Webb holds Bachelor’s degrees in Biochemistry and Economics from the University of Kansas,

summa cum laude and an MA in International Relations from Sussex University in the UK.

In addition, he holds an MBA degree from Kellogg

with a concentration in healthcare management.

He is a past Chairman of the Massachusetts Biotechnology Council.

Webb’s relevant

industry experience qualifies him to be a director of the Company.

Kegler has served as a non-employee director of the Company since December 30, 2020.

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Saint Louis University and completed the Certified Public Accountant exam in Missouri.

Kegler’s experience as an officer at several companies and extensive knowledge of corporate finance qualify

him to be a director of the Company.

Douglas Lind has served as a non-employee director of the Company since March 17, 2021.

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Partner, since 2013 at Biomark Capital, a Greenwich, CT-based healthcare venture firm.

There, his investment focus has included

cellular therapy, medical imaging, peripheral vascular disease, and oncology.

Lind has more than 30 years of experience in a variety

of life science related professions, ranging from former practicing physician to senior Wall Street equity research analyst at Morgan

There, his investment focus has included cellular

therapy, medical imaging, peripheral vascular disease, and oncology.

Lind has more than 30 years of experience in a variety of life

science related professions, ranging from former practicing physician to senior Wall Street equity research analyst at Morgan Stanley.

Lind is a graduate of the University of Iowa, College of Medicine.

He was a practicing physician in Brookline, Massachusetts.

He served as an attending physician at St.

Elizabeth’s Hospital in Boston, a major teaching affiliate of Tufts University School

of Medicine, where he completed his residency training in Internal Medicine.

Mayer has served as a non-employee director of the Company since December 30, 2020.

Mayer has served as a member of the board

of directors of DropCar, Inc (Nasdaq:

DCAR) from 2018 through May of 2020.

He has served as President and Chief Executive Officer

of Mooney Aviation Company, a private company that manufactures four-place, single-engine and piston-powered aircraft, since 1999.

was a member of the board of directors of Microbot Medical, Inc (Nasdaq:

MBOT) from 2014-2017.

Prior to that time, he held the

position of Chief Executive Officer of, Overseas Trading, a department store wholesaler.

Mayer currently serves as a director of

Laniado Hospital, a voluntary, not-for-profit hospital in Netanya, Israel, as well as a director of several private companies.

He previously

served as a consultant to and director of each of Innovative Food Holdings, a provider of sourcing, preparation and delivery of specialty/fresh

food for both professional chefs and consumers, and BlastGard International Inc., which manufactures and markets proprietary blast mitigation

materials, in each case, from 2002 until 2016.

Since 1992, Mr.

Mayer has also been a member of the board and since 2021 a member of

the presidium of Chai Lifeline Camp Simcha, an organization dedicated to the support of children with cancer or other life- threatening

served as an attending physician at St.

Elizabeth’s Hospital in Boston, a major teaching affiliate of Tufts University School of

Medicine, where he completed his residency training in Internal Medicine.

Lind’s medical background and

relevant industry experience qualify him to be a director of the Company.

Marcus Schabacker, PhD has served as a non-employee director of the Company since December 30, 2020.

Since January 2018, Dr.

Schabacker has served as president and chief executive officer of the ECRI Institute, a non-profit organization with 500 employees

and an operating budget of $80 million focusing on advancing evidenced-based, effective healthcare globally.

Prior to joining

Schabacker worked at Baxter Healthcare Corporation, serving as corporate vice president and chief scientific officer from July

2015 to May 2017, chairman of the executive quality council from March 2014 to May 2017, Chief Scientific Officer, Medical Products from

July 2014 to July 2015, and Vice President, R&D, Medical Products from March 2011 to July 2014.

During his clinical years, and his

time as an industry thought leader, Dr.

Schabacker has served as president and chief executive officer of the ECRI Institute, a non-profit organization with 500 employees and

an operating budget of $80 million focusing on advancing evidenced-based, effective healthcare globally.

Prior to joining ECRI, Dr.

worked at Baxter Healthcare Corporation, serving as corporate vice president and chief scientific officer from July 2015 to May 2017,

chairman of the executive quality council from March 2014 to May 2017, Chief Scientific Officer, Medical Products from July 2014 to July

2015, and Vice President, R&D, Medical Products from March 2011 to July 2014.

During his clinical years, and his time as an industry

thought leader, Dr.

Schabacker was focused on patient safety and enhancing patient care.

For over a decade Dr.

has served on numerous boards of small and midsize companies and organizations, providing management with guidance and expertise to strategically

Schabacker has served

on numerous boards of small and midsize companies and organizations, providing management with guidance and expertise to strategically

accelerate growth and to build successful and sustainable high performing management teams.

Brad Thompson, PhD has served as a non-employee director of the Company since

September 2021.

Thompson is an experienced biotechnology company founder and executive

with 40 years’ experience in the public markets sector.

Thompson is an experienced

biotechnology company founder and company executive.

Since December 2016, he has been

the Chief Executive Officer of Kickshaw Ventures Inc.

Prior to that, from 1999 to 2016, Dr.

Thompson served as the Chairman, CEO and President of Oncolytics Biotech (Nasdaq:

He has served as Chairman, Director and Audit Committee member on a number of other public

company (Nasdaq:

TSX, CDNX) boards of directors, and private company boards and industry

groups (including Chairman and Chairman Emeritus of BIOTECanada).

Thompson earned his

BSc in Microbiology at the University of Alberta in 1978 and his Ph.D.

from the University

of Western Ontario in the Department of Microbiology and Immunology in 1981.

Schabacker’s medical background and relevant research and development experience qualify him to be a director

of the Company.

Pasqualone has served as a non-employee director of the Company since July 13, 2022.

Pasqualone has served as Senior Vice

President, Chief Business Officer of Theravance Biopharma, Inc.

since November 2020 and joined Theravance Biopharma as Senior Vice President,

Operations in June 2014 in connection with its spin-off from Innoviva.

Pasqualone held the position of Senior Vice President, Operations

at Innoviva since January 2014.

From 2010 to 2012, he served as President of Intercontinental Region:

Latin America, Middle East and

Africa and also as President of Southern Europe from 2009 to 2010, at Bristol-Myers Squibb (BMS).

Over a 25-year period with BMS, Mr.

Pasqualone held senior management positions in the U.S.

and globally.

In the U.S., he was responsible for the Oncology/Virology business

and led the marketing group in the Diabetes business.

After leaving Bristol-Myers Squibb and prior to joining Theravance, Mr.

was self-employed as a part-time consultant.

Pasqualone holds an M.B.A.

from University of Dayton and a B.S.

in Marketing from Bowling

Green State University in Ohio.

Pasqualone’s relevant industry experience as an officer at several companies qualifies him

to be a director of the Company.

O’Neil has served as a non-employee director of the Company since June 13, 2022.

O’Neil has served at ECRI, a

nonprofit organization focused on advancing effective, evidenced-based healthcare globally since 2021, first as VP, Strategy and currently

as Chief Strategy Officer.

Prior to ECRI, O’Neil was the founder and managing partner of Incline GEP from 2014 until 2021.

2011 to 2013, O’Neil served on the drug access team of Clinton Health Access Initiative (CHAI), responsible for improving sustainable

access to pediatric HIV drugs and diagnostics for the developing world utilizing a market-based approach.

Earlier in her career, O’Neil

was a Principal at Avista Capital Partners, founded by former DLJ Merchant Banking partners.

At Avista, O’Neil launched the consumer

silo and executed five private equity investments and related tack-on acquisitions in healthcare and consumer, four of which were corporate

carve-outs requiring intense operational and infrastructure building.

Prior to Avista, O’Neil was a senior manager in business

development at Tumi, an Oaktree Capital Management portfolio company.

In addition, O’Neil served various roles in the private equity

groups of Guggenheim Partners, Oaktree Capital Management, and DLJ Merchant Banking.

O’Neil received a BBA from the University

O’Neil’s expertise in business operations and fundraising experience qualify her to be a director of the

Relationships

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Form 4 was filed late for Mr.

Carter Ward with respect to his appointment as Chief Financial

Form 3 was filed late for Dr.

Facchini with respect to his appointment as an officer.

Form 4 was filed late for Dr.

Facchini with respect to one transaction.

Form 4 was filed late form Dr.

Joseph Tucker with respect to one transaction.

Form 4 was filed late for Mr.

Bradley Thompson with respect to one transaction.

Avani Kanubaddi with respect to one transaction.

Form 4 was filed late for Mr.

Douglas Lind with respect to his appointment to the Board.

One Form 4 was filed late for Mr.

Lind with respect to one transaction.

of the late reports were initial reports of ownership related to the new appointees, due to the time delays incurred in obtaining individual

SEC EDGAR codes required to make the required filings.

Carter Ward with respect to one transaction.

Form 3 was filed late for Ms.

Bevin O’Neil with respect to her appointment to the Board.

None of these cases involved purchase or sale, but rather non-market transactions

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non-business backgrounds.

are currently listed on the Nasdaq Stock Market and therefore rely on the definition of independence set forth in the Nasdaq

Listing Rules (“Nasdaq Rules”).

Under the Nasdaq Rules, a director will only qualify as an “independent

director” if, in the opinion of our board, that person does not have a relationship that would interfere with the exercise of independent

judgment in carrying out the responsibilities of a director.

Based upon information requested from and provided by each director concerning

his background, employment, and affiliations, including family relationships, we have determined that Mr.

are currently listed on the Nasdaq Stock Market and therefore rely on the definition of independence set forth in the Nasdaq Listing

Rules (“Nasdaq Rules”).

Under the Nasdaq Rules, a director will only qualify as an “independent director” if,

in the opinion of our board, that person does not have a relationship that would interfere with the exercise of independent judgment

in carrying out the responsibilities of a director.

Based upon information requested from and provided by each director concerning his

background, employment, and affiliations, including family relationships, we have determined that Mr.

Pasqualone, Ms.

Lind have no material relationships with us that would interfere with the exercise of independent judgment and are “independent

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Committees, Meetings and Attendance

the year ended December 31, 2021, the Board held 14 meetings

and acted by written consent on seven occasions.

We expect our directors to attend board meetings, meetings of any

committees and subcommittees on which they serve and each annual meeting of stockholders.

the year ended December 31, 2022, the Board held 14 meetings and acted by written consent on seven occasions.

We expect our directors

to attend board meetings, meetings of any committees and subcommittees on which they serve and each annual meeting of stockholders.

board delegates various responsibilities and authority to different board committees.

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following table sets forth the membership of each of the Board committees listed above.

and Technology Committee

and Corporate Governance Committee

Joseph Tucker

Marcus Schabacker

Thompson, PhD

Audit Committee provides assistance to the Board in fulfilling the Board’s responsibility to the Company’s

stockholders relating to the Company’s accounting and financial reporting practices and system of internal control, the

audit process, the quality and integrity of the Company’s financial reporting, and the Company’s process for

monitoring compliance with laws and regulations and its code of conduct.

Audit Committee provides assistance to the Board in fulfilling the Board’s responsibility to the Company’s stockholders relating

to the Company’s accounting and financial reporting practices and system of internal control, the audit process, the quality and

integrity of the Company’s financial reporting, and the Company’s process for monitoring compliance with laws and regulations

and its code of conduct.

Audit Committee is responsible for, among other matters:

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and pre-approving audit and non-audit fees and services;

accounting and financial controls with the independent auditors and our financial and accounting

accounting and financial controls with the independent auditors and our financial and accounting staff;

and approving transactions between us and our directors, officers and affiliates;

● recognizing

and preventing prohibited non-audit services;

● establishing

procedures for complaints received by us regarding accounting matters;

internal audit functions, if any;

the report of the audit committee that the rules of the SEC require to be included in our

annual meeting proxy statement.

of March 29, 2022, the members of our Audit Committee were George Kegler (chairman), Dr.

Douglas Lind, and Dr.

Bradley Thompson.

Our Board has determined that Mr.

Thompson are independent in accordance with Nasdaq Rules and

Rule 10A-3 under the Exchange.

Our Board has also reviewed the education, experience, and other qualifications of each member of the Audit

the report of the audit committee that the rules of the SEC require to be included in our annual meeting proxy statement.

of March 31, 2023, the members of our Audit Committee were George Kegler (chairman), Frank Pasqualone, and Bevin O’Neil.

Board has determined that Mr.

Pasqualone and Ms.

O’Neil are independent in accordance with Nasdaq Rules and Rule 10A-3 under

the Exchange.

Our Board has also reviewed the education, experience, and other qualifications of each member of the Audit Committee.

Based upon that review, our Board has determined that Mr.

Kegler qualifies as an “audit committee financial expert,”

as defined by the rules of the SEC.

Kegler qualifies as an “audit committee financial expert,” as defined

by the rules of the SEC.

The Audit Committee met four times during the year ended December 31, 2022.

Compensation Committee is responsible for, among other matters:

and recommending the compensation arrangements for management, including the compensation

for our president and chief executive officer;

● establishing

and reviewing general compensation policies with the objective to attract and retain superior

talent, to reward individual performance and to achieve our financial goals;

and recommending the compensation arrangements for management, including the compensation for our president and chief executive officer;

and reviewing general compensation policies with the objective to attract and retain superior talent, to reward individual performance

and to achieve our financial goals;

administering

our stock incentive plans;

the report of the compensation committee that the rules of the SEC require to be included

in our annual meeting proxy statement.

the report of the compensation committee that the rules of the SEC require to be included in our annual meeting proxy statement.

of March 31, 2023, the members of our Compensation Committee were Dr.

Marcus Schabacker (chairman), Sol Mayer and George Kegler.

Our Board has determined that Dr.

Schabacker, Mr.

Mayer and Mr.

Kegler are independent in accordance with Nasdaq Rules.

Frank Pasqualone (chairman), Michael Webb, and Bevin O’Neil.

Board has determined that Mr.

Pasqualone, Mr.

O’Neil are independent in accordance with Nasdaq Rules.

The Compensation

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Nominating and Corporate Governance Committee is responsible for, among other matters:

the current composition, organization and governance of the board and its committees, and

making recommendations for changes thereto;

the current composition, organization and governance of the board and its committees, and making recommendations for changes thereto;

each director and nominee annually;

● determining

desired board member skills and attributes and conducting searches for prospective members

nominees, and making recommendations to the Board concerning the appointment of directors

to board committees, the selection of board committee chairs, proposal of the slate of directors

for election to the board, and the termination of membership of individual directors in accordance

with the board’s governance principles;

the process of succession planning for the chief executive officer and as warranted,

other senior officers of the Company;

● developing,

desired board member skills and attributes and conducting searches for prospective members accordingly;

nominees, and making recommendations to the Board concerning the appointment of directors to board committees, the selection of board

committee chairs, proposal of the slate of directors for election to the board, and the termination of membership of individual directors

in accordance with the board’s governance principles;

the process of succession planning for the chief executive officer and as warranted, other senior officers of the Company;

adopting, and overseeing the implementation of a code of business conduct and ethics;

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the annual board performance evaluation process.

of March 29, 2022, the members of our Compensation Committee were Sol Mayer (chairman), Dr.

of March 31, 2023, the members of our Nominating and Corporate Governance Committee were Douglas Lind (chairman), Dr.

Marcus Schabacker and George Kegler.

The Nominating and Corporate Governance Committee met one time during the year ended December 31, 2021.

Nominating and Corporate Governance Committee met one time during the year ended December 31, 2022.

EXECUTIVE COMPENSATION

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following table sets forth total compensation paid to the named executive officers for the years ended December 31, 2022 and 2021:

and Principal Position

6,469,066 (4)

Name and Principal Position

Joseph Tucker (2)

Chief Executive Officer

2,226,992 (5)

Executive Officer

Kanubaddi (9)

Avani Kanubaddi (6)

President and Chief Operating Officer

3,789,523 (7)

and Chief Operating Officer

Peter Facchini (8)

1,566,910 (14)

Innovation Officer

Robert Wilkins (15)

Chief Innovation Officer

1,566,910 (11)

Chief Medical Officer

Stock compensation consists of Restricted Stock Unit Award (“RSU’s”)

and Restricted Stock Awards (“RSA’s”).

RSU’s and RSA’s may contain vesting conditions that include, without

limitation, continued employment or engagement with the Company, achievement of defined stock price levels or achievement of defined performance

milestones, termination of the employee without cause, resignation of the employee for good cause or change in control.

Please also note

there are no assurances that such vesting conditions will be met and accordingly there are no assurances that any unvested RSU’s

or RSA’s will become vested prior to being forfeited on the expiration date defined in the relevant award agreements.

RSU’s require that the recipient’s employment with the Company be terminated, or that a change of control occur, as a prerequisite

of conversion of vested restricted stock units into shares of Common Stock.

RSA’s have no such condition of termination or change

of control as a prerequisite of conversion of vested restricted stock awards into shares of Common Stock.

Johnson was appointed Chairman and Chief Executive Officer on December 30, 2020.

Johnson resigned as Chief Executive Officer and was appointed Executive Chairman of the Board of Directors on September 16, 2021.

Johnson’s bonus for 2021 was paid in February 2022 .

Johnson’s bonus for 2020 was paid in two increments of $100,000 each in December 2020 and in February of 2021.

Johnson’s stock compensation consists of an aggregate of 1,347,722 RSU’s valued at $6,469,066, with such valuation being

based on the Company’s closing price per share of $4.80 on the grant date of such RSU’s.

As of December 31, 2021, all

of these RSU’s are vested.

Johnson’s stock compensation excludes an aggregate of 21,277 RSU’s, with a grant

date value of $102,130, due to such RSU’s being forfeited due to non-achievement of specific performance milestones.

compensation consists of Restricted Stock Unit Award (“RSU’s”) and Restricted Stock Awards (“RSA’s”).

RSU’s and RSA’s may contain vesting conditions that include, without limitation, continued employment or engagement with

the Company, achievement of defined stock price levels or achievement of defined performance milestones, termination of the employee

without cause, resignation of the employee for good cause or change in control.

Please also note there are no assurances that such

vesting conditions will be met and accordingly there are no assurances that any unvested RSU’s or RSA’s will become vested

prior to being forfeited on the expiration date defined in the relevant award agreements.

Furthermore, RSU’s require that the

recipient’s employment with the Company be terminated, or that a change of control occur, as a prerequisite of conversion of

vested restricted stock units into shares of Common Stock.

RSA’s have no such condition of termination or change of control

as a prerequisite of conversion of vested restricted stock awards into shares of Common Stock.

Tucker was appointed Chief Executive Officer on September 16, 2021.

Bonus for 2021 was paid in February 2022.

Bonus consists of $100,000 paid in September 2021 and

$59,063 attributable to 2021 paid in February 2022.

Tucker’s stock compensation consists of an aggregate of 818,747 RSU’s, valued at $2,226,992, with such valuation being

based on the Company’s closing price per share of $2.72 on the RSU grant date.

All of these RSU’s are unvested

as of December 31, 2021, with no assurances of these RSU’s vesting in the future.

Bonus for 2022 was paid in January 2023.

for 2021 was paid in February 2022.

Bonus for 2022 consists of a one-time bonus of $194,000 paid in 2022 and $270,270 attributable to 2022 was paid in January 2023.

Bonus consists of $100,000 paid in September 2021 and $59,063 attributable to 2021 paid in February 2022.

Tucker’s 2021 stock compensation consists of an aggregate of 16,375 RSU’s, valued at $2,226,992,

with such valuation being based on the Company’s closing price per share of $136.00 on the RSU grant date.

All of these RSU’s

are unvested as of December 31, 2021, with no assurances of these RSU’s vesting in the future.

Kanubaddi served as Chief Operating Officer from December 30, 2020 through September 30, 2021.

Kanubaddi was appointed President on October 1, 2021.

Kanubaddi’s stock compensation consists of an aggregate of 789,484 RSU’s, valued at $3,789,523, with such valuation being

based on the Company’s closing price per share of $4.80 on the RSU grant date.

All of these RSU’s are vested.

Kanubaddi’s 2022 stock compensation consists of an aggregate of 22,556 RSU’s, valued at $755,626, with such valuation being based on the Company’s closing price per

share of $33.50 on the RSU grant date.

All of these RSU’s are unvested as of December 31, 2022.

Kanubaddi’s 2021 stock compensation consists of an aggregate of 15,790 RSU’s, valued at $3,789,523,

with such valuation being based on the Company’s closing price per share of $240.00 on the RSU grant date.

All of these RSU’s

Facchini has served as Chief Innovation Officer since September 16, 2021.

and bonus paid in Canadian Dollars and translated to United States Dollars equivalent.

for 2022 was paid in January 2023.

consists of $40,390 paid in September 2021 and $29,039 attributable to 2021 paid in February 2022.

Facchini’s stock compensation consists of an aggregate of 576,070 RSU’s, valued at $1,556,910, with such valuation being

based on the Company’s closing price per share of $2.72 on the RSU grant date.

All of these RSU’s are unvested

as of December 31, 2021, with no assurances of these RSU’s vesting in the future.

Wilkins served as Chief Medical Officer from December 30, 2020 to November 30, 2021.

Wilkins’ stock compensation consists of an aggregate of 526,000 RSU’s, valued at $1,541,180, with such valuation being

based on the Company’s closing price per share of $2.93 on the RSU grant date.

175,333 of these RSU’s are vested, with

Common Shares to be issued during June 2022.

The remaining 350,667 RSU’s were unvested and forfeited upon Dr.

Facchini’s 2021 stock compensation consists of an aggregate of

11,522 RSU’s, valued at $1,556,910, with such valuation being based on the Company’s closing price per share of $ on the RSU

All of these RSU’s are unvested as of December 31, 2021, with no assurances of these RSU’s vesting in the future.

Disclosure to Summary Compensation Table

to the completion of the Offer, and in connection with the execution of that certain Amalgamation Agreement, dated January 10, 2020,

by and among the Company (f/k/a Ameri), Jay Pharma, Jay Pharma Merger Sub, Inc., 1236567 B.C.

Unlimited Liability Company and Barry Kostiner,

as the Company representative, which predates the Tender Agreement related to the Offer (the “Tender Agreement”),

Jay Pharma entered into an employment agreement with Mr.

Johnson, whereby Mr.

Johnson would serve as the Chief Executive Officer

and Chairman of the Company upon the completion of the Offer (the “Johnson Employment Agreement”).

Employment Agreement

Pursuant to the Johnson Employment

Agreement, dated January 10, 2020, Mr.

Johnson served in the position of Chief Executive Officer and Chairman of the Company following

the completion of the Offer.

Johnson was entitled to a base salary of $250,000 and an annual bonus in the amount of $100,000

(provided, however, that if Mr.

Johnson’s position was changed such that he no longer serves as Chief Executive Officer

and only serves as Chairman of the Company, he would only be entitled to a base salary of $100,000 beginning with the first day

of the month following such change).

Johnson was also eligible to receive annual performance bonuses based on satisfaction

of performance criteria/financial results, as determined by the board of directors of the Company in its sole discretion.

Within 30 days

after the completion of the Offer, Mr.

Johnson was granted an award of restricted stock units that represent, in the aggregate,

5% of the Company’s issued and outstanding common stock determined on a fully diluted basis as of the date of grant.

was eligible to receive additional equity awards, as determined by the Company in its sole discretion.

Under the terms of the Johnson

Employment Agreement, Mr.

Johnson’s employment may have been terminated by either the Company or Mr.

Johnson at any time

and for any reason with 30 days’ advance written notice.

Upon termination of Mr.

Johnson’s employment, Mr.

Johnson would

have received (i) his fully earned but unpaid base salary through the date of termination, (ii) any accrued and unpaid time off or

similar pay to which Mr.

Johnson was entitled as a matter of law or Company policy, (iii) any amounts due to Mr.

Johnson under

the terms of the benefit plans, and (iv) any unreimbursed expenses properly incurred prior to the date of termination (the “Johnson

Accrued Obligations”).

If the Company terminated

Johnson’s employment for cause or Mr.

Johnson resigns without good reason (as defined below), the Company, at its sole

discretion, may have shortened the notice period and determine the date of termination without any obligation to pay any additional

compensation other than the Johnson Accrued Obligations and without triggering a termination of Mr.

Johnson’s employment without

If the Company terminated Mr.

Johnson’s employment without cause or Mr.

Johnson resigned for good reason at

any time, Mr.

Johnson would have been entitled to the following severance payments and benefits:

(i) his full annual base salary

less applicable deductions and withholdings;

plus (ii) any earned but unpaid annual bonus and performance bonus, if any, for the year

of the termination.

The Johnson Employment Agreement

also contained certain standard non-solicitation, non-disparagement and confidentiality requirements for Mr.

As of December 31, 2021,

Johnson has been awarded an aggregate of 1,347,722 RSU’s, all of which are vested.

Johnson will be eligible to convert

these vested RSU’s into an equivalent number of shares of Common Stock on the first day of the seventh month subsequent to either

his termination of employment with the Company, or in the event of a change in control, and provided compliance with all terms and conditions

of the 2020 Plan, including, without limitation, the availability of shares approved by the Company’s shareholders for such issuance.

Employment Agreement

May 24, 2021, Dr.

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also received, upon entering into the Tucker Employment Agreement, a one-time signing bonus of $100,000 and 1,375 RSUs, of which half

are subject to time-based vesting and the other half subject to performance-based vesting.

are subject to time-based vesting and the other half subject to market-based vesting.

Pursuant to the Tucker Employment Agreement,

1 unchanged sentence

Tucker also received an initial equity compensation received grant of 15,000 RSUs, of which half

are subject to time-based vesting and the other half subject to performance-based vesting.

are subject to time-based vesting and the other half subject to market-based vesting.

The RSUs are subject to the terms and conditions

1 unchanged sentence

The Tucker time-based RSUs vest in quarters on each of the first four anniversaries

of the Tucker Effective Date, and the Tucker performance-based RSUs shall vest based on the achievement of performance milestones established

by the Company.

of the Tucker Effective Date.

in calendar year 2022, Dr.

1 unchanged sentence

from time to time by the Company’s board of directors.

The Tucker Employment Agreement

will remain in effect until terminated by either party, unless the Company or Dr.

Tucker delivers advance written notice of termination

to the other party at least 30 days prior.

In addition, the Tucker Employment Agreement is subject to early termination by him or the

Company in accordance with the terms of the Tucker Employment Agreement.

Pursuant to the Tucker Employment

Agreement, if Dr.

Tucker Employment Agreement will remain in effect until terminated by either party, unless the Company or Dr.

Tucker delivers advance

written notice of termination to the other party at least 30 days prior.

In addition, the Tucker Employment Agreement is subject to early

termination by him or the Company in accordance with the terms of the Tucker Employment Agreement.

to the Tucker Employment Agreement, if Dr.

Tucker’s employment is terminated by the Company without cause or by Dr.

Tucker for good reason, then the Company

Tucker, in addition to any then-accrued and unpaid obligations owed to him, 12 months of the then-current Tucker Base Salary.

good reason, then the Company must pay Dr.

Tucker, in addition to any then-accrued and unpaid obligations owed to him, 12 months of the

then-current Tucker Base Salary.

Tucker Employment Agreement also contains covenants restricting Dr.

3 unchanged sentences

of confidential information regarding the Company at any time.

As of December 31, 2021,

Tucker has been awarded an aggregate of 818,747 RSU’s, with all being unvested.

Vesting conditions include, without limitation,

continued employment or engagement with the Company, achievement of defined stock price levels, termination of the employee without cause,

resignation of the employee for good cause or change in control and there can be no assurances of any of these vesting conditions being

achieved and accordingly no assurances of any of these RSU’s vesting.

Furthermore, in the event that any or all of these RSU’s

Tucker will be eligible to convert any vested RSU’s into an equivalent number of shares of Common Stock on the first

day of the seventh month subsequent to either his termination of employment with the Company or in the event of a change in control and

provided compliance with all terms and conditions of the 2020 Plan, including, without limitation, the availability of shares approved

by the Company’s shareholders for such issuance.

of December 31, 2022, Dr.

Tucker has been awarded an aggregate of 16,375 RSU’s, of which 14,157 are unvested.

Vesting conditions include,

without limitation, continued employment or engagement with the Company, achievement of defined stock price levels, termination of the

employee without cause, resignation of the employee for good cause or change in control and there can be no assurances of any of these

vesting conditions being achieved and accordingly no assurances of any of these RSU’s vesting.

Furthermore, in the event that any

or all of these RSU’s do vest, Dr.

Tucker will be eligible to convert any vested RSU’s into an equivalent number of shares

of Common Stock on the first day of the seventh month subsequent to either his termination of employment with the Company or in the event

of a change in control and provided compliance with all terms and conditions of the 2020 Plan, including, without limitation, the availability

of shares approved by the Company’s shareholders for such issuance.

Employment Agreement

Prior to the completion of

the Offer, and contingent and effective upon the completion of the Offer, the Company entered into an employment agreement with Mr.

(the “Kanubaddi Employment Agreement”).

Pursuant to the Kanubaddi Employment Agreement, dated December 2, 2020, Mr.

serves in the position of Chief Operating Officer.

Kanubaddi is entitled to a base salary of $295,000 and a closing bonus in the

amount of $60,000.

Kanubaddi is also eligible to receive annual performance bonuses of up to 50% of his base salary based on satisfaction

of performance criteria/financial results, as determined by the board of directors of the Company in its sole discretion.

Within 30 days

after the completion of the Offer, Mr.

Kanubaddi was granted an award of restricted stock units that represent, in the aggregate,

3% of the Company’s issued and outstanding common stock determined on a fully diluted basis as of the date of grant.

is also eligible to receive additional equity awards, as determined by the Company in its sole discretion.

to the completion of the Offer, and contingent and effective upon the completion of the Offer, the Company entered into an employment

agreement with Mr.

Kanubaddi (the “Kanubaddi Employment Agreement”).

Pursuant to the Kanubaddi Employment Agreement, dated

December 2, 2020, Mr.

Kanubaddi serves in the position of Chief Operating Officer.

Kanubaddi is entitled to a base salary of $295,000

and a closing bonus in the amount of $60,000.

Kanubaddi is also eligible to receive annual performance bonuses of up to 50% of his

base salary based on satisfaction of performance criteria/financial results, as determined by the board of directors of the Company in

its sole discretion.

Within 30 days after the completion of the Offer, Mr.

Kanubaddi was granted an award of restricted stock units that

represent, in the aggregate, 3% of the Company’s issued and outstanding common stock determined on a fully diluted basis as of

the date of grant.

Kanubaddi is also eligible to receive additional equity awards, as determined by the Company in its sole discretion.

the terms of the Kanubaddi Employment Agreement, Mr.

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Kanubaddi’s employment for cause or Mr.

Kanubaddi resigns without good reason (as

defined below), the Company, at its sole discretion, may shorten the notice period and determine the date of termination without any

obligation to pay any additional compensation other than the Kanubaddi Accrued Obligations and without triggering a termination of Mr.

Kanubaddi’s employment without cause.

Kanubaddi resigns without good reason (as defined below), the

Company, at its sole discretion, may shorten the notice period and determine the date of termination without any obligation to pay any

additional compensation other than the Kanubaddi Accrued Obligations and without triggering a termination of Mr.

Kanubaddi’s employment

without cause.

If the Company terminates Mr.

Kanubaddi’s employment without cause or Mr.

resigns for good reason at any time, Mr.

Kanubaddi resigns for good reason at any

Kanubaddi is entitled to the following severance payments and benefits:

(i) his full annual

base salary less applicable deductions and withholdings;

plus (ii) any earned but unpaid performance bonus, if any, for the year of the

(i) his full annual base salary less applicable deductions

and withholdings;

plus (ii) any earned but unpaid performance bonus, if any, for the year of the termination.

Kanubaddi Employment Agreement also contains certain standard non-solicitation, non-disparagement and confidentiality requirements for

As of December 31, 2021,

Kanubaddi has been awarded an aggregate of 789,484 RSU’s, all of which are vested.

Kanubaddi will be eligible to convert

these vested RSU’s into an equivalent number of shares of Common Stock on the first day of the seventh month subsequent to either

his termination of employment with the Company, or in the event of a change in control, and provided compliance with all terms and conditions

of the 2020 Plan, including, without limitation, the availability of shares approved by the Company’s shareholders for such issuance.

of December 31, 2022, Mr.

Kanubaddi has been awarded an aggregate of 38,346 RSU’s, of which 22,556 are unvested.

will be eligible to convert these vested RSU’s into an equivalent number of shares of Common Stock on the first day of the

seventh month subsequent to either his termination of employment with the Company, or in the event of a change in control, and

provided compliance with all terms and conditions of the 2020 Plan, including, without limitation, the availability of shares

approved by the Company’s shareholders for such issuance.

Employment Agreement

3 unchanged sentences

(the “Facchini Effective Date”).

Pursuant to the Facchini

Employment Agreement, as of the Facchini Effective Date, Dr.

Facchini has received a base salary of C$295,000 annually (“Facchini

Base Salary”).

Facchini also received a one-time signing bonus of C$50,000 and up to 130,000 RSUs, based on the price of the

Company’s shares at the Facchini Effective Date.

Half of any such RSUs are subject to time-based vesting, and the remaining half

of any such RSUs are subject to performance-based vesting.

Beginning in calendar year 2022, Dr.

Facchini became eligible to receive annual

performance bonuses of up to 50% of the Facchini Base Salary, as determined from time to time by the Company’s board of directors.

to the Facchini Employment Agreement, as of the Facchini Effective Date, Dr.

Facchini has received a base salary of C$295,000 annually

(“Facchini Base Salary”).

Facchini also received a one-time signing bonus of C$50,000 and up to 130,000 RSUs, based on

the price of the Company’s shares at the Facchini Effective Date.

Half of any such RSUs are subject to time-based vesting, and

the remaining half of any such RSUs are subject to market-based vesting.

Additionally, Dr.

Facchini received 10,500 RSUs as equity compensation.

262,500 of such RSUs are subject to time-based vesting, and

the remaining 262,500 of such RSUs are subject to performance-based vesting.

The RSUs are subject to the terms and conditions of the

Company’s 2020 Long-Term Incentive Plan.

The RSUs are subject to time-based vesting and shall vest in quarters on each of the first

four anniversaries of the Facchini Effective Date, and the RSUs shall vest based on the achievement of performance milestones established

by the Company.

5,250 of such RSUs are subject to time-based

vesting, and the remaining 5,250 of such RSUs are subject to market-based vesting.

The RSUs are subject to the terms and conditions

of the Company’s 2020 Long-Term Incentive Plan.

The RSUs are subject to time-based vesting and shall vest in quarters on each of

the first four anniversaries of the Facchini Effective Date.

Facchini Employment Agreement will remain in effect until terminated by either party, unless the Company delivers advance written notice

12 unchanged sentences

for a period of 12 months after the termination of Dr.

Facchini’s employment with ENVB and prohibiting him from disclosure of confidential

Facchini’s employment with Enveric and prohibiting him from disclosure of confidential

information regarding the Company at any time.

As of December 31, 2021,

Facchini has been awarded an aggregate of 576,070 RSU’s, with all being unvested.

Vesting conditions include, without limitation,

continued employment or engagement with the Company, achievement of defined stock price levels, termination of the employee without cause,

resignation of the employee for good cause or change in control and there can be no assurances of any of these vesting conditions being

achieved and accordingly no assurances of any of these RSU’s vesting.

Furthermore, in the event that any or all of these RSU’s

Facchini will be eligible to convert any vested RSU’s into an equivalent number of shares of Common Stock on the first

day of the seventh month subsequent to either his termination of employment with the Company, or in the event of a change in control,

and provided compliance with all terms and conditions of the 2020 Plan, including, without limitation, the availability of shares approved

by the Company’s shareholders for such issuance.

Wilkins Employment Agreement

December 22, 2020, Dr.

Robert Wilkins entered into an employment agreement (the “Wilkins Employment Agreement”) with the

Company pursuant to which he became the Company’s Chief Medical Officer, effective as of the December 30, 2020 (the “Wilkins

Effective Date”).

Wilkins resigned from his position with the Company on November 30, 2021.

to the Wilkins Employment Agreement, Dr.

Wilkins served in the position of Chief Medical Officer of the Company.

Wilkins received

a base annual salary of $185,000.

Wilkins was also eligible to receive annual performance bonuses of up to 50% of his base salary

based on satisfaction of performance criteria/financial results, as determined by the board of directors of the Company in its sole discretion.

The Wilkins Employment Agreement provided for the awarding of 526,000 RSU’s to Dr.

Wilkins, with 175,333 of such RSU’s being

immediately vested and 350,667 RSU’s vesting upon the achievement of specific volume weighted average prices being achieved by

the Company’s Common Stock during specified measurement periods.

Wilkins was also eligible to receive additional equity awards,

as determined by the Company in its sole discretion.

The Wilkins Employment Agreement

also contains certain standard non-solicitation, non-disparagement and confidentiality requirements for Dr.

Wilkins resigned from his position with the Company on November 30, 2021.

As of the date of his resignation, Dr.

Wilkins had been awarded

an aggregate of 526,000 RSU’s, with 175,333 of such RSU’s being vested and 350,667 of such RSU’s being unvested, forfeited

and cancelled.

Wilkins will be eligible to convert these vested RSU’s into an equivalent number of shares of Common Stock on

the first day of the seventh month subsequent to the date of his resignation, provided compliance with all terms and conditions of the

2020 Plan, including, without limitation, the availability of shares approved by the Company’s shareholders for such issuance.

foregoing descriptions of employment agreements do not purport to be complete and is qualified entirely by reference to the full

text of the employment, with the Johnson Employment Agreement, the Tucker Employment Agreement, the Kanubaddi Employment

Agreement, the Facchini Employment Agreement and the Wilkins Employment Agreement attached hereto as Exhibits 10.17, 10.35,

10.18, 10.36, and 10.19 respectively, which in each case is incorporated by reference herein.

Contractor Agreement with David Johnson

Pharma entered into an independent contractor agreement with Mr.

Johnson on January 2, 2020.

Pursuant to the agreement, Mr.

Johnson provided

certain consulting services in connection with the Offer beginning on January 1, 2020 through the completion of the Offer.

was entitled to (i) $15,000 per month, and (ii) $100,000 on the closing date.

The agreement was terminable by Jay Pharma and Mr.

for any reason upon 30 days’ written notice.

of December 31, 2022, Dr.

Facchini has been awarded an aggregate of 11,522 RSU’s, of which 9,953 are unvested.

Vesting conditions

include, without limitation, continued employment or engagement with the Company, achievement of defined stock price levels, termination

of the employee without cause, resignation of the employee for good cause or change in control and there can be no assurances of any

of these vesting conditions being achieved and accordingly no assurances of any of these RSU’s vesting.

Furthermore, in the event

that any or all of these RSU’s do vest, Dr.

Facchini will be eligible to convert any vested RSU’s into an equivalent number

of shares of Common Stock on the first day of the seventh month subsequent to either his termination of employment with the Company,

or in the event of a change in control, and provided compliance with all terms and conditions of the 2020 Plan, including, without limitation,

the availability of shares approved by the Company’s shareholders for such issuance.

Equity Awards at Fiscal Year-End

Restricted Stock Units (1)

Restricted Stock Units

Stock Options

Equity Awards

Joseph Tucker

Ibrahim “Bob” Dagher

Avani Kanubaddi

Peter Facchini

Vested restricted stock units are eligible for conversion into an equivalent number of shares of

Common Stock on the first day of the seventh month subsequent to either the employee’s termination of employment with the Company,

or in the event of a change in control, and provided compliance with all terms and conditions of the 2020 Plan, including, without

limitation, the availability of shares approved by the Company’s shareholders for such issuance.

restricted stock units are eligible for conversion into an equivalent number of shares of Common Stock on the first day of the seventh

month subsequent to either the employee’s termination of employment with the Company, or in the event of a change in control,

and provided compliance with all terms and conditions of the 2020 Plan, including, without limitation, the availability of shares

approved by the Company’s shareholders for such issuance.

Payments Upon Termination of Employment or Change in Control

of our named executive officers has a contract in place for change in control payments.

The employment agreements

David Johnson, Dr.

employment agreements of Dr.

Joseph Tucker, Mr.

Avani Kanubaddi, and Dr.

Peter Facchini include provisions for severance pay equal to twelve

months of salary upon termination by the Company without cause, as defined in the employment agreements or termination by the employee

for good reason, as defined in the employment agreements.

Peter Facchini include provisions for severance

pay equal to twelve months of salary upon termination by the Company without cause, as defined in the employment agreements or termination

by the employee for good reason, as defined in the employment agreements.

of our named executive officers have also been granted RSU’s which are currently either fully vested or contain conditions providing

7 unchanged sentences

Other than set forth in the table and described more follow below, we did not pay any compensation, reimburse

any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other members of our board

of directors in 2021.

any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other

members of our board of directors in 2022.

Fees earned or paid in cash ($)

Other compensation

George Kegler

Marcus Schabacker

Bradley Thompson

of RSA’s equivalent to 15,957 shares of Common Stock, valued at $4.80 per share (the closing price per share on the date of

As of December 31, 2021, George Kegler had outstanding 15,957 RSA’s.

of RSA’s equivalent to 15,957 shares of Common Stock, valued at $4.80 per share (the closing price per share on the date of

As of December 31, 2021, Sol Mayer had outstanding 15,957 RSA’s.

of RSA’s equivalent to 15,957 shares of Common Stock, valued at $4.80 per share (the closing price per share on the date of

As of December 31, 2021, Marcus Schabacker had outstanding 15,957 RSA’s.

of RSA’s equivalent to 9,059 shares of Common Stock, valued at $3.58 per share (the closing price per share on the date of

As of December 31, 2021, Douglas Lind had outstanding 9,059 RSA’s.

of RSA’s equivalent to 12,953 shares of Common Stock, valued at $1.93 per share (the closing price per share on the date of

As of December 31, 2021, Bradley Thompson had outstanding 12,953 RSA’s.

Dave Johnson (Former Director)*

Sol Mayer (Former Director)

Bradley Thompson (Former Director)

Frank Pasqualone

*Dave Johnson served as our Executive Chairman through October 28, 2022.

Johnson’s “Other Compensation” is comprised of consulting

fees for services provided after he served on the Board of Directors, through December 31, 2022.

Biosciences, Inc.

2020 Long-Term Incentive Plan

The purpose of

the Enveric Biosciences, Inc.

2020 Long-Term Incentive Plan (the “2020 Plan”) is to enable us to remain competitive and innovative

and aid our ability to attract and retain the services of key employees, key contractors, and non-employee directors.

The 2020 Plan provides

for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock

units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and

which may be paid in cash or shares of our common stock.

The 2020 Plan provides flexibility to the Company with regard to its compensation

methods in order to adapt the compensation of its key employees, key contractors, and non-employee directors to a changing business environment,

after giving due consideration to competitive conditions and the impact of applicable tax laws.

Effective Date and Expiration .

The purpose of the Enveric Biosciences, Inc.

2020 Long-Term Incentive Plan (the “2020 Plan”) is to enable us to remain competitive

and innovative and aid our ability to attract and retain the services of key employees, key contractors, and non-employee directors.

The 2020 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted

stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination,

or in tandem, and which may be paid in cash or shares of our common stock.

The 2020 Plan provides flexibility to the Company with regard

to its compensation methods in order to adapt the compensation of its key employees, key contractors, and non-employee directors to a

changing business environment, after giving due consideration to competitive conditions and the impact of applicable tax laws.

Date and Expiration .

The 2020 Plan was adopted on December 31, 2020 pursuant to the Tender Agreement and was effective as of December

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made prior to the termination date may extend beyond that date in accordance with their terms.

Share Authorization .

to certain adjustments, as of January 1, 2022, the total number of shares of the Company’s common stock that have been reserved

and may be issued pursuant to awards under the Incentive Plan is 2,695,893 shares.

On May 3, 2022, our Board adopted the First Amendment (the “Plan Amendment”) to the Enveric Biosciences, Inc.

2020 Long-Term

Incentive Plan (the “Incentive Plan”) to (i) increase the aggregate number of shares available for the grant of awards by

146,083 shares to a total of 200,000 shares, and (ii) add an “evergreen” provision whereby the number of shares authorized

for issuance pursuant to awards under the Incentive Plan will be automatically increased on the first trading date immediately following

the date the Company issues any share of Common Stock (defined below) to any person or entity, to the extent necessary so that the number

of shares of the Company’s Common Stock authorized for issuance under the Incentive Plan will equal the greater of (x) 200,000

shares, and (y) 15% of the total number of shares of the Company’s Common Stock outstanding as of such issuance date.

Amendment was approved by the Company’s stockholders at a special meeting of the Company’s stockholders held on July 14,

Authorization .

Subject to certain adjustments, as of January 1, 2023, the total number of shares of the Company’s common stock

that have been reserved and may be issued pursuant to awards under the Incentive Plan is 153,513 shares.

Administration .

Plan shall be administered by the board of directors of the Company or such committee of the board as it designated by it to administer

the 2020 Plan (the “Committee”).

At any time that there is no Committee to administer the Plan, any reference to the Committee

is a reference to the board of directors of the Company.

The Committee will determine the persons to whom awards are to be made;

the type, size, and terms of awards;

The 2020 Plan shall be administered by the board of directors of the Company or such committee of the board as it designated by it to

administer the 2020 Plan (the “Committee”).

At any time that there is no Committee to administer the Plan, any reference

to the Committee is a reference to the board of directors of the Company.

The Committee will determine the persons to whom awards are

determine the type, size, and terms of awards;

interpret the 2020 Plan;

establish and revise rules and regulations relating to the 2020 Plan;

performance goals for awards and certify the extent of their achievement;

and make any other determinations that it believes are necessary

for the administration of the Plan.

The Committee may delegate certain of its duties to one or more officers of the Company as provided

establish and revise rules and regulations relating

to the 2020 Plan;

establish performance goals for awards and certify the extent of their achievement;

and make any other determinations

that it believes are necessary for the administration of the Plan.

The Committee may delegate certain of its duties to one or more officers

of the Company as provided in the Plan.

Eligibility .

(including any employee who is also a director or an officer), contractors, and non-employee directors of the Company or any of its subsidiaries,

whose judgment, initiative, and efforts contributed to or may be expected to contribute to its successful performance, are eligible to

participate in the 2020 Plan.

Stock Options .

The Committee

may grant either incentive stock options (“ISOs”) qualifying under Section 422 of the Internal Revenue Code of 1986, as amended

(the “Code”), or nonqualified stock options, provided that only employees of the Company and our subsidiaries (excluding subsidiaries

that are not corporations) are eligible to receive ISOs.

Stock options may not be granted with an option price less than 100% of the fair

market value of a share of common stock on the date the stock option is granted.

If an ISO is granted to an employee who owns or is deemed

to own more than 10% of the combined voting power of all classes of our stock (or of any parent or subsidiary), the option price shall

be at least 110% of the fair market value of a share of common stock on the date of grant.

The Committee will determine the terms of each

stock option at the time of grant, including, without limitation, the methods by or forms in which shares will be delivered to participants

or registered in their names.

The maximum term of each option, the times at which each option will be exercisable, and provisions requiring

forfeiture of unexercised options at or following termination of employment or service generally are fixed by the Committee, except that

the Committee may not grant stock options with a term exceeding ten (10) years or, in the case of an ISO granted to an employee who owns

or is deemed to own more than 10% of the combined voting power of all classes of our stock (or of any parent or subsidiary), a term exceeding

five (5) years.

Recipients of stock options may

pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company;

(ii) by delivering to us shares

of common stock (included restricted stock) already owned by the participant having a fair market value equal to the aggregate option

price and that the participant has not acquired from the Company within six months prior to the exercise date;

(iii) by delivering to

the Company or its designated agent an executed irrevocable option exercise form, together with irrevocable instructions from the participant

to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares purchased upon the exercise of the option or

to pledge such shares to the broker as collateral for a loan from the broker and to deliver to us the amount of sale or loan proceeds

necessary to pay the purchase price;

(iv) by requesting us to withhold the number of shares otherwise deliverable upon exercise of the

stock option by the number of shares having an aggregate fair market value equal to the aggregate option price at the time of exercise

( i.e., a cashless net exercise);

and (v) by any other form of valid consideration that is acceptable to the Committee in its

sole discretion.

Stock Appreciation Rights .

The Committee is authorized to grant stock appreciation rights (“SARs”) as a stand-alone award, or freestanding SARs, or in

conjunction with options granted under the 2020 Plan, or tandem SARs.

SARs entitle a participant to receive an amount equal to the excess

of the fair market value of a share of common stock on the date of exercise over the fair market value of a share of Company common stock

on the date of grant.

The grant price of a SAR cannot be less than 100% of the fair market value of a share of Company common stock on

the date of grant.

The Committee will determine the terms of each SAR at the time of the grant, including, without limitation, the methods

Employees (including any employee who is also a director or an officer), contractors, and non-employee directors of the Company or any

of its subsidiaries, whose judgment, initiative, and efforts contributed to or may be expected to contribute to its successful performance,

are eligible to participate in the 2020 Plan.

The Committee may grant either incentive stock options (“ISOs”) qualifying under Section 422 of the Internal

Revenue Code of 1986, as amended (the “Code”), or nonqualified stock options, provided that only employees of the Company

and our subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs.

Stock options may not be granted

with an option price less than 100% of the fair market value of a share of common stock on the date the stock option is granted.

ISO is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or

of any parent or subsidiary), the option price shall be at least 110% of the fair market value of a share of common stock on the date

The Committee will determine the terms of each stock option at the time of grant, including, without limitation, the methods

by or forms in which shares will be delivered to participants or registered in their names.

The maximum term of each SAR, the times at

which each SAR will be exercisable, and provisions requiring forfeiture of unexercised SARs at or following termination of employment

or service generally are fixed by the Committee, except that no freestanding SAR may have a term exceeding ten (10) years and no tandem

SAR may have a term exceeding the term of the option granted in conjunction with the tandem SAR.

Distributions to the recipient may be

made in common stock, cash, or a combination of both as determined by the Committee.

Restricted Stock and Restricted

The maximum term of each option, the times

at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment

or service generally are fixed by the Committee, except that the Committee may not grant stock options with a term exceeding ten (10)

years or, in the case of an ISO granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all

classes of our stock (or of any parent or subsidiary), a term exceeding five (5) years.

of stock options may pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company;

delivering to us shares of common stock (included restricted stock) already owned by the participant having a fair market value equal

to the aggregate option price and that the participant has not acquired from the Company within six months prior to the exercise date;

(iii) by delivering to the Company or its designated agent an executed irrevocable option exercise form, together with irrevocable instructions

from the participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares purchased upon the exercise

of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to us the amount of sale

or loan proceeds necessary to pay the purchase price;

(iv) by requesting us to withhold the number of shares otherwise deliverable upon

exercise of the stock option by the number of shares having an aggregate fair market value equal to the aggregate option price at the

time of exercise (i.e., a cashless net exercise);

and (v) by any other form of valid consideration that is acceptable to the Committee

in its sole discretion.

Appreciation Rights .

The Committee is authorized to grant stock appreciation rights (“SARs”) as a stand-alone award,

or freestanding SARs, or in conjunction with options granted under the 2020 Plan, or tandem SARs.

SARs entitle a participant to receive

an amount equal to the excess of the fair market value of a share of common stock on the date of exercise over the fair market value

of a share of Company common stock on the date of grant.

The grant price of a SAR cannot be less than 100% of the fair market value of

a share of Company common stock on the date of grant.

The Committee will determine the terms of each SAR at the time of the grant, including,

without limitation, the methods by or forms in which shares will be delivered to participants or registered in their names.

term of each SAR, the times at which each SAR will be exercisable, and provisions requiring forfeiture of unexercised SARs at or following

termination of employment or service generally are fixed by the Committee, except that no freestanding SAR may have a term exceeding

ten (10) years and no tandem SAR may have a term exceeding the term of the option granted in conjunction with the tandem SAR.

Distributions

to the recipient may be made in common stock, cash, or a combination of both as determined by the Committee.

Stock and Restricted Stock Units .

The Committee is authorized to grant restricted stock and restricted stock units.

Restricted stock consists of shares

of Company common stock that may not be sold, assigned, transferred, pledged, hypothecated, encumbered, or otherwise disposed of, and

that may be forfeited in the event of certain terminations of employment or service, prior to the end of a restricted period as specified

by the Committee.

Restricted stock units are the right to receive shares of common stock at a future date in accordance with the terms

of such grant upon the attainment of certain conditions specified by the Committee, which include a substantial risk of forfeiture and

restrictions on their sale or other transfer by the participant.

The Committee determines the eligible participants to whom, and the time

or times at which, grants of restricted stock or restricted stock units will be made;

the number of shares or units to be granted;

price to be paid, if any;

Restricted stock

consists of shares of Company common stock that may not be sold, assigned, transferred, pledged, hypothecated, encumbered, or otherwise

disposed of, and that may be forfeited in the event of certain terminations of employment or service, prior to the end of a restricted

period as specified by the Committee.

Restricted stock units are the right to receive shares of common stock at a future date in accordance

with the terms of such grant upon the attainment of certain conditions specified by the Committee, which include a substantial risk of

forfeiture and restrictions on their sale or other transfer by the participant.

The Committee determines the eligible participants to

whom, and the time or times at which, grants of restricted stock or restricted stock units will be made;

the number of shares or units

to be granted;

the price to be paid, if any;

the time or times within which the shares covered by such grants will be subject to forfeiture;

times at which the restrictions will terminate;

the time or times at which the restrictions will terminate;

and all other terms and conditions of the grants.

Restrictions or conditions could include,

but are not limited to, the attainment of performance goals (as described below), continuous service with the Company, the passage of

time, or other restrictions or conditions.

Except as otherwise provided in the 2020 Plan or the applicable award agreement, a participant

shall have, with respect to shares of restricted stock, all of the rights of a stockholder of the Company holding the class of common

stock that is the subject of the restricted stock, including, if applicable, the right to vote the common stock and the right to receive

any dividends thereon.

Dividend Equivalent Rights .

The Committee is authorized to grant a dividend equivalent right to any participant, either as a component of another award or as a separate

award, conferring on the participant the right to receive credits based on the cash dividends that would have been paid on the shares

of common stock specified in the award as if such shares were held by the participant.

The terms and conditions of the dividend equivalent

right shall be specified in the grant.

Dividend equivalents credited to the holder of a dividend equivalent right may be paid currently

or may be deemed to be reinvested in additional shares.

Any such reinvestment shall be at the fair market value at the time thereof.

dividend equivalent right may be settled in cash, shares, or a combination thereof.

Performance Awards .

Committee may grant performance awards payable at the end of a specified performance period in cash, shares of common stock, units, or

other rights based upon, payable in, or otherwise related to our common stock.

Payment will be contingent upon achieving pre-established

performance goals (as discussed below) by the end of the applicable performance period.

The Committee will determine the length of the

performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so

long as such provisions are not inconsistent with the terms of the 2020 Plan, and to the extent an award is subject to Section 409A of

the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance.

certain circumstances, the Committee may, in its discretion, determine that the amount payable with respect to certain performance awards

will be reduced from the maximum amount of any potential awards.

If the Committee determines, in its sole discretion, that the established

performance measures or objectives are no longer suitable because of a change in the Company’s business, operations, corporate structure,

or for other reasons that the Committee deems satisfactory, the Committee may modify the performance measures or objectives and/or the

performance period.

Performance Goals .

of restricted stock, restricted stock units, performance awards, and other awards under the 2020 Plan may be made subject to the attainment

of performance goals relating to one or more business criteria which shall consist of one or more or any combination of the following

criteria (“Performance Criteria”):

Restrictions or conditions

could include, but are not limited to, the attainment of performance goals (as described below), continuous service with the Company,

the passage of time, or other restrictions or conditions.

Except as otherwise provided in the 2020 Plan or the applicable award agreement,

a participant shall have, with respect to shares of restricted stock, all of the rights of a stockholder of the Company holding the class

of common stock that is the subject of the restricted stock, including, if applicable, the right to vote the common stock and the right

to receive any dividends thereon.

Equivalent Rights .

The Committee is authorized to grant a dividend equivalent right to any participant, either as a component of

another award or as a separate award, conferring on the participant the right to receive credits based on the cash dividends that would

have been paid on the shares of common stock specified in the award as if such shares were held by the participant.

The terms and conditions

of the dividend equivalent right shall be specified in the grant.

Dividend equivalents credited to the holder of a dividend equivalent

right may be paid currently or may be deemed to be reinvested in additional shares.

Any such reinvestment shall be at the fair market

value at the time thereof.

A dividend equivalent right may be settled in cash, shares, or a combination thereof.

The Committee may grant performance awards payable at the end of a specified performance period in cash, shares of common

stock, units, or other rights based upon, payable in, or otherwise related to our common stock.

Payment will be contingent upon achieving

pre-established performance goals (as discussed below) by the end of the applicable performance period.

The Committee will determine

the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment

will be made, so long as such provisions are not inconsistent with the terms of the 2020 Plan, and to the extent an award is subject

to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations

In certain circumstances, the Committee may, in its discretion, determine that the amount payable with respect to certain

performance awards will be reduced from the maximum amount of any potential awards.

If the Committee determines, in its sole discretion,

that the established performance measures or objectives are no longer suitable because of a change in the Company’s business, operations,

corporate structure, or for other reasons that the Committee deems satisfactory, the Committee may modify the performance measures or

objectives and/or the performance period.

Awards of restricted stock, restricted stock units, performance awards, and other awards under the 2020 Plan may be made subject

to the attainment of performance goals relating to one or more business criteria which shall consist of one or more or any combination

of the following criteria (“Performance Criteria”):

ratio of debt to debt plus equity;

net borrowing, credit

quality, or debt ratings;

net borrowing, credit quality, or debt ratings;

profit before tax;

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earnings before interest and taxes;

earnings before interest, taxes, depreciation,

and amortization;

earnings before

interest, taxes, depreciation, and amortization;

gross margin;

earnings per share (whether on a pre-tax, after-tax, operational, or other basis);

earnings per share (whether on a pre-tax, after-tax, operational, or other

operating earnings;

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economic value added;

ratio of operating earnings to capital spending or any other operating

ratio of operating earnings to capital

spending or any other operating ratios;

free cash flow;

net asset value per share;

the accomplishment of mergers, acquisitions, dispositions, public

offerings, or similar extraordinary business transactions;

the accomplishment of mergers,

acquisitions, dispositions, public offerings, or similar extraordinary business transactions;

sales growth;

price of the shares;

return on assets, equity, or stockholders’

on assets, equity, or stockholders’ equity;

market share;

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or total return to stockholders.

Any Performance Criteria may be

used to measure our performance as a whole or of any of our business units and may be measured relative to a peer group or index.

Performance Criteria may include or exclude (i) events that are of an unusual nature or indicate infrequency of occurrence, (ii) gains

or losses on the disposition of a business;

Any Performance Criteria may be used to measure our performance as a whole or of any of our business units and may be measured relative

to a peer group or index.

Any Performance Criteria may include or exclude (i) events that are of an unusual nature or indicate infrequency

of occurrence, (ii) gains or losses on the disposition of a business;

(iii) changes in tax or accounting regulations or laws;

(iv) the effect of a merger or acquisition,

as identified in the Company’s quarterly and annual earnings releases;

or (v) other similar occurrences.

In all other respects,

Performance Criteria shall be calculated in accordance with the Company’s financial statements, under GAAP, or under a methodology

established by the Committee prior to the issuance of an award, which is consistently applied and identified in the Company’s audited

financial statements, including in notes thereto, or the Compensation Discussion and Analysis section of the Company’s annual report.

Other Awards .

The Committee

may grant other forms of awards, based upon, payable in, or that otherwise relate to, in whole or in part, shares of our common stock,

if the Committee determines that such other form of award is consistent with the purpose and restrictions of the 2020 Plan.

and conditions of such other form of award shall be specified in the grant.

Such other awards may be granted for no cash consideration,

for such minimum consideration as may be required by applicable law, or for such other consideration as may be specified in the grant.

Vesting, Forfeiture and Recoupment,

The Committee, in its sole discretion, may determine that an award will be immediately vested, in whole or in part, or

that all or any portion may not be vested until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more

specified events, subject in any case to the terms of the 2020 Plan.

If the Committee imposes conditions upon vesting, then, subsequent

to the date of grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the award may be vested.

The Committee may impose on any

award at the time of grant or thereafter, such additional terms and conditions as the Committee determines, including terms requiring

forfeiture of awards in the event of a participant’s termination of service.

The Committee will specify the circumstances on which

performance awards may be forfeited in the event of a termination of service by a participant prior to the end of a performance period

or settlement of awards.

Except as otherwise determined by the Committee, restricted stock will be forfeited upon a participant’s

termination of service during the applicable restriction period.

In addition, we may recoup all or any portion of any shares or cash paid

to a participant in connection with any award in the event of a restatement of the Company’s financial statements as set forth in

the Company’s clawback policy, if any, as such policy may be approved or modified by board of directors of the Company from time

Awards granted under the 2020

Plan generally are not assignable or transferable except by will or by the laws of descent and distribution, except that the Committee

may, in its discretion and pursuant to the terms of an award agreement, permit transfers of nonqualified stock options or SARs to (i)

the spouse (or former spouse), children, or grandchildren of the participant (“Immediate Family Members”);

(ii) a trust or

trusts for the exclusive benefit of such Immediate Family Members;

(iii) a partnership in which the only partners are (1) such Immediate

Family Members and/or (2) entities which are controlled by the participant and/or his or her Immediate Family Members;

(iv) an entity

exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision;

or (v) a split interest trust or

pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be no consideration

for any such transfer, (y) the applicable award agreement pursuant to which such nonqualified stock options or SARs are granted must be

approved by the Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred nonqualified

stock options or SARs shall be prohibited except those by will or the laws of descent and distribution.

Adjustments Upon Changes in

Capitalization .

In the event that any dividend or other distribution (whether in the form of cash, shares of Company common stock,

other securities or other property), recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation,

split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of shares of common stock or other securities of the

Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company, or other similar

corporate transaction or event affects the fair value of an award, then the Committee shall adjust any or all of the following so that

the fair value of the award immediately after the transaction or event is equal to the fair value of the award immediately prior to the

transaction or event:

(i) the number of shares and type of common stock (or the securities or property) which thereafter may be made the

subject of awards;

(ii) the number of shares and type of common stock (or other securities or property) subject to outstanding awards;

(iii) the number of shares and type of common stock (or other securities or property) specified as the annual per-participant limitation

under the 2020 Plan;

(iv) the option price of each outstanding stock option;

(v) the amount, if any, we pay for forfeited shares in accordance

with the terms of the 2020 Plan;

and (vi) the number of or exercise price of shares then subject to outstanding SARs previously granted

and unexercised under the 2020 Plan, to the end that the same proportion of our issued and outstanding shares of common stock in each

instance shall remain subject to exercise at the same aggregate exercise price;

provided, however, that the number of shares of common

stock (or other securities or property) subject to any award shall always be a whole number.

Notwithstanding the foregoing, no such adjustment

shall be made or authorized to the extent that such adjustment would cause the 2020 Plan or any stock option to violate Section 422 of

the Code or Section 409A of the Code.

All such adjustments must be made in accordance with the rules of any securities exchange, stock

market, or stock quotation system to which we are subject.

Amendment or Discontinuance

effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases;

or (v) other similar

In all other respects, Performance Criteria shall be calculated in accordance with the Company’s financial statements,

under GAAP, or under a methodology established by the Committee prior to the issuance of an award, which is consistently applied and

identified in the Company’s audited financial statements, including in notes thereto, or the Compensation Discussion and Analysis

section of the Company’s annual report.

The Committee may grant other forms of awards, based upon, payable in, or that otherwise relate to, in whole or in part,

shares of our common stock, if the Committee determines that such other form of award is consistent with the purpose and restrictions

of the 2020 Plan.

The Company’s board of directors may, at any time and from time to time, without the consent of participants,

alter, amend, revise, suspend, or discontinue the 2020 Plan in whole or in part;

provided, however, that (i) no amendment that requires

stockholder approval in order for the 2020 Plan and any awards under the 2020 Plan to continue to comply with Sections 421 and 422 of

the Code (including any successors to such sections or other applicable law) or any applicable requirements of any securities exchange

or inter-dealer quotation system on which our stock is listed or traded, shall be effective unless such amendment is approved by the requisite

vote of our stockholders entitled to vote on the amendment;

and (ii) unless required by law, no action by our board of directors regarding

amendment or discontinuance of the 2020 Plan may adversely affect any rights of any participants or obligations of the Company to any

participants with respect to any outstanding awards under the 2020 Plan without the consent of the affected participant.

The terms and conditions of such other form of award shall be specified in the grant.

Such other awards may be granted

for no cash consideration, for such minimum consideration as may be required by applicable law, or for such other consideration as may

be specified in the grant.

Forfeiture and Recoupment, Assignment .

The Committee, in its sole discretion, may determine that an award will be immediately vested,

in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its date of grant, or until the

occurrence of one or more specified events, subject in any case to the terms of the 2020 Plan.

If the Committee imposes conditions upon

vesting, then, subsequent to the date of grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion

of the award may be vested.

Committee may impose on any award at the time of grant or thereafter, such additional terms and conditions as the Committee determines,

including terms requiring forfeiture of awards in the event of a participant’s termination of service.

The Committee will specify

the circumstances on which performance awards may be forfeited in the event of a termination of service by a participant prior to the

end of a performance period or settlement of awards.

Except as otherwise determined by the Committee, restricted stock will be forfeited

upon a participant’s termination of service during the applicable restriction period.

In addition, we may recoup all or any portion

of any shares or cash paid to a participant in connection with any award in the event of a restatement of the Company’s financial

statements as set forth in the Company’s clawback policy, if any, as such policy may be approved or modified by board of directors

of the Company from time to time.

granted under the 2020 Plan generally are not assignable or transferable except by will or by the laws of descent and distribution, except

that the Committee may, in its discretion and pursuant to the terms of an award agreement, permit transfers of nonqualified stock options

or SARs to (i) the spouse (or former spouse), children, or grandchildren of the participant (“Immediate Family Members”);

(ii) a trust or trusts for the exclusive benefit of such Immediate Family Members;

(iii) a partnership in which the only partners are

(1) such Immediate Family Members and/or (2) entities which are controlled by the participant and/or his or her Immediate Family Members;

(iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision;

or (v) a split interest

trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be

no consideration for any such transfer, (y) the applicable award agreement pursuant to which such nonqualified stock options or SARs

are granted must be approved by the Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred

nonqualified stock options or SARs shall be prohibited except those by will or the laws of descent and distribution.

Upon Changes in Capitalization .

In the event that any dividend or other distribution (whether in the form of cash, shares of Company

common stock, other securities or other property), recapitalization, stock split, reverse stock split, rights offering, reorganization,

merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of shares of common stock or

other securities of the Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company,

or other similar corporate transaction or event affects the fair value of an award, then the Committee shall adjust any or all of the

following so that the fair value of the award immediately after the transaction or event is equal to the fair value of the award immediately

prior to the transaction or event:

(i) the number of shares and type of common stock (or the securities or property) which thereafter

may be made the subject of awards;

(ii) the number of shares and type of common stock (or other securities or property) subject to outstanding

(iii) the number of shares and type of common stock (or other securities or property) specified as the annual per-participant

limitation under the 2020 Plan;

(iv) the option price of each outstanding stock option;

(v) the amount, if any, we pay for forfeited

shares in accordance with the terms of the 2020 Plan;

and (vi) the number of or exercise price of shares then subject to outstanding

SARs previously granted and unexercised under the 2020 Plan, to the end that the same proportion of our issued and outstanding shares

of common stock in each instance shall remain subject to exercise at the same aggregate exercise price;

provided, however, that the number

of shares of common stock (or other securities or property) subject to any award shall always be a whole number.

Notwithstanding the

foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the 2020 Plan or any stock option

to violate Section 422 of the Code or Section 409A of the Code.

All such adjustments must be made in accordance with the rules of any

securities exchange, stock market, or stock quotation system to which we are subject.

or Discontinuance of the 2020 Plan .

The Company’s board of directors may, at any time and from time to time, without the consent

of participants, alter, amend, revise, suspend, or discontinue the 2020 Plan in whole or in part;

provided, however, that (i) no amendment

that requires stockholder approval in order for the 2020 Plan and any awards under the 2020 Plan to continue to comply with Sections

421 and 422 of the Code (including any successors to such sections or other applicable law) or any applicable requirements of any securities

exchange or inter-dealer quotation system on which our stock is listed or traded, shall be effective unless such amendment is approved

by the requisite vote of our stockholders entitled to vote on the amendment;

and (ii) unless required by law, no action by our board

of directors regarding amendment or discontinuance of the 2020 Plan may adversely affect any rights of any participants or obligations

of the Company to any participants with respect to any outstanding awards under the 2020 Plan without the consent of the affected participant.

Compensation Plan Information

2 unchanged sentences

Plan category

Number of securities to be issued upon

exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights 3

Number of securities remaining for issuance under equity compensation plans (excluding securities reflected in the first column)

Equity compensation plans approved by security holders 1

Equity compensation plans not approved by security holders

Consists of the 2020 Plan

Represents 124,100 shares of Common Stock to be issued pursuant

to the exercise of outstanding options, 32,099 shares of Common Stock to be issued pursuant to vested restricted stock awards, 51,509

shares of Common stock to be issued pursuant to unvested restricted stock awards, 2,785,820 vested restricted stock units representing

2,785,820 shares of Common Stock, 3,100,613 unvested restricted stock units representing 3,100,613 shares of Common Stock.

can be no assurances of the achievement of vesting conditions related to those unvested restricted stock awards and unvested restrict

Represents the weighted-average exercise price of outstanding options

and is calculated without taking into account the shares of common stock subject to outstanding restricted stock awards and outstanding

restricted stock units.

As of the end of the fiscal year ended December 31, 2021, there

were 5,886,433 shares of common stock underlying outstanding restricted stock units, of which (i) 2,785,820 shares are underlying

vested restricted stock units and issuable, subject to certain conditions for settlement, which include termination of employment

or the event of a change in control, and of which 297,635 shares may not be issued until 2020 Plan, which currently has no shares

available for issuance and is short of shares to cover all of the outstanding restricted stock units, is amended to increase the

number of shares authorized for issuance of awards under the 2020 Plan upon approval by our stockholders and (ii) 3,100,613 shares

are issuable upon the vesting of such restricted stock units, subject to achievement of vesting conditions, either termination of

employment with the Company, or a change in control, and is further subject to the increase in the number of shares authorized for

issuance of awards under the 2020 Plan upon approval by our stockholders.

of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average

exercise price of outstanding options, warrants and rights (3)

of securities remaining for issuance under equity compensation plans (excluding securities reflected in the first column)

Equity compensation

plans approved by security holders (1)

of the 2020 Plan

26,730 shares of Common Stock to be issued pursuant to the exercise of outstanding options, 708 shares of Common Stock to be issued

pursuant to vested restricted stock awards, 62,492 vested restricted stock units representing 62,492 shares of Common Stock,

64,053 unvested restricted stock units representing 64,053 shares of Common Stock.

There can be no assurances of the

achievement of vesting conditions related to those unvested restricted stock awards and unvested restrict stock units.

the weighted-average grant date fair value of outstanding options and is calculated without taking into account the shares of common stock

subject to outstanding restricted stock awards and outstanding restricted stock units.

of the end of the fiscal year ended December 31, 2022, there were 153,513 shares of common stock available under the Enveric

Biosciences, Inc.

2020 Long-Term Incentive Plan (the “Incentive Plan”).

On May 3, 2022, our Board adopted the First

Amendment (the “Plan Amendment”) to the Enveric Biosciences, Inc.

2020 Long-Term Incentive Plan (the “Incentive

Plan”) to (i) increase the aggregate number of shares available for the grant of awards by 146,083 shares to a total of

200,000 shares, and (ii) add an “evergreen” provision whereby the number of shares authorized for issuance pursuant to

awards under the Incentive Plan will be automatically increased on the first trading date immediately following the date the Company

issues any share of Common Stock (defined below) to any person or entity, to the extent necessary so that the number of shares of

the Company’s Common Stock authorized for issuance under the Incentive Plan will equal the greater of (x) 200,000 shares, and

(y) 15% of the total number of shares of the Company’s Common Stock outstanding as of such issuance date.

The Plan Amendment

was approved by the Company’s stockholders at a special meeting of the Company’s stockholders held on July 14, 2022.

As of December 31, 2022, there are 311,740 shares of Common Stock authorized under the Plan.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

following table sets forth the names and number of common shares beneficially owned as of March 29, 2022 (including shares of

common stock issuable within sixty (60) days of that date upon exercise or conversion of securities that entitle the holders thereof

to obtain common stock upon exercise or conversion in accordance with the terms thereof) by (i) those persons who are known to us to

be the beneficial owner(s) of more than five percent (5%) of our common stock , (ii) each of our directors and named executive officers

and (iii) all of our directors and executive officers as a group.

Except as otherwise indicated, the beneficial owners listed in the

table below possess the sole voting and dispositive power in regard to such shares and have an address of c/o Enveric Biosciences, Inc.,

4851 Tamiami Trail N, Suite 200, Naples, FL 34103.

As of March 29, 2022, there were 52,585,120 shares of common stock of

the Company outstanding.

1,568,220 (1)

Facchini, PhD

Schabacker, M.D., PhD

Thompson, PhD

directors and officers as a group of nine (9) persons

5,152,322 (8)

following table sets forth the names and number of common shares beneficially owned as of March 30, 2023, (including shares of common

stock issuable within sixty (60) days of that date upon exercise or conversion of securities that entitle the holders thereof to obtain

common stock upon exercise or conversion in accordance with the terms thereof) by (i) those persons who are known to us to be the beneficial

owner(s) of more than five percent (5%) of our common stock , (ii) each of our directors and named executive officers and (iii) all of

our directors and executive officers as a group.

Except as otherwise indicated, the beneficial owners listed in the table below possess

the sole voting and dispositive power in regard to such shares and have an address of c/o Enveric Biosciences, Inc., 4851 Tamiami Trail

N, Suite 200, Naples, FL 34103.

As of March 31, 2023, there were 2,078,271 shares of common stock of the Company outstanding.

Number of Shares of Common Stock Beneficially Owned

Percentage of Shares Outstanding

Directors and Officers

Joseph Tucker, PhD

Avani Kanubaddi

Peter Facchini, PhD

George Kegler

Frank Pasqualone

Douglas Lind, M.D.

Marcus Schabacker, M.D., PhD

All directors and officers as a group of nine (9) persons

Represents less than 1%

Includes 691,080 shares of Common Stock, 199,350 vested options

to purchase Common Stock, warrants to purchase 677,790 shares of Common Stock.

13,822 shares of Common Stock, 3,987 vested options to purchase Common Stock, warrants

to purchase 13,290 shares of Common Stock, and 2,219 vested restricted stock units.

Excludes unvested restricted stock units equivalent

to 14,156 shares of Common Stock.

Includes vested restricted stock units equivalent to 789,484 shares

of Common Stock.

Excludes unvested restricted stock units equivalent to 1,127,787 shares of Common Stock.

Includes 616,656 shares of Common Stock, 99,675 vested options to

purchase Common Stock, warrants to purchase 613,998 shares of Common Stock.

Excludes unvested restricted stock units equivalent to

576,070 shares of Common Stock.

Includes vested restricted stock units equivalent to 1,347,722 shares

of Common Stock

Includes vested restricted stock awards equivalent to 15,957 shares

of Common Stock.

Includes vested restricted stock awards equivalent to 9,059 shares

of Common Stock

Includes vested options to purchase 53,160 shares of Common Stock

and vested restricted stock awards equivalent to 6,477 shares of Common Stock.

Excludes unvested restricted stock awards equivalent

to 6,476 shares of Common Stock.

Includes 1,307,736 shares of Common Stock, vested restricted stock

units equivalent to 2,237,206 shares of Common Stock, vested restricted stock awards equivalent to 63,407 shares of Common Stock,

vested options to purchase 352,185 shares of Common Stock and warrants to purchase 1,291,788 shares of Common Stock.

vested restricted stock units equivalent to 15,790 shares of Common Stock.

Excludes unvested

restricted stock units equivalent to 4,217,033 shares of Common Stock and unvested restricted stock awards equivalent to 6,476 shares

of Common Stock.

restricted stock units equivalent to 22,556 shares of Common Stock.

12,333 shares of Common Stock, 1,994 vested options to purchase Common Stock, warrants

to purchase 12,280 shares of Common Stock, and 1,569 vested restricted stock units.

Excludes unvested restricted stock units equivalent

to 9,953 shares of Common Stock.

(4) Includes vested restricted stock awards equivalent to 320 shares of Common

(5) Includes vested restricted stock awards equivalent to 136 shares of Common Stock

(6) Includes 26,155 shares of Common Stock, vested restricted stock units equivalent

to 19,578 shares of Common Stock, vested restricted stock awards equivalent to 776 shares of Common Stock, vested options to purchase

5,981 shares of Common Stock and warrants to purchase 25,570 shares of Common Stock.

Excludes unvested restricted stock units equivalent

to 46,665 shares of Common Stock.

Certain Relationships and Related Transactions and Director Independence

5 unchanged sentences

indirect material interest, excluding compensation arrangements described above.

agreement with MagicMed Industries Inc.

May 24, 2021, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C.

corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company (“HoldCo”),

Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of HoldCo

(“Purchaser”), and MagicMed Industries Inc., a corporation existing under the laws of the Province of British Columbia (“MagicMed”),

pursuant to which, among other things, the Company, indirectly through Purchaser, acquired all of the outstanding securities of MagicMed

in exchange for securities of the Company by way of an amalgamation under the British Columbia Business Corporations Act, upon the terms

and conditions set forth in the Amalgamation Agreement, such that, upon completion of the Amalgamation (as defined herein), the amalgamated

corporation (“Amalco”) will be an indirect wholly-owned subsidiary of the Company.

The Amalgamation was completed on September

shareholders on the date of Amalgamation Agreement included Joseph Tucker, Peter Facchini and Jillian Hagel, all of whom became

employees of the Company as of the September 16, 2021 completion of the Amalgamation.

At the time of and prior to entering into

the Amalgamation Agreement, MagicMed, Joseph Tucker, Peter Facchini and Jillian Hagel were not related parties of the

and Consulting Agreements

Contractor Agreement with Barry Kostiner

Pharma and Barry Kostiner entered into an independent contractor agreement on January 10, 2020 (the “January Agreement”).

Company and David Johnson, the Company’s former Executive Chairman, entered into a consulting agreement on January 1, 2023 (the

“January Agreement”).

Pursuant to the January Agreement, Mr.

Kostiner agreed to provide consulting services to Jay Pharma effective December 1, 2019.

Agreement was terminated effective April 30, 2020.

Kostiner earned $10,000 per month over the term of the January Agreement.

and Assumption Agreements

January 10, 2020, Jay Pharma entered into two assignment and assumption agreements, pursuant to which, upon the satisfaction of all closing

conditions to the Offer, affiliates of Tikkun would assign to Jay Pharma all of such affiliates’ in-licensed and developed rights

based on certain Amended and Restated Sublicense Agreements, effective January 12, 2018, pursuant to which Jay Pharma entered into two

in-licensing U.S.

and rest of world rights to the limited pharmaceutical business (including cancer) from TOP and TOCI, respectively,

each as amended by a First Amendment entered January 10, 2020, with:

TOP and Tikkun regarding all of Tikkun’s (i) in-licensed rights and obligations to commercialize pharmaceutical products related

to GVHD under the relevant Sublicense in the U.S.

and (ii) certain skincare business and all of Tikkun’s rights related thereto

as of the January 10, 2020 effective date.

Jay Pharma agreed to issue 8,288,006 common shares of Jay Pharma to Tikkun in exchange for

these rights;

TOCI and Tikkun regarding all of Tikkun’s in-licensed rights and obligations to commercialize pharmaceutical products related to

GVHD under the relevant sublicense anywhere in the world outside the U.S.

Jay Pharma agreed to issue 2,072,001 common shares of Jay Pharma

to Tikkun in exchange for these rights.

August 12, 2020, Jay Pharma and the applicable Tikkun affiliates entered into the First Amendment to the Tikkun Agreements, pursuant

to which all references to the Original Amalgamation Agreement and the amalgamation were revised to be references to the Tender Agreement

and the Offer, as applicable.

October 2, 2020, Jay Pharma and the applicable Tikkun affiliates entered into the Second Amendment to the Tikkun Agreements, pursuant

to which the effective date of the transactions was revised to occur as of October 2, 2020.

Pharma, TO LLC and TOH entered into a license agreement dated on January 10, 2020, pursuant to which Jay Pharma would acquire certain

in-licensed and owned intellectual property rights related to the cannabis products in the United States (presently excluding the state

of New York) from TO LLC and TOH, each of which is an affiliate of TO Holdings, in exchange for royalty payments of (i) four percent

(4.0%) of net sales of OTC cancer products made via consumer channels;

(ii) five percent (5.0%) of net sales of beauty products made

via consumer channels;

and (iii) three percent (3.0%) of net sales of OTC cancer products made via professional channels, along with

a minimum net royalty payment starting in January 1, 2022 and progressively increasing up to a cap of $400,000 maximum each year for

the first 10 years, then $600,000 maximum each year for the next 5 years, and an annual maximum cap of $750,000 each year thereafter

during the term of the agreement.

The licensed intellectual property rights relate to beauty products and OTC cancer products, and branding

rights related thereto.

The beauty products include any topical or transdermal cannabis-containing or cannabis-derived (including hemp-based)

skin care or body care beauty products, and the OTC cancer products means any cancer-related products, in each case excluding those regulated

as a drug, medicine, or controlled substance by the FDA or any other relevant governmental authority, such as the USDA.

August 12, 2020, Jay Pharma, TO LLC and TOH entered into the First Amendment to the License Agreement, pursuant to which all references

to the Original Amalgamation Agreement and the amalgamation were revised to be references to the Tender Agreement and the Offer, as applicable.

October 2, 2020, Jay Pharma, TO LLC and TOH entered into the Second Amendment to the License Agreement, pursuant to which the effective

date of the transactions was revised to occur as of October 2, 2020.

the signing of the Original Amalgamation Agreement, Jay Pharma issued the Original Note to Alpha, dated as of January 10, 2020, pursuant

to which Alpha loaned $1,500,000 to Jay Pharma in connection with, and as a condition to, the Original Amalgamation Agreement.

Note was amended on June 23, 2020 (as discussed further below) to reflect an additional investment of $500,000, resulting in a total

principal amount of $2,000,000 (the “Second Note Amendment”).

The Original Note was further amended on August 12, 2020 (as

discussed further below), to account for the termination of the Original Amalgamation Agreement and the change in the structure of the

transaction from an amalgamation to a stock-for-stock exchange offer (the “Third Note Amendment”).

The terms described in

the following paragraphs reflect the terms of the Original Note as amended by the Second Note Amendment and the Third Note Amendment.

The Note was secured, pursuant to the Security Agreement, by all of the assets of Jay Pharma.

The Note carried an annual interest rate

of 7%, calculated daily.

the closing of the Offer, the Note was converted into the right to receive 2,473,848 common shares of Jay Pharma and warrants to purchase

2,333,970 common shares of Jay Pharma at an exercise price of $1.03 per share immediately prior to the Offer.

In connection with the

Offer, such common shares and warrants of Jay Pharma acquired by Alpha upon conversion of the Note were converted into the right to receive

(i) 547,278 shares of Series B Preferred Stock that are convertible into up to 547,278 shares of Common Stock, after giving effect to

the Reverse Stock Split, and (ii) warrants to purchase up to 516,333 shares of Common Stock at an exercise price of $4.64 per share,

after giving effect to the Reverse Stock Split,

Pharma was obligated by certain covenants set forth in the Note, including, but not limited to, the obligation (i) to provide certain

financial information, (ii) to use the proceeds in a specifically agreed to manner, (iii) to not incur any new indebtedness other than

as allowed under the terms of the Note, (iv) to not enter into any business, except those in which Jay Pharma is already engaged or that

are reasonably related thereto, (v) to not make any distributions to its shareholders or creditors, (vi) to not make any changes to its

capital structure, authorize or issue any equity interest of Jay Pharma, and (vii) to not take or suffer any act not permitted under

the Tender Agreement.

of default under the Note included, but were not limited to, (i) breaches of representations and warranties made by Jay Pharma, in the

Note or the Security Agreement, (ii) breaches of covenants made by Jay Pharma, (iii) bankruptcy and insolvency of Jay Pharma, and (iv)

the failure to consummate the Offer by a certain date.

Note and the Security Agreement also provided certain customary representations and warranties of Jay Pharma.

If the Tender Agreement

had been terminated without Alpha’s prior written consent and without meeting certain other conditions in the Tender Agreement,

Jay Pharma would have been required to repay the entire outstanding principal balance of the Note plus all accrued and unpaid interest

thereon and any other sums payable to Alpha directly in connection with the Note.

Note Amendment

May 6, 2020, Jay Pharma and Alpha entered into the First Note Amendment.

The First Note Amendment revised the maturity date of the Note.

Prior to the First Note Amendment, the maturity date of the Note was the earlier of (i) July 6, 2020 and (ii) an event of default that

accelerates the maturity of the Note.

Following the First Note Amendment, the maturity date of the Note was revised to be the earlier

of (i) September 30, 2020 and (ii) an event of default that accelerates the maturity of the Note.

The First Note Amendment also revised

the event of default regarding a failure of the amalgamation to be consummated by March 31, 2020 to extend such date to September 30,

Note Amendment

June 23, 2020, Jay Pharma and Alpha entered into the Second Note Amendment.

The Second Note Amendment revised the principal amount of

the Note from $1,500,000 to $2,000,000, which was deemed advanced as the of date of the Second Note Amendment.

The rights and securities

granted to Alpha under the terms of the Note were extended to the additional $500,000 advance contemplated by the Second Note Amendment

pursuant to the terms of the Second Note Amendment.

Note Amendment

August 12, 2020, Jay Pharma and Alpha entered into the Third Note Amendment.

The Third Note Amendment extended the maturity date to be

the earlier of (a) January 1, 2021 and (b) an event of default that accelerates the maturity of the Note.

The Third Note Amendment also

revised the Note to account for the change in structure from an amalgamation to a stock-for-stock exchange offer.

As a result, references

to the Original Amalgamation Agreement and the amalgamation were revised to be references to the Tender Agreement and the Offer.

Third Note Amendment also revised the event of default regarding a failure of the amalgamation to be consummation by March 31, 2020 to

be an event of default if the Offer was not completed by January 1, 2021.

the completion of the Offer, the Company provided Alpha with the Series B Warrants to purchase the number of pre-reverse stock split

shares of common stock of the Company equal to the product of (i) 8,100,000 and (ii) the Exchange Ratio of 0.8849 at an exercise price

of $0.01 to Alpha, as set forth in, and pursuant to the terms of, the Series B Common Stock Purchase Warrant.

The Series B Warrants had

a five-year term beginning on the 90th day after the later of the last day of the lock-up/leak-out period.

If Alpha chooses to exercise

the Series B Warrants, Alpha may elect, at its own option, to exercise the Series B Warrants on a cashless basis.

Alpha may not exercise

the Series B Warrants to the extent such exercise would result in Alpha and its affiliates owning more than 9.99% of the Company.

number of shares issuable under the terms of the Series B Common Stock Purchase Warrant are adjustable for stock dividends and splits.

Additionally, Alpha shall have the right to participate in subsequent rights offerings or pro rata distributions with respect to the

equity of the Company or any fundamental transaction involving the Company as more fully described in the Series B Common Stock Purchase

the signing of the Original Amalgamation Agreement, Alpha entered into the Original Alpha Securities Purchase Agreement, pursuant to

which Alpha agreed, subject to the terms and conditions thereof, to purchase common shares of Jay Pharma and Jay Pharma Series A Warrants

to purchase Jay Pharma’s common shares for an aggregate total purchase price of $3,500,000.

The Alpha Securities Purchase Agreement

was amended on August 12, 2020 (as discussed further below), to account for the termination of the Original Amalgamation Agreement and

the change in the structure of the transaction from an amalgamation to a stock-for-stock exchange offer (the “Third Alpha SPA Amendment”).

The terms described in the following paragraphs reflect the terms of the Alpha Securities Purchase Agreement as amended by the Third

Alpha SPA Amendment.

closing of the Alpha Investment is conditioned upon the satisfaction or waiver of the conditions set forth in the Tender Agreement.

obligations of Alpha under the Alpha Securities Purchase Agreement in connection with the closing of the Alpha Investment are also subject

to the condition that, from the date of the Alpha Securities Purchase Agreement to the date of closing of the Alpha Investment, trading

in Ameri’s common stock shall not have been suspended by the SEC or Nasdaq, and, at any time prior to the closing date of

the Alpha Investment, trading in securities generally as reported by Bloomberg L.P.

shall not have been suspended or limited, or minimum

prices shall not have been established on securities whose trades are reported by such service, or on any trading market, nor shall a

banking moratorium have been declared either by the U.S.

or New York State authorities.

Alpha Securities Purchase Agreement provides certain customary covenants, conditions, representations and warranties, and other agreements

by and between Jay Pharma and Alpha.

In addition, Jay Pharma has agreed to use commercially reasonable efforts to complete the Offer,

and as a condition to closing of the Offer, to cause Ameri to assume all of Jay Pharma’s obligations under the warrants and the

Securities Purchase Agreement.

to the terms of the Alpha Securities Purchase Agreement, from the closing date of the Offer until 120 days thereafter, Jay Pharma agreed

to not permit or allow Ameri or any of its subsidiaries to issue, enter into agreement to issue, or announce the issuance or proposed

issuance of any shares of Ameri common stock.

Additionally, for a period of 18 months following the closing date of the Offer, Ameri

is prohibited from effecting or entering into an agreement to effect any issuance by Ameri or any of its subsidiaries of their respective

common stock or common stock equivalent involving a variable rate transaction.

A “variable rate transaction” means a transaction

in which Ameri (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include

the right to receive additional shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price

that is based upon and/or varies with the trading prices of or quotations for the shares of common stock at any time after the initial

issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some

future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly

or indirectly related to the business of Ameri or the market for the common stock, or (ii) enters into, or effects a transaction under,

any agreement, including, but not limited to, an equity line of credit, whereby Ameri may issue securities at a future determined price.

Additionally, from the closing date of the Offer until such time as Alpha holds less than one-fifth of the shares issued in connection

with the Alpha Investment, Alpha will hold certain anti-dilution rights outlined in the Alpha Securities Purchase Agreement.

the closing of the Alpha Investment under the Alpha Securities Purchase Agreement immediately prior to the Offer, Alpha received approximately

3,500,954 common shares of Jay Pharma and Jay Pharma Series A Warrants to purchase 3,500,954 common shares of Jay Pharma at an exercise

price of $1.03 per common share (the “Alpha Investment Securities”).

In connection with the Offer, such common shares and

warrants of Jay Pharma acquired by Alpha in the Alpha Investment were converted into, as applicable, the right to receive (i) 774,499

shares of Series B Preferred Stock that are convertible into up to 774,499 shares of Common Stock, after giving effect to the Reverse

Stock Split, and (ii) warrants to purchase up to 774,499 shares of Common Stock at an exercise price of $4.64 per share, after giving

effect to the Reverse Stock Split.

The Company warrants will be immediately exercisable and will expire on the fifth anniversary of the

original issuance date.

The exercise price and number of shares of Company common stock issuable upon exercise is subject to appropriate

adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Company common stock and the

exercise price.

The Series B Preferred Stock of the Company and the warrants to purchase Company common stock to be issued to Alpha are

convertible or exercisable, as applicable, subject to a 9.99% beneficial ownership blocker.

Amendment to Alpha Securities Purchase Agreement

June 23, 2020, Jay Pharma and Alpha entered into the Second Note Amendment.

The Second Note Amendment also amended the Alpha Securities

Purchase Agreement to reduce the amount of the investment in Jay Pharma’s common shares and Jay Pharma Series A Warrants from $3,500,000

to $3,000,000.

Amendment to Alpha Securities Purchase Agreement

August 12, 2020, Jay Pharma and Alpha entered into a second amendment to the Alpha Securities Purchase Agreement (the “Second Alpha

SPA Amendment”).

The Second Alpha SPA Amendment revised the formula regarding the securities to be issued to Alpha in connection

with the closing of the amalgamation to match the formula set forth in the Original Amalgamation Agreement.

Additionally, the Second

Alpha SPA amended the termination rights under the Alpha Securities Purchase Agreement to extend the termination date from July 7, 2020

to September 30, 2020.

Amendment to Alpha Securities Purchase Agreement

August 12, 2020, Jay Pharma and Alpha entered into a third amendment to the Alpha Securities Purchase Agreement (the “Third Alpha

SPA Amendment”).

The Third Alpha SPA Amendment revised the references to the Original Amalgamation Agreement and amalgamation to

be references to the Tender Agreement and the Offer, as applicable, in order to account for the change in transaction structure from

an amalgamation to a stock-for-stock exchange offer.

Additionally, the Third Alpha SPA Amendment amended the termination rights under

the Alpha Securities Purchase Agreement to extend the termination date from September 30, 2020 to January 1, 2021.

noted above, in connection with conversion of the Note and the closing of the Alpha Investment, which occurred immediately prior to the

closing of the Offer, Alpha received warrants to purchase common shares of Jay Pharma.

Further, as noted above, in connection with the

Offer and pursuant to the terms of the Tender Agreement and the Alpha Exchange Agreement, these warrants were exchanged for Company warrants

to purchase pre-reverse stock split shares of Company common stock equal to the number of common shares of Jay Pharma underlying such

outstanding Jay Pharma warrants multiplied by the Exchange Ratio, with the exercise price of such converted warrants determined by dividing

the exercise price of the Jay Pharma warrant by the Exchange Ratio.

The Company warrants will be immediately exercisable and will expire

on the fifth anniversary of the original issuance date.

The exercise price and number of shares of Company common stock issuable upon

exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting

Jay Pharma common stock and the exercise price.

at the time Alpha exercises its Company common stock warrants, a registration statement registering the issuance of the shares of Company

common stock underlying the Company common stock warrants under the Securities Act is not then available for the issuance of such shares,

then in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate

exercise price, Alpha may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Company

common stock determined according to a formula set forth in the Company common stock warrants.

(together with its affiliates) may not exercise any portion of the Company common stock warrant to the extent that Alpha would own more

than 9.99% of the outstanding Company common stock immediately after exercise;

provided, however, that upon notice to the Company, Alpha

may increase or decrease the beneficial ownership limitation, provided that in no event shall the beneficial ownership limitation exceed

9.99% and any increase in the beneficial ownership limitation will not be effective until 61 days following notice of such increase from

Alpha to the Company.

the Company, at any time while the Company common stock warrant is outstanding, sells or grants any option to purchase, or sells or grants

any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition)

any Company common stock (or common stock equivalents), at an effective price per share less than the exercise price then in effect,

then simultaneously with the consummation (or, if earlier, the announcement) of each such dilutive issuance, the exercise price will

be reduced to equal the exercise price then in effect, subject to certain exceptions, which includes issuance of securities issued pursuant

to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company and not for the primary

purpose of raising capital.

the event of a fundamental transaction, as described in the common warrants and generally including any reorganization, recapitalization

or reclassification of the Company’s common stock, the sale, transfer or other disposition of all or substantially all of Company’s

properties or assets, the Company’s consolidation or merger with or into another person, the acquisition of more than 50% of the

Company’s outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented

by the Company’s outstanding common stock, Alpha will be entitled to receive upon exercise of such warrants the kind and amount

of securities, cash or other property that Alpha would have received had they exercised the Company’s common stock warrants immediately

prior to such fundamental transaction.

Share Purchase Agreement

connection with the Offer, Jay Pharma entered into a series of assignment and assumption agreements with a third party, Tikkun Pharma,

(“Tikkun”), pursuant to which Tikkun assigned to Jay Pharma all of Tikkun’s (i) rights to certain skin care treatment

assets and (ii) intellectual property rights to certain formulations for the development of therapeutic candidates for the prevention,

management and treatment of graft versus host disease (GVHD) in exchange for an aggregate of 10,360,007 common shares of Jay Pharma,

which were issued in October 2020.

Alpha required additional shares of the Company, at no or a nominal cost, for Alpha to consummate the Alpha Bridge Loan and the Alpha

Investment at the planned valuation, Alpha entered into an agreement with Tikkun pursuant to which, immediately following such assignment,

but prior to the Offer, Tikkun sold 7,774,463 of these common shares of Jay Pharma to Alpha for the nominal aggregate purchase price

of $10.00 (the “Alpha Nominal Shares”), leaving Tikkun with 2,585,544 common shares of Jay Pharma (the “Tikkun Shares”).

In connection with the Offer, the Tikkun Shares were converted into the right to receive 571,987 shares of common stock of the Company,

after giving effect to the Reverse Stock Split and the Alpha Nominal Shares were converted into the right to receive 1,719,906 shares

of Series B Preferred Stock of the Company that are convertible into up to 1,719,906 shares of common stock of the Company after giving

effect to the Reverse Stock Split.

December Investment

December 4, 2020, Jay Pharma and Alpha executed a securities purchase agreement whereby Alpha purchased an additional 1,000,000 common

shares of Jay Pharma and warrants to purchase 500,000 common shares of Jay Pharma at an exercise price of $0.30 per share for an aggregate

purchase price of $300,000 (the “Alpha December Investment”).

In connection with the Offer, such shares were exchanged for

221,225 shares of Common Stock, and such warrants were exchanged for warrants to purchase 110,613 shares of common stock of the Company

at $1.36 per share.

Exchange Agreements

to the terms of the Tender Agreement, prior to the closing of the Offer, the Company entered into exchange agreements with each of the

holders of Jay Pharma options (the “Option Exchange Agreements”).

Pursuant to the terms of the Option Exchange Agreements,

each outstanding Jay Pharma option was exchanged for Company options to purchase a number of shares of Company common stock equal to

the Exchange Ratio on substantially the same terms as those contained in the stock option plan of the Company, and each such Jay Pharma

option was cancelled.

The exercise price for each share of Company common stock underlying a Company option was equal to the exercise

price per share of Jay Pharma common stock under the Jay Pharma option in effect immediately prior to the completion of the Offer, as

adjusted to reflect the reverse stock split and Exchange Ratio and applicable currency exchange ratio.

Jay Pharma and Ameri intended

that the exchange of all Jay Pharma options for Resulting Issuer options would occur on a rollover basis pursuant to subsection 7(1.4)

of the Tax Act and that any relevant adjustments to the exercise price of the Company options would be made to reflect this intention,

and that the foregoing treatment of Jay Pharma options was fair and reasonable in light of the circumstances of the transaction.

Exchange Agreements

to the terms of the Tender Agreement, prior to the closing of the Offer, the Company entered into exchange agreements with the holders

of Jay Pharma warrants (the “Warrant Exchange Agreements”).

Pursuant to the terms of the Warrant Exchange Agreements, each

outstanding Jay Pharma warrant was exchanged for Company warrants to purchase the number of shares of Company common stock equal to the

Exchange Ratio on substantially economically equivalent terms and each such Jay Pharma warrant shall be cancelled.

The exercise price

for each share of Company common stock underlying a Company warrant will be equal to the exercise price per share of Jay Pharma common

stock under the Jay Pharma warrant in effect immediately prior to the completion of the Offer, as adjusted to reflect the proposed reverse

stock split and Exchange Ratio and the applicable currency exchange ratio.

Exchange Agreement

to the terms of the Tender Agreement, prior to the closing of the Offer, the Company entered into an exchange agreement with Alpha (the

“Alpha Exchange Agreement” and, together with the Option Exchange Agreements and Warrant Exchange Agreements, the “Securities

Exchange Agreements”).

Pursuant to the terms of the Alpha Exchange Agreement, the Jay Note Securities and the Alpha Investment

Securities were exchanged for (i) the number of shares of Series B Preferred Stock convertible into 3,262,907 shares of Company common

stock, (ii) warrants to purchase 1,290,831 shares of common stock of the Company at $4.64 per share, and (iii) warrants to purchase up

to 110,613 shares of common stock of the Company at an exercise price of $1.36 per share, in each case, after giving effect to the reverse

The Series B Preferred Stock of the Company and the warrants to purchase Company common stock issued to Alpha are convertible

or exercisable, as applicable, subject to a 9.99% beneficial ownership blocker.

Relationships

with Tikkun and Jay Pharma

Eisenberg was both a board member and shareholder of Tikkun and a board member of Jay Pharma.

His role with both companies might have

created a conflict of interest in connection with Jay Pharma’s strategic relationship with Tikkun.

Farkas was both a board member and shareholder of Tikkun and a board member of Jay Pharma.

His role with both companies might have created

a conflict of interest in connection with Jay Pharma’s strategic relationship with Tikkun.

Gertner was both a board member of Tikkun and a board member of Jay Pharma.

His role with both companies might have created a conflict

of interest in connection with Jay Pharma’s strategic relationship with Tikkun.

Stefansky was both a board member of Tikkun and a board member and an executive officer of Jay Pharma.

His role with both companies might

have created a conflict of interest in connection with Jay Pharma’s strategic relationship with Tikkun.

On May 6, 2020, Mr.

resigned as an executive officer and director of Jay Pharma.

order to avoid any potential conflicts of interest amongst the Jay Pharma board of directors in light of the transactions described above,

on January 7, 2020, each of Solomon Eisenberg and Barry Farkas, both of whom were board members and shareholders of Tikkun, resigned

from the Jay Pharma board.

In addition, Lorne Gertner, who also served on the board of both Jay Pharma and Tikkun, agreed to abstain

from any votes regarding the Original Amalgamation Agreement, the Side Transactions and all matters related to such transactions.

Conforti Letter Agreement

January 6, 2020, Yaron Conforti and Jay Pharma entered into a letter agreement pursuant to which Jay Pharma agreed to pay Yaron Conforti

a sum of $83,409, which constituted amounts owed to Yaron Conforti by Jay Pharma, with such sum to be paid in the following manner:

$10,000 paid in cash upon execution of the Original Amalgamation Agreement with Ameri, (b) $5,000 to be paid in cash upon the closing

the transactions contemplated by the Original Amalgamation Agreement, and (c) the remaining $68,409 paid through the issuance of 118,117

shares of common stock of Jay Pharma.

In exchange for the payment structured as described above, Yaron Conforti released Jay Pharma from

any claims or obligations related to the $83,409 sum.

In July 2020, Jay Pharma agreed to adjust the per share price of $0.8849, of the

Jay Pharma common shares issued under the previous letter to $0.22.

Accordingly, Mr.

Conforti was awarded 193,169 additional Jay Pharma

common shares pursuant to a letter agreement.

Johnson agreed to provide consulting services to the

Company effective January 1, 2023.

Johnson earns $23,833 per month ($286,000 per annum) over the term of the January Agreement.

The Company will also reimburse the Mr.

Johnson for such reasonable and necessary expenses incurred by him in carrying out his

services under the January Agreement.

The January Agreement will remain in effect until the earlier of (i) its termination pursuant

to the terms of the January Agreement or (ii) the effectiveness of the spin-off of Akos from the Company.

During the term of the

January Agreement, Mr.

Johnson will provide services as requested by the Company’s Board of Directors.

employment is terminated without cause prior to the completion of the Akos spin-off, Company shall pay Mr.

Johnson a termination fee

of $286,000 over the 12 months following the termination of his employment.

Principal Accountant Fees and Services

May 2015, the Board selected Ram Associates as its independent accountant to audit the Company’s financial statements.

The following

is a summary of the fees billed by Ram Associates for professional services rendered for the fiscal years ended December 31, 2020 and

Ram Associates was dismissed by the Company on January 12, 2021, at which point the Board selected Marcum LLP.

The Company selected Marcum LLP as its independent accountant on January 12, 2021.

Marcum LLP was dismissed

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At that time the Company appointed Friedman LLP as its independent accountant.

Ended December 31,

Audit-related

In September 2022, Marcum LLP acquired

certain assets of Friedman LLP, at which point the Company’s auditor became Marcum LLP.

Year Ended December 31,

Audit-related fees

All other fees

fees consist of fees billed for services rendered for the audit of our financial statements and review of our financial statements.

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Financial Statements:

Reports of Independent Registered Accounting Firm (PCAOB Firm ID :

Friedman LLP # 711 ;

Marcum LLP # 688 )

Balance Sheets

Statements of Operations and Comprehensive Loss

Statements of Changes in Shareholders’ Equity (Deficit)

Statements of Cash Flows

to Consolidated Financial Statements

of Independent Registered Accounting Firm (PCAOB Firm ID :

Marcum LLP # 688 and Friedman LLP # 711 )

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Statements of Changes in Temporary Equity and Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Financial Statement Schedules:

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(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Commission on November 18, 2021)

Certificate of Designation of the Series C Preferred Stock of the Company, dated May 4, 2022 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A, filed with the Securities and Exchange Commission on May 4, 2022, File No.

Certificate of Amendment of Certificate of Designation of the Series C Preferred Stock of the Company, dated May 17, 2022 (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 8-A/A, filed with the Securities and Exchange Commission on May 17, 2022, File No.

Certificate of Amendment of Amended and Restated Certificate of Incorporation of Enveric Biosciences, Inc.

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Commission on July 14, 2022)

Description of Securities*

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Form of Warrant (issued in connection with February 2021 Registered Direct Offering) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on February 11, 2021)

of Series B Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form

10-K filed with the Commission on April 1, 2021)

Form of Series B Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Form of MagicMed Warrant Certificate (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2021)

Form of Common Stock Purchase Warrant (in connection with February 2022 Offering) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on February 15, 2022)

Secured Promissory Note, dated January 10, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

1 to Secured Promissory Note, dated May 6, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

2 to Secured Promissory Note, dated June 23, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

3 to Secured Promissory Note, dated August 12, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Securities Purchase Agreement, dated January 10, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

2 to Securities Purchase Agreement, dated July 2, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

3 to Securities Purchase Agreement, dated August 12, 2020, by and between Alpha Capital Anstalt and Jay Pharma Inc.* (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Form of RD Pre-Funded Warrant (in connection with July 2022 Offering) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of PIPE Pre-Funded Warrant (in connection with July 2022 Offering) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of RD Preferred Investment Option (in connection with July 2022 Offering) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of PIPE Preferred Investment Option (in connection with July 2022 Offering) (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of Wainwright Warrant (in connection with July 2022 Offering) (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Employment Agreement between Kevin Coveney and the Company, effective March 13, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on February 28, 2023)

Form of Securities Purchase Agreement (entered into in connection with the May 5, 2022 Private Placement) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on May 11, 2022)

Certificate of the Designations, Preferences and Rights of Akos Series A Convertible Preferred Stock (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Commission on May 11, 2022)

Form of Registration Rights Agreement (entered into in connection with the May 5, 2022 Private Placement) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the Commission on May 11, 2022)

Form of Warrant (entered into in connection with the May 5, 2022 Private Placement) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Commission on May 11, 2022)

Form of Warrant Amendment (in connection with the July 2022 Offerings) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

First Amendment to the Enveric Biosciences, Inc.

2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on July 14, 2022)

Form of Warrant Amendment (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of Securities Purchase Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of Securities Purchase Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of Registration Rights Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Assignment and Assumption Agreement (Non-U.S.

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Subsidiaries*

Consent of independent registered

public accountant – Friedman LLP.*

Consent of independent registered public accountant – Marcum LLP.*

Consent of independent registered public accountant – Friedman LLP.*

Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer*

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Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 of Principal Executive Officer, Principal Financial and Accounting Officer**

Inline XBRL Instance Document*

Inline XBRL Taxonomy Extension Schema*

Inline XBRL Taxonomy Extension Calculation Linkbase Document*

Inline XBRL Taxonomy Extension Definition Linkbase Document*

Inline XBRL Taxonomy Extension Labels Linkbase Document*

Inline XBRL Taxonomy Extension Presentation Linkbase Document*

Cover Page Interactive Data File (embedded within the Inline XBRL document)

management contract.

XBRL Instance Document*

XBRL Taxonomy Extension Schema*

XBRL Taxonomy Extension Calculation Linkbase Document*

XBRL Taxonomy Extension Definition Linkbase Document*

XBRL Taxonomy Extension Labels Linkbase Document*

XBRL Taxonomy Extension Presentation Linkbase Document*

Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith.

Furnished herewith.

Management contract or compensatory plan or arrangement.

to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized.

BIOSCIENCES, INC.

/s/ Joseph Tucker

Executive Officer

Executive Officer)

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Joseph Tucker

Executive Officer

Executive Officer)

Kevin Coveney

Financial Officer

Financial and Accounting Officer)

George Kegler

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

Enveric Biosciences, Inc.

the Shareholders and Board of Directors of

Biosciences, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of Enveric Biosciences, Inc.

(the Company) as of December 31, 2021, and the

related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations

and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States

(the “Company”) as of December 31,

2022, the related consolidated statements operations and comprehensive loss, changes in temporary equity and shareholders’ equity

and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles

generally accepted in the United States of America.

Paragraph – Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described

in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds

to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The financial statements do not

include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

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(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

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estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provide

We believe that our audit provides

a reasonable basis for our opinion.

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matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Audit Matter Description

discussed in Notes 2 and 3 to the financial statements, the Company completed the acquisition

of MagicMed Industries, Inc.

for a purchase price of $39 million on September 16, 2021.

Company accounted for the transaction under the acquisition method of accounting for business

combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities

assumed based on their respective fair values and the excess purchase price over the fair

value of net assets acquired was recorded as goodwill.

Intangible assets acquired primarily

related to patents and in process research and development (“IPR&D”).

estimated the fair value of the intangible assets using the discounted cash flow model valuation

determination of fair value requires significant judgement by management and third party valuation specialists to develop significant

estimates and assumptions used in cash flow models.

Auditing management’s judgements used in the discounted cash flow model

including the forecasts of revenue and operating expense growth rates, royalty rates and discount rates involved especially challenging

auditor judgement due to the nature and extent of audit effort required.

These significant assumptions are forward looking and could

be affected by future economic and market conditions.

We Addressed the Matter in Our Audit

test the valuation and accounting of the acquisition, our audit procedures included, among others, read the amalgamation agreement

and assessed the reasonableness and appropriateness of managements discounted cash flow models by comparing the projections to certain

industry data.

With the assistance of our fair value specialists we evaluated the reasonableness of the valuation methodology and

discount rate by testing the source information underlying the determination for the discount rate and tested the mathematical accuracy

of the calculation and developed a range of independent estimates and compared those to the discount rate selected by management.

of Long-lived Assets

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for recoverability and the determination of fair value of the relevant assets.

The required high degree of auditor judgement and

increased extent of effort, including the need to involve fair value specialists, was required when performing audit procedures to

evaluate the reasonableness of management’s assumptions related to impairment of goodwill and long lived assets.

The high degree of auditor judgement and increased

extent of effort, including the need to involve valuation specialists, was required to evaluate the reasonableness of management’s

analysis related to the impairment of goodwill and long-lived assets.

We Addressed the Matter in Our Audit

obtained an understanding and evaluated the procedures over management’s impairment review process.

We evaluated the impact

of changes in management’s forecasts from the September 16, 2021 initial measurement date to December 31, 2021.

With the assistance

of our fair value specialists we evaluated the reasonableness of the valuation methodology and discount rate by testing the source

information underlying the determination for the discount rate and tested the mathematical accuracy of the calculation and developed

a range of independent estimates and compared those to the discount rate selected by management.

have served as the Company’s auditor since 2021.

We evaluated the reasonableness

of management’s inputs inclusive of forecasts and discount rates used in the impairment analysis.

With the assistance of our

valuation specialists, we evaluated the reasonableness of the valuation methodology, tested the mathematical accuracy of the calculation

and developed a range of independent estimates to determine reasonableness of valuation conclusions.

Non-controlling Interest and Derivative Liability

Audit Matter Description

discussed in Notes 1, 2 and 8 to the financial statements, the Company announced plans to

transfer and spin-off its cannabinoid clinical development pipeline assets to Akos Biosciences,

(“Akos”) a majority owned subsidiary of the Company.

Akos entered into a

Securities Purchase Agreement, pursuant to which Akos agreed to sell to an investor 1,000

shares of Akos’ Series A Convertible Preferred Stock for $1.0 million during the year

ended December 31, 2022.

If the Spin-Off does not occur, the Company has guaranteed the redeemable

non-controlling interest associated with the put right option as defined in the Series A

Convertible Preferred Stock agreement.

Fees associated with the spin-off including, but not

limited to, placement agent fees, are contingent upon the spin-off occurring.

the accounting conclusions for the issuance of the Series A Convertible Preferred Stock discussed above was challenging because of

the complex provisions affecting classification and required extensive audit effort.

The accounting for the Series A Convertible

Preferred Stock involved an assessment of the particular features in the agreement and Certificate of Designation and the impact

of those features on the accounting and classification of the Series A Convertible Preferred Stock.

The determination of fair value

requires significant judgement by management and third-party valuation specialists to develop significant estimates and assumptions

including the probability of the spin off occurring.

Auditing management’s judgements involved especially challenging auditor

judgement due to the nature and extent of audit effort required.

We Addressed the Matter in Our Audit

obtained an understanding and evaluated the procedures over management’s technical accounting analysis and valuation process.

We inspected the governing agreements for the transaction and evaluated the application of the Company’s technical accounting

analyses including evaluating the terms and management’s conclusion on the interpretation and application of the relevant accounting

With the assistance of our valuation specialists, we evaluated the reasonableness of the valuation methodology used,

we evaluated the reasonableness of the inputs subject to assumptions and verified the accuracy and completeness of those inputs to

the underlying transaction data utilized in the valuation of the preferred stock and derivative liability;

we performed sensitivity

analyses of the significant assumptions used in the valuation model to evaluate the change in fair value resulting from changes in

the significant assumptions to determine reasonableness of the valuation conclusions.

have served as the Company’s auditor since 2021 (such date takes into account the acquisition of certain assets of Friedman LLP

by Marcum LLP effective September 1, 2022) .

Hanover, New Jersey

Third Avenue 11 th Floor

York, NY 10017

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and Board of Directors of

Biosciences, Inc.

and Subsidiary

the Stockholders and Board of Directors of Enveric Biosciences, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of Enveric Biosciences, Inc.

and Subsidiary (the “Company”) as of

December 31, 2020, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (deficit)

and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2020 and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles

generally accepted in the United States of America.

(the Company) as of December 31, 2021, and the

related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year then ended,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations

and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States

financial statements are the responsibility of the Company’s management.

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We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

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a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Value of Common Stock Used in the Purchase of Intangible Assets

discussed in Note 7 to the financial statements, on October 2, 2020, the Company purchased skincare assets for an aggregate purchase

price of $1,944,689, which included cash consideration of $44,413 and the issuance of common stock, which was valued at $1,900,546.

the time of the transaction, the Company was a private company.

valuation of private company common stock requires significant judgment in weighting the various indicators of fair value.

The principals

and considerations to be applied include:

of value are those comparable transactions between informed, willing, buyers and sellers;

transaction must be orderly and not in a distressed situation;

the weight of observable inputs, where possible;

issued as the indicator of value must be similar or identical to the securities being valued;

of comparable transactions must be close to the valuation date

Consideration

as to whether the valuation of the technology is more indicative of the fair value of the assets acquired in comparison to the consideration

to the significance of the intangible assets to the Company’s financial statements and the inherent judgment necessary to estimate

the valuation of the common stock, we determined that the fair value of common stock used in the purchase of intangible assets was a

critical audit matter, which required significant auditor judgment and specialized skill and knowledge.

the Critical Audit Matter Was Addressed in the Audit

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated

financial statements.

These procedures included, but were not limited to, the following:

evaluated management’s process for the selection of the valuation methodology and the methods and significant assumptions used

by management;

the assistance of our valuation specialists, we evaluated the reasonableness of the valuation methodology used;

evaluated the reasonableness of the inputs subject to assumptions and verified the accuracy and completeness of those inputs to the

underlying transaction data utilized in the valuation of the common stock and verified;

performed sensitivity analyses of the significant assumptions used in the valuation model to evaluate the change in fair value resulting

from changes in the significant assumptions.

have served as the Company’s auditor since 2018.

BIOSCIENCES, INC AND SUBSIDIARIES

have served as the Company’s auditor from 2021 through 2022.

Hanover, New Jersey

BIOSCIENCES, INC.

AND SUBSIDIARIES

BALANCE SHEETS

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current assets

and equipment, net

of use operating lease asset

Liabilities and Shareholders’

portion of right-of-use operating lease obligation

Property and equipment,

Right-of-use operating

Intangible assets, net

LIABILITIES, TEMPORARY EQUITY, AND SHAREHOLDERS’

Accounts payable

Accrued liabilities

Current portion of right-of-use

operating lease obligation

Investment option liability

current liabilities

portion of right-of-use operating lease obligation

tax liability

Non-current liabilities:

Non-current portion of

right-of-use operating lease obligation

Deferred tax liability

non-current liabilities

Commitments and contingencies

Temporary equity

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 December 31, 2022 and 2021, respectively

non-controlling interest

temporary equity

Shareholders’ equity

stock, $ 0.01 par value, 20,000,000 shares authorized;

Series B preferred stock,

value, 3,600,000 shares

authorized, — and 3,275,407 shares

issued and outstanding as of December 31, 2021 and 2020, respectively

stock, $ 0.01 par

value, 100,000,000 shares

authorized, 32,578,475 and

10,095,109 shares

issued and outstanding as of December 31, 2021 and 2020, respectively

paid-in capital

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 December 31, 2022 and 2021, respectively

Common stock, $ 0.01 par

value, 100,000,000 shares authorized, 2,078,271 and 651,921 shares issued and outstanding as of December 31, 2022 and 2021, respectively

Additional paid-in capital

Accumulated deficit

( 79,207,786 )

2 unchanged sentences

shareholders’ equity

liabilities and shareholders’ equity

BIOSCIENCES, INC AND SUBSIDIARIES

liabilities, temporary equity, and shareholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

the Years Ended December 31,

and development costs

and administrative expenses

of intangible assets and goodwill

Operating expenses

administrative

Research and development

Impairment of intangible

assets and goodwill

and amortization

operating expenses

from operations

( 64,623,420 )

Loss from operations

( 27,415,106 )

income (expense)

in fair value of warrant liabilities

( 64,623,420 )

Other income (expense)

Inducement expense

( 1,125,291 )

Net loss before

Change in fair value of

warrant liabilities

Change in fair value of

investment option liability

Change in fair value of

derivative liability

Net loss before income taxes

( 19,957,393 )

( 56,431,701 )

loss after income tax benefit

Income tax benefit

( 18,471,333 )

( 48,976,896 )

comprehensive gain (loss)

currency translation gain (loss)

Less preferred dividends

attributable to non-controlling interest

deemed dividends attributable to accretion of embedded derivative at redemption value

Net loss attributable to

( 18,800,323 )

( 48,976,896 )

Other comprehensive loss

Foreign currency translation

Comprehensive

1 unchanged sentence

$ ( 48,826,421 )

loss per share – basic and diluted

average shares outstanding, basic and diluted

BIOSCIENCES, INC AND SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

Net loss per share -

basic and diluted

Weighted average shares outstanding, basic

accompanying notes are an integral part of these consolidated financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY

Income (Loss)

B Preferred Stock

Comprehensive

as of January 1, 2020

Other Comprehensive

Income (Loss)

Balance at January 1, 2021

$ ( 11,759,557 )

$ ( 181,277 )

2020 private placement

of Tikkun Pharma IP

financing and conversion of Alpha Note, including Palladium shares

of warrants for common shares

of related party advance and notes payable

stock issued for accounts payable

issued in conjunction with notes payable

conversion feature issued with note payable

stock issued in conjunction with note payable modification

of Series B preferred stock to common stock

with Ameri Holdings, Inc

currency translation loss

January 2021 registered

direct offering, net of offering costs

February 2021 registered

direct offering, net of offering costs

Consideration paid pursuant

to amalgamation agreement

Exercise of warrants

Exercise of options

Induced conversion of stock

options into restricted stock awards

Stock-based compensation

Common stock issued in

lieu of cash for services

Common stock issued pursuant

to exercise of warrant put rights

Conversion of Series B

preferred shares

( 3,275,407 )

Foreign exchange translation

( 48,976,896 )

as of December 31, 2020

( 48,976,896 )

Balance at December

$ ( 60,736,453 )

2021 registered direct offering

Consideration

paid pursuant to amalgamation agreement

options exercise

conversion of warrants and options to Common Stock

stock issued in lieu of cash for services

stock issued pursuant to exercise of warrant put rights

of Series B preferred shares

accompanying notes are an integral part of these consolidated financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY

C Redeemable Preferred Stock

Non-controlling Interest

Other Comprehensive

Shareholders’

Balance at January 1, 2022

$ ( 60,736,453 )

February 2022 registered

direct offering, net of offering costs

Stock-based compensation

Conversion of RSUs into

common shares

Redeemable non-controlling

interest, net of $ 402,000 embedded derivative and net of issuance costs of $ 41,962

Issuance of redeemable

Series C preferred stock

Preferred dividends attributable

to redeemable non-controlling interest

Accretion of embedded derivative

to redemption value

Conversion of RSAs into

common shares

July 2022 registered direct

offering, PIPE offering, modification of warrants and exercise of pre-funded warrants, net of offering costs

Issuance of rounded shares

as a result of the reverse stock split

Redemption of Series C

preferred stock

Foreign exchange translation

( 18,471,333 )

currency translation gain

as of December 31, 2021

Balance at December

$ ( 79,207,786 )

BIOSCIENCES, INC AND SUBSIDIARIES

STATEMENTS OF CASH FLOW

$ ( 536,734 )

accompanying notes are an integral part of these consolidated financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

the Years Ended December 31,

flows from operating activities:

Cash Flows From Operating

$ ( 18,471,333 )

$ ( 48,976,896 )

to reconcile net loss to cash used in operating activities

in fair value of warrant liability

Adjustments to reconcile

net loss to cash used in operating activities

Change in fair value of

warrant liability

( 4,315,236 )

issued in lieu of cash for services

of debt discount

of right-of-use operating lease asset

of intangible assets and goodwill

of intangible assets

income tax benefit

( 9,327,326 )

Change in fair value of

investment option liability

( 3,472,726 )

Change in fair value of

derivative liability

Stock-based compensation

Stock issued in lieu of

cash for services

Impairment of intangible

assets and goodwill

Non-cash income tax benefit

( 1,504,302 )

( 7,454,805 )

Inducement expense

Amortization of right-of-use

Amortization of intangible

Depreciation expense

in operating assets and liabilities:

expenses and other current assets

payable, and accrued liabilities

Right-of-use operating

lease liability

Prepaid expenses and other

current assets

Accounts payable and accrued

operating lease liability

cash used in operating activities

2 unchanged sentences

Flows From Investing Activities:

of license agreements

Purchases of property and

Purchase of Diverse Bio

license agreement

accretive acquisition of MagicMed

cash (used in) provided by investing activities

flows from financing activities:

from convertible notes payable

from note payable, net of offering costs

and reverse merger proceeds

from sales of common stock and warrants, net

from exercise of cash warrants

of note payable

Cash Flows From Financing

Proceeds from sale of common

stock, warrants, and investment options, net of offering costs

Proceeds from the sale

of redeemable non-controlling interest, net of offering costs (see Note 8)

from warrant exercises, net of fees

cash provided by financing activities

of foreign exchange rate on cash

increase in cash

– beginning of the year

– end of the year

Supplemental disclosure of non-cash transactions:

Right-of-use assets obtained in exchange for lease

non-cash financing activities:

of Common Stock pursuant to MagicMed amalgamation

tax liability incurred due to MagicMed amalgamation

of preferred stock to common stock

value of warrants issued

conversion feature issued with note payable

issued in conjunction with notes payable

stock issued for accounts payable

stock issued in conjunction with note payable modification

of related party advances and notes payable into common stock

stock issued for skincare license

Supplemental cash financing activities:

paid for interest

AND LIQUIDITY AND OTHER UNCERTAINTIES

Effect of foreign exchange

Net increase in cash

Cash at beginning of

Cash at end of year

Supplemental disclosure

of cash and non-cash transactions:

Cash paid for interest

Income taxes paid

Investment options issued

in conjunction with common stock issuance

Modification of warrants as part of share

capital raise

Warrants issued in conjunction

with common stock issuance

Issuance of embedded

Preferred dividends

attributable to redeemable non-controlling interest

Accretion of embedded

derivative to redemption value

Issuance of Common Stock

pursuant to MagicMed amalgamation

Deferred tax liability

incurred due to MagicMed amalgamation

Conversion of preferred

stock to common stock

Fair value of warrants issued

Right-of-use assets

obtained in exchange for lease liabilities

accompanying notes are an integral part of these consolidated financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS AND LIQUIDITY AND OTHER UNCERTAINTIES

of Operations

Biosciences, Inc.

(“Enveric Biosciences, Inc.” “Enveric” or the “Company”) (formerly known as Ameri

Holdings, Inc.) (“Ameri”) is a pharmaceutical company developing innovative, evidence-based cannabinoid medicines.

(“Enveric Biosciences, Inc.” “Enveric” or the “Company”) is a pharmaceutical company developing innovative, evidence-based cannabinoid medicines.

office of the Company is located in Naples, Florida.

January 10, 2020, the Company entered into an Amalgamation Agreement (as amended on May 6, 2020), (the “Jay Pharma Amalgamation

Agreement”) with Jay Pharma Merger Sub, Inc., a company organized under the laws of Canada and a wholly owned subsidiary of the

Company (“Merger Sub”), Jay Pharma Inc., a company organized under the laws of Canada (“Jay Pharma”), Jay Pharma

ExchangeCo., Inc.

a company organized under the laws of British Columbia and a wholly owned subsidiary of the Company (“ExchangeCo”),

and Barry Kostiner, as the Company Representative, which provided that, among other things, Merger Sub and Jay Pharma would be amalgamated

and would continue as one corporation (“Amalco”), with Amalco continuing as a direct wholly owned subsidiary of ExchangeCo

and an indirect wholly owned subsidiary of Ameri, on the terms and conditions set forth in the Jay Pharma Amalgamation Agreement.

August 12, 2020, the Company, Jay Pharma and certain other signatories thereto entered into a tender agreement (the “Tender Agreement”),

which provided that, among other things, Ameri would make a tender offer (the “Offer”) to purchase all of the outstanding

common shares of Jay Pharma for the number of shares of Enveric common stock equal to the exchange ratio set forth in the Tender Agreement,

and Jay Pharma would become a wholly-owned subsidiary of Ameri, on the terms and conditions set forth in the Tender Agreement.

Agreement terminated and replaced in its entirety the Jay Pharma Amalgamation Agreement.

On December 30, 2020, the Company, Jay Pharma,

Merger Sub, and ExchangeCo completed the Offer and Jay Pharma became a wholly owned subsidiary of the Company.

The transaction was treated

as a reverse acquisition and recapitalization and accordingly, the historical financial statements prior to the date of the business

combination in these consolidated financial statements are those of Jay Pharma.

The Company has the following wholly owned subsidiaries:

Jay Pharma Inc.

Pharma”), 1306432 B.C.

(“HoldCo”), MagicMed Industries, Inc.

(“MagicMed”), and Enveric Canada.

Company has an Amalgamation Agreement (“Amalgamation Agreement”) and tender agreement (“Tender Agreement”) with

Jay Pharma, which were entered into in prior years.

May 24, 2021, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C.

7 unchanged sentences

The Amalgamation was completed on September

the effective time of the Amalgamation (the “Effective Time”), holders of outstanding common shares of MagicMed (the “MagicMed

Shares”) received such number of shares of common stock of the Company (“Company Shares”) representing, together with

the Company Shares issuable upon exercise of the Warrants and the Converted Options (each as defined herein), approximately 36.6 %

of the issued and outstanding Company Shares (on a fully diluted basis).

The MagicMed Shares were initially converted into Amalco

Redeemable Preferred Shares (as defined in the Amalgamation Agreement), which immediately following the Amalgamation were redeemed for

of a Company Share.

Following such redemption,

the shareholders of MagicMed received additional Company Shares equal to the product of the Exchange Ratio (as defined in the Amalgamation

Agreement) multiplied by the number of MagicMed Shares held by each such shareholder.

Additionally,

following the Effective Time (i) each outstanding MagicMed stock option was converted into and became an option to purchase (the “Converted

Options”) the number of Company Shares equal to the Exchange Ratio multiplied by the number of MagicMed Shares subject to such

MagicMed stock option, and (ii) each holder of an outstanding MagicMed warrant (including Company Broker Warrants (as defined in the

Amalgamation Agreement), the “Warrants”) received upon exercise of such Warrant that number of Company Shares which the holder

would have been entitled to receive as a result of the Amalgamation if, immediately prior to the date of the Amalgamation (the “Effective

Date”), such holder had been the registered holder of the number of MagicMed Shares to which such holder would have been entitled

if such holder had exercised such holder’s Warrants immediately prior to the Effective Time (the foregoing collectively, the “Amalgamation”).

In aggregate, holders of MagicMed Shares received 9,951,217

Company Shares,

representing approximately 31.7 %

of the Company Shares following the consummation of the Amalgamation.

The maximum number of Company Shares to be issued by the Company

as in respect of the Warrants and Converted Options shall not exceed 7,404,101

Company Shares.

aggregate number of Company Shares that the Company issued in connection with the Amalgamation (collectively, the “Share Consideration”)

was in excess of 20 %

of the Company’s pre-transaction outstanding Company Shares.

Accordingly, the Company sought and received stockholder approval

of the issuance of the Share Consideration in the Amalgamation in accordance with the Nasdaq Listing Rules.

to the terms of the Amalgamation Agreement, the Company appointed, effective as of the Effective Time two individuals selected by MagicMed

to the Company Board of Directors, Dr.

Joseph Tucker and Dr.

Brad Thompson.

Amalgamation Agreement contained representations and warranties, closing deliveries and indemnification provisions customary for a transaction

of this nature.

The closing of the Amalgamation was conditioned upon, among other things, (i) the Share Consideration being approved

for listing on Nasdaq, (ii) the effectiveness of a Registration Statement on Form S-4 registering the Share Consideration and (iii) the

approval (a) of the MagicMed stockholders of the Amalgamation and (b) of the Company’s stockholders of each of the Amalgamation

and the issuance of the Share Consideration in the Amalgamation.

The closing of the Amalgamation occurred on September 16, 2021.

Industries develops and commercializes psychedelic-derived pharmaceutical candidates.

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the Psybrary™, is an essential building block from which industry can develop new patented products.

The initial focus

of the Psybrary ™ is on psilocybin and DMT derivatives, and it is then expected to be expanded to other psychedelics.

and Other Uncertainties

consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States

(“GAAP”), which contemplate continuation of the Company as a going concern.

The Company is in a development stage and has

incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception and has

an accumulated deficit of approximately $ 60.7

million as of December

In February 2022, the Company executed an underwritten public offering, realizing net proceeds of approximately $ 9.2

million, after deducting

underwriting discounts, commissions, and other offering expenses.

Based on the current development plans, other operating requirements,

and inclusive of the February 2022 public offering, the Company believes that, based on its current business plan, the existing

cash on hand is sufficient to fund operations for at least the next twelve months following the filing of these consolidated financial

2020 and continuing into 2021 and 2022, the world has been, and continues to be, impacted by the novel coronavirus (COVID-19)

COVID-19 (including its variants and mutations) and measures to prevent its spread impacted Enveric’s business

in a number of ways.

The impact of these disruptions and the extent of their adverse impact on the Company’s financial and

operating results will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently

unknowable duration and severity of the impacts of COVID-19, and among other things, the impact of governmental actions imposed in response

to COVID-19 and individuals’ and companies’ risk tolerance regarding health matters going forward and developing strain mutations.

The initial focus of the Psybrary™

is on psilocybin and DMT derivatives, and it is then expected to be expanded to other psychedelics.

May 11, 2022, the Company announced plans to transfer and spin-off its cannabinoid clinical development pipeline assets to Akos Biosciences,

(formerly known as Acanna Therapeutics, Inc.), a majority owned subsidiary of the Company (hereafter referred to as “Akos”),

which was incorporated on April 13, 2022, by way of dividend to Enveric shareholders (the “Spin-Off”).

The Spin-Off will

be subject to various conditions, including Akos meeting the qualifications for listing on the Nasdaq Stock Market, and if successful,

would result in two standalone public companies.

The new company as a result of the Spin-Off will be referred to as Akos.

If the Spin-Off

does not occur, the Company has guaranteed the redeemable non-controlling interest (“RNCI”).

May 5, 2022, the Company and Akos entered into a Securities Purchase Agreement (the “Akos Purchase Agreement”) with an

accredited investor (the “Akos Investor”), pursuant to which Akos agreed to sell to the Akos Investor up to an aggregate

shares of Akos’ Series A Convertible Preferred Stock (the “Akos Series A Preferred Stock”), par value $ 0.01

per share at a price of $ 1,000

per share, and warrants (the “Akos Warrants”) to purchase shares of Akos’ common stock (the “Akos Common

Stock”), par value $ 0.01

per share, for an aggregate purchase price of up to $ 5,000,000

(the “Akos Private Placement”).

Pursuant to the Akos Purchase Agreement, Akos has issued 1,000

shares of the Akos Series A Preferred Stock to the Akos Investor in exchange for $ 1,000,000

on May 5, 2022 (See Note 8).

July 14, 2022 the Company affected a 1-for-50 reverse stock split .

All historical share and per share amounts reflected throughout this

report have been adjusted to reflect the Reverse Stock Split.

Concern, Liquidity and Other Uncertainties

Company has incurred a loss since inception resulting in an accumulated deficit of $ 79,207,786 as of December 31, 2022 and further losses

are anticipated in the development of its business.

Further, the Company has operating cash outflows of $ 17,146,723 for the year ended

December 31, 2022.

For the year ended December 31, 2022, the Company had a loss from operations of $ 27,415,106 .

Since inception, being

a research and development company, the Company has not yet generated revenue and the Company has incurred continuing losses from its

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

financial statements.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, 2022, the Company had

cash of $ 17,723,884 and working capital of $ 14,435,964 .

The Company’s current cash on hand is not sufficient enough to satisfy

its operating cash needs for the 12 months from the filing of this Annual Report on Form 10-K.

The Company believes that it has adequate

cash on hand to cover anticipated outlays through December 31, 2023.

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.

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, which may include collaborations with third parties as well as disciplined cash spending.

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.

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 financial statements are issued.

The Company’s consolidated financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

current inflationary trend existing in the North American economic environment is considered by the Company to be reasonably likely to

have a material unfavorable impact on results of continuing operations.

Higher rates of price inflation, as compared to recent prior

levels of price inflation have caused a general increase the cost of labor and materials.

In addition, there is an increased risk of

the Company experiencing labor shortages as a result of a potential inability to attract and retain human resources due to increased

labor costs resulting from the current inflationary environment.

February 18, 2022, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market indicating that,

based upon the closing bid price of the Company’s common stock for the 30 consecutive business day period between January 5, 2022,

through February 17, 2022, the Company did not meet the minimum bid price of $ 1.00 per share required for continued listing on the Nasdaq

Capital Market (“Nasdaq”) pursuant to Nasdaq Listing Rule 5550(a)(2).

The letter also indicated that the Company will be

provided with a compliance period of 180 calendar days, or until August 17, 2022 (the “Compliance Period”), in which to regain

compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

July 29, 2022, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market stating that for the

last ten consecutive business days, from July 15 to July 28, 2022, the closing bid price of the Company’s common stock had been

at $ 1.00 per share or greater.

Accordingly, the Company has regained compliance with Listing Rule 5550(a)(2).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation and Principles of Consolidation

accompanying consolidated financial statements have been prepared in accordance and in conformity with GAAP and the applicable rules and regulations of the Securities and Exchange

Commission (the “SEC”) regarding consolidated financial information.

All intercompany transactions have been eliminated in

consolidation.

of Presentation and Principal of Consolidation

accompanying consolidated financial statements have been prepared in accordance and in conformity with GAAP and the applicable rules

and regulations of the Securities and Exchange Commission (the “SEC”) regarding consolidated financial information.

All intercompany

transactions have been eliminated in consolidation.

Reclassification

reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation.

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial

statement presentation.

These reclassifications had no effect on net earnings or cash flows as previously reported.

preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that

affect the reported amount of assets and liabilities at the date of the financial statements and expenses during the periods reported.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

preparation of the consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amount of assets and liabilities at the date of the financial statements and expenses during the periods reported.

By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such

2 unchanged sentences

the fair value of transactions involving common stock and the valuation of stock-based compensation, accruals associated with third party

providers supporting research and development efforts, estimated fair values of long lived assets used to record impairment charges related

to intangible assets, acquired in-process research and development, and goodwill, and allocation of purchase price

in business acquisitions.

providers supporting research and development efforts, estimated fair values of long lives assets used to record impairment charges related

to intangible assets, acquired in-process research and development (“IPR&D”), and goodwill, and allocation of purchase

price in business acquisitions.

Actual results could differ from those estimates.

1 unchanged sentence

inception through December 31, 2022, the reporting currency of the Company was the United States dollar while the functional currency

of the Company was the Canadian dollar.

From January 1, 2020 through December 31, 2021, the reporting currency of the Company remained

the United States dollar, with a portion of transactions, especially those transactions conducted by the Company’s Canadian subsidiary,

Enveric Biosciences Canada, Inc (“EBCI”), being denominated in Canadian dollars.

of certain of the Company’s subsidiaries was the Canadian dollar.

For the reporting periods ended December 31, 2022 and December

31, 2021, the Company engaged in a number of transactions denominated in Canadian dollars.

As a result, the Company is subject to exposure

5 unchanged sentences

translation gains and losses are recorded as foreign currency translation gain (loss), which is included in the consolidated statements

of shareholders’ equity as a component of accumulated other comprehensive loss.

of shareholders’ equity as a component of accumulated other comprehensive income (loss).

Company has not entered into any financial derivative instruments that expose it to material market risk, including any instruments designed

3 unchanged sentences

that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other comprehensive

income (loss) in the consolidated statements of operations and comprehensive loss as incurred.

income (loss) in the consolidated statements of operations and comprehensive income (loss) as incurred.

and Cash Equivalents

3 unchanged sentences

of Credit Risk

instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions,

which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 .

The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such

instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,

which at times, may exceed the federal depository insurance coverage of $ 250,000 in the United States and $ 100,000 in Canada.

has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

As of December 31, 2022, the Company had greater than $ 250,000 and $ 100,000 at US and Canadian financial institutions, respectively.

Comprehensive

6 unchanged sentences

dollar as their functional currency.

Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards

Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and

accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

(“ASC”) Topic 805, “Business Combinations” (“ASC 805”) using the acquisition method of accounting,

and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition.

transactions that are business combinations, the Company evaluates the existence of goodwill.

Goodwill represents the excess

purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination.

also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from

All acquisition costs are expensed as incurred.

Upon acquisition, the accounts and results of operations are consolidated

as of and subsequent to the acquisition date.

Goodwill represents the excess purchase

price over the fair value of the tangible net assets and intangible assets acquired in a business combination.

ASC 805-10 also specifies

criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill.

All acquisition

costs are expensed as incurred.

Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the

acquisition date.

estimated fair value of net assets acquired, including the allocation of the fair value to identifiable assets and liabilities, was determined

6 unchanged sentences

The estimated fair values reflected in the purchase accounting are subject to management’s judgment.

assets consist of the Psybrary and Patent Applications, In Process Research and Development (“IPR&D”) and license agreements.

assets consist of the Psybrary™ and Patent Applications, In Process Research and Development (“IPR&D”) and license

Psybrary™ and Patent Applications intangible assets are valued using the relief from royalty method.

The cost of license agreements

is amortized over the economic life of the license.

The Company assesses the carrying value of

its intangible assets for impairment each year.

The cost of license

agreements is amortized over the economic life of the license.

The Company assesses the carrying value of its intangible assets for impairment

intangible assets are acquired in conjunction with the acquisition of a business and are assigned a fair value, using the multi-period

5 unchanged sentences

be generated, and begin amortization.

The Company tests its intangible assets for impairment at least annually and whenever events

or circumstances change that indicate impairment may have occurred.

A significant amount of judgment is involved in determining if an

indicator of impairment has occurred.

The Company tests its intangible assets for impairment at least annually and whenever events or

circumstances change that indicate impairment may have occurred.

A significant amount of judgment is involved in determining if an indicator

of impairment has occurred.

Such indicators may include, among others and without limitation:

a significant decline in the

Company’s expected future cash flows;

a significant decline in the Company’s

expected future cash flows;

a sustained, significant decline in the Company’s stock price and market capitalization;

a significant adverse change in legal factors or in the business climate of the Company’s segments;

a significant

adverse change in legal factors or in the business climate of the Company’s segments;

unanticipated competition;

and slower growth rates.

If the fair value determined is less than the carrying amount, an impairment loss is recognized in

operating results.

and slower growth

If the fair value determined is less than the carrying amount, an impairment loss is recognized in operating results.

Company tests goodwill for potential impairment at least annually, or more frequently if an event or other circumstance indicates that

8 unchanged sentences

a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

and equipment are recorded at cost.

4 unchanged sentences

The estimated

useful lives are typically 3

years for office furniture and equipment and

are depreciated on a straight-line basis.

lease assets are included within operating lease right-of-use assets, and the corresponding operating lease obligation on the consolidated

balance sheet as of December 31, 2021.

The Company has elected not to present short-term leases as these leases have a lease term of

12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise.

All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement

Because most of the Company’s leases do not provide an implicit rate of return, the Company used an incremental borrowing

rate based on the information available at adoption date in determining the present value of lease payments.

Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives

or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging”

The Company accounts for warrants for shares of the Company’s common stock that are not indexed to its

own stock as derivative liabilities at fair value on the consolidated balance sheet.

The Company accounts for common stock warrants with

put options as liabilities under ASC 480.

Such warrants are subject to remeasurement at each consolidated balance sheet date and any

change in fair value is recognized as a component of other expense on the consolidated statement of operations.

The Company will continue

to adjust the liability for changes in fair value until the earlier of the exercise or expiration of such common stock warrants.

time, the portion of the warrant liability related to such common stock warrants will be reclassified to additional paid-in capital.

useful lives are typically 3 to 5 years for office furniture and equipment and are depreciated on a straight-line basis.

Liability and Investment Options

Company evaluates all of its financial instruments, including issued stock purchase warrants and investment options, to determine if

such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC 815.

Company accounts for warrants and investment options for shares of the Company’s common stock that are not indexed to its own stock

as derivative liabilities at fair value on the consolidated balance sheets.

The Company accounts for common stock warrants and investment

options with put options as liabilities under ASC 480.

Such warrants and investment options are subject to remeasurement at each consolidated

balance sheet date and any change in fair value is recognized as a component of other expense on the consolidated statements of operations.

The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of such common

stock warrants and investment options.

At that time, the portion of the warrant liability and investment options related to such common

stock warrants will be reclassified to additional paid-in capital.

change in any of the terms or conditions of warrants is accounted for as a modification.

For a warrant modification accounted for under

ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant over the fair

value of the original warrant immediately before its terms are modified, measured based on the fair value of the shares and other pertinent

factors at the modification date.

The accounting for incremental fair value of warrants is based on the specific facts and circumstances

related to the modification.

When a modification is directly attributable to equity offerings, the incremental change in fair value of

the warrants are accounted for as equity issuance costs.

Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded

derivatives in accordance with ASC 815.

For derivative financial instruments that are accounted for as assets or liabilities, the derivative

instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the

fair value reported in the consolidated statements of operations and comprehensive loss.

The classification of derivative instruments,

including whether such instruments should be recorded as assets or liabilities or as equity, is evaluated at the end of each reporting

Derivative liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net-cash

settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Company allocates offering costs to the different components of the capital raise on a pro rata basis.

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Any offering costs allocated to warrant liabilities are charged to general

and administrative expenses on the Company’s consolidated statement of operations.

and administrative expenses on the Company’s consolidated statement of operations and comprehensive loss.

Company utilizes an asset and liability approach for financial accounting and reporting for income taxes.

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and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that

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Net operating losses for these periods will not be available to reduce future taxable income until the returns

Company follows Accounting Standards Codification (“ASC”) 718, Compensation - Stock Compensation, which addresses the accounting

for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method.

Awards of shares for

property or services are recorded at the more readily measurable of the estimated fair value of the stock award and the estimated fair

value of the service.

The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of certain stock-based

awards under ASC 718.

The assumptions used in calculating the fair

value of stock-based awards represent management’s reasonable estimates and involve inherent uncertainties and the application

Company follows ASC 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring

such transactions to be accounted for using the fair value method.

Awards of shares for property or services are recorded at the more

readily measurable of the estimated fair value of the stock award and the estimated fair value of the service.

The Company uses the Black-Scholes

option-pricing model to determine the grant date fair value of certain stock-based awards under ASC 718.

The assumptions used in calculating

the fair value of stock-based awards represent management’s reasonable estimates and involve inherent uncertainties and the application

of management’s judgment.

Fair value of restricted stock units or restricted stock awards is determined by the closing price per share of the

Company’s common stock on the date of award grant.

The estimated fair value is

amortized as a charge to earnings on a straight-line basis, for awards or portions of awards that do not require specified milestones

or performance criteria as a vesting condition and also depending on the terms and conditions of the award, and the nature of the relationship

of the recipient of the award to the Company.

The Company records the grant date fair value in line with the period over which it was

Fair value of restricted stock units or restricted stock awards is determined by the closing price per

share of the Company’s common stock on the date of award grant.

estimated fair value is amortized as a charge to earnings on a straight-line basis, for awards or portions of awards that do not require

specified milestones or performance criteria as a vesting condition and also depending on the terms and conditions of the award, and

the nature of the relationship of the recipient of the award to the Company.

The Company records the grant date fair value in line with

the period over which it was earned.

For employees and consultants, this is typically considered to be the vesting period of the award.

The Company accounts for

forfeitures as they occur.

The Company accounts for forfeitures as they occur.

estimated fair value of awards that require specified milestones or recipient performance are charged to expense when such milestones

or performance criteria are met.

or performance criteria are probable to be met.

stock units, restricted stock awards, and stock options are granted at the discretion of the Compensation Committee of the Company’s

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vest over the requisite service periods, typically over a 12 to 48-month period.

A significant portion of these awards may include

vesting terms that include, without limitation, defined volume weighted average price levels being achieved by the Company’s Common

Stock, specific performance milestones, employment, or engagement by the Company, with no assurances of achievement of any such

vesting conditions, if applicable.

A significant portion of these awards may include vesting

terms that include, without limitation, defined volume weighted average price levels being achieved by the Company’s Common Stock,

specific performance milestones, employment, or engagement by the Company, with no assurances of achievement of any such vesting conditions,

if applicable.

value of RSU’s is equal to the product of the number of units awarded, multiplied by the closing price per share of the Company’s

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employee” (generally, certain officers and highly compensated employees of publicly traded companies), such recipient may only

convert vested RSU’s into shares of Common Stock no earlier than the first day of the seventh month following such recipients

termination of employment with the Company, or the event of change in control.

convert vested RSU’s into shares of Common Stock no earlier than the first day of the seventh month following such recipients termination

of employment with the Company, or the event of change in control.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

value of RSA’s is equal to the product of the number of restricted shares awarded, multiplied by the closing price per share of

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for purposes of calculating basic and diluted earnings per share.

dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share for the years ended

the year ended December 31, 2022 the Company issued 767,500 pre-funded common stock warrants, which were exercised on various dates during

the year ended December 31, 2022.

The pre-funded common stock warrants became exercisable on July 26, 2022 based on the terms and conditions

of the agreements.

As the pre-funded common stock warrants are exercisable for $ 0.0001 , these shares are considered outstanding common

shares and are included in the computation of basic and diluted Earnings Per Share as the exercise of the pre-funded common stock warrants

is virtually assured.

The Company included these pre-funded common stock warrants in basic and diluted earnings per share when all conditions

were met on July 26, 2022.

dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share the years ended

December 31, 2022 and 2021 because the effect of their inclusion would have been anti-dilutive.

OF POTENTIALLY DILUTIVE SECURITIES

the year ended

December 31, 2021

the year ended

December 31, 2020

to purchase shares of common stock

B Preferred Stock

stock units – vested and unissued

the years ended December 31,

Warrants to purchase shares of

Restricted stock units - vested and unissued

Restricted stock units - unvested

Restricted stock awards - vested and unissued

stock awards - unvested

to purchase shares of common stock

potentially dilutive securities

Value Measurement

Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurement” of the Financial

Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial

instruments and disclosures about fair value of its financial instruments.

ASC 820–10 establishes a framework for measuring fair

value and expands disclosures about fair value measurements.

To increase consistency and comparability in fair value measurements and

related disclosures, ASC 820–10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to

measure fair value into three (3) broad levels.

three (3) levels of fair value hierarchy defined by ASC 820–10 are described below:

market prices available in active markets for identical assets or liabilities as of the reporting date.

inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the

reporting date.

inputs that are generally unobservable inputs and not corroborated by market data.

assets or liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies

or similar techniques and at least one significant model assumption or input is unobservable.

fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and

the lowest priority to unobservable inputs.

If the inputs used to measure the financial assets and liabilities fall within more than

one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of

the instrument.

carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses and other current assets, accounts

payable and accrued expenses approximate their fair values due to the short-term nature of these instruments.

Company uses Level 3 of the fair value hierarchy to measure the fair value of its warrant liabilities.

The Company revalues such liabilities

at every reporting period and recognizes gains or losses as change in fair value of warrant liabilities in the consolidated statements

of operations that are attributable to the change in the fair value of the warrant liabilities.

following table provides the financial liabilities measured on a recurring basis and reported at fair value on the consolidated balance

sheet as of December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair

Restricted stock awards - unvested

Investment options to purchase shares of common

Options to purchase

shares of common stock

Total potentially dilutive

Value Measurements

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date.

To increase the comparability of fair value measures, the following hierarchy prioritizes

the inputs to valuation methodologies used to measure fair value:

1 - Valuations based on quoted prices for identical assets and liabilities in active markets.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and

liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other

inputs that are observable or can be corroborated by observable market data.

3 - Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by

other market participants.

These valuations require significant judgment.

certain financial instruments, including cash and accounts payable, the carrying amounts approximate their fair values as of December

31, 2022 and 2021 because of their short-term nature.

following table provides the financial liabilities measured on a recurring basis and reported at fair value on the balance sheets as

of December 31, 2022 and 2021 and indicates the fair value of the valuation inputs the Company utilized to determine such fair value

of warrant liabilities, derivative liability, and investment options:

OF FAIR VALUE HIERARCHY OF VALUATION INPUTS ON RECURRING BASIS

liabilities – January Warrants

liabilities – February Warrants

value as of December 31, 2021

Company had no assets or liabilities measured at fair value on December 31, 2020.

the January and February Warrants are classified as Level 3, as there is no current market for these securities and as a result

the determination of fair value requires significant judgment or estimation.

Changes in fair value measurement categorized within

Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES

free interest rate

following table presents the changes in fair value of the warrant liabilities:

OF FAIR VALUE OF WARRANT LIABILITIES

Warrant Liability

value as of December 31, 2020

value of warrant liability

in fair value

Warrant liabilities - January 2021

Warrant liabilities - February 2021 Warrants

Warrant liabilities

- February 2022 Warrants

Fair value of warrant liability as of

December 31, 2022

liability - fair value

Derivative liability - May

Fair value of derivative liability as

of December 31, 2022

liability - fair value

Wainwright investment options

RD investment options

PIPE investment options

Fair value of investment option liability

as of December 31, 2022

warrant liabilities, derivative liability, and investment options are all classified as Level 3, for which there is no current market

for these securities such as the determination of fair value requires significant judgment or estimation.

Changes in fair value measurement

categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded

as appropriate.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company established the initial fair value of its warrant liabilities at the respective dates of issuance.

The Company used a Black Scholes

valuation model in order to determine their value.

The key inputs into the Black Scholes valuation model for the initial valuations of

the warrant liabilities are below:

OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES AND INVESTMENT OPTIONS

February 2022

2022 Post-Modification Warrants (See Note 7)

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of warrants

Value (per share)

Company established the initial fair value of its derivative liability at the respective date of issuance.

The Company used a Weighted

Expected Return valuation model in order to determine their value.

The key inputs into the Weighted Expected Return valuation model for

the initial valuations of the warrant liabilities are below:

Derivative Liability

Dividend rate

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company established the initial fair value of its investment options at the respective dates of issuance.

The Company used a Black Scholes

valuation model in order to determine their value.

The key inputs into the Black Scholes valuation model for the initial valuations of

the investment options are below:

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of investment options

Value (per share)

following table presents the changes in fair value of the warrant liabilities, derivative liability, and investment options

that are classified as Level 3:

OF FAIR VALUE OF WARRANT LIABILITIES AND DERIVATIVE LIABILITY AND INVESTMENT OPTIONS

Warrant Liabilities

Fair value as of December 31, 2020

Initial value of warrant liability

Change in fair value

( 9,327,326 )

Fair value as of December 31, 2021

Issuance of February 2022 warrants

Change in fair value due to modification of

February 2022 warrants as part of July 2022 raise

Change in fair value

( 4,315,236 )

Fair value of warrant liability as of

December 31, 2022

Derivative Liability

Fair value as of December 31, 2021

Issuance of May 2022 convertible

preferred stock

Change in fair value

Fair value of derivative liability as

of December 31, 2022

Investment Options

Fair value as of December 31, 2021

Issuance of July 2022 investment options

Change in fair value

( 3,472,726 )

value as of December 31, 2021

key inputs into the Black Scholes valuation model for the Level 3 valuations as of December 31, 2021 are below:

OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES

free interest rate

Fair value of investment option liability

as of December 31, 2022

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

key inputs into the Black Scholes valuation model for the Level 3 valuations of the warrant liabilities as of December 31, 2022 are below:

OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES AND INVESTMENT OPTIONS

2021 Warrants

2022 Warrants

Post-Modification Warrants

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of warrants

Value (per share)

key inputs into the Weighted Expected Return valuation model for the Level 3 valuations of the derivative liability as of December 31,

2022 are below:

Derivative Liability

Dividend rate

key inputs into the Black Scholes valuation model for the Level 3 valuations of the investment options as of December 31, 2022 are below:

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of investment options

Value (per share)

and Development

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actual costs become known, the Company adjusts its accruals accordingly.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

lease assets are included within right-of-use operating lease asset and operating lease liabilities are included in current portion of

right-of-use operating lease obligation and non-current portion of right-of-use operating lease obligation on the consolidated balance

sheets as of December 31, 2022 and 2021.

The Company has elected not to present short-term leases as these leases have a lease term of

12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise.

All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement

Because most of the Company’s leases do not provide an implicit rate of return, the Company used an incremental borrowing

rate based on the information available at adoption date in determining the present value of lease payments.

A lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease:

(i) there is a transfer of

ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset

that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset,

(iv) the present value of the sum of lease payments equals or exceeds substantially all of the fair value of the leased asset, or (v)

the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of

the lease term.

All other leases are recorded as operating leases.

Finance lease payments are bifurcated into (i) a portion that is recorded

as interest expense and (ii) a portion that reduces the finance liability associated with the lease.

The Company did not have any finance

leases as of December 31, 2022 and 2021.

Non-controlling Interest

connection with the issuance of Akos Series A Preferred Stock, the Akos Purchase Agreement and certificate of designation contain a put

right guaranteed by the Company as defined in Note 8.

Applicable accounting guidance requires an equity instrument that is redeemable

for cash or other assets to be classified outside of permanent equity if it is redeemable (a) at a fixed or determinable price on a fixed

or determinable date, (b) at the option of the holder, or (c) upon the occurrence of an event that is not solely within the control of

As a result of this feature, the Company recorded the non-controlling interests as redeemable non-controlling interests and

classified them in temporary equity within its consolidated balance sheet initially at its acquisition-date estimated redemption value

or fair value.

In addition, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust

the carrying amount of the instrument by accreting the embedded derivative at each reporting period over 12 months.

Akos Series A Preferred Certificate of Designations provides that upon the earlier of (i) the one-year anniversary of May 5, 2022, and

only in the event that the Spin-Off has not occurred;

or (ii) such time that Akos and the Company have abandoned the Spin-Off or the

Company is no longer pursuing the Spin-Off in good faith, the holders of the Akos Series A Preferred Stock shall have the right (the

“Put Right”), but not the obligation, to cause Akos to purchase all or a portion of the Akos Series A Preferred Stock for

a purchase price equal to $ 1,000 per share, subject to certain adjustments as set forth in the Akos Series A Preferred Certificate of

Designations, plus all the accrued but unpaid dividends per share.

Pursuant to the Akos Purchase Agreement, the Company has guaranteed

the payment of the purchase price for the shares purchased under the Put Right.

Company determines its reporting units in accordance with FASB ASC 280, “Segment Reporting” (“ASC 280”).

The Company evaluates a reporting unit by first identifying its operating segments under ASC 280.

Company evaluates a reporting unit by first identifying its operating segments under ASC 280.

The Company then evaluates each operating

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if the segments are economically similar and, if so, the operating segments are aggregated.

The Company has one

operating segment and reporting unit.

is organized and operated as one business.

Management reviews its business as a single operating segment, using financial and other information

rendered meaningful only by the fact that such information is presented and reviewed in the aggregate.

The Company has multiple operations related

to psychedelics and cannabinoids.

Both of these operations exist under one reporting unit:

The Company has one operating segment

and reporting unit.

The Company is organized and operated as one business.

Management reviews its business as a single operating segment,

using financial and other information rendered meaningful only by the fact that such information is presented and reviewed in the aggregate.

Accounting Pronouncements

December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2019-12, Income Taxes (Topic 740:

the Accounting for Income Taxes (“ASU 2019-12”), which removes certain exceptions to the general principles in Topic 740.

ASU 2019-12 is effective for the fiscal years beginning after December 15, 2020, with early adoption permitted.

The adoption of this

guidance did not have a material impact on the Company’s consolidated financial statements.

October 2020, the FASB issued ASU 2020-10, “Codification Improvements.” The new accounting rules improve the consistency

of the Codification by including all disclosure guidance in the appropriate Disclosure Section (Section 50) that had only been included

in the Other Presentation Matters Section (Section 45) of the Codification.

Additionally, the new rules also clarify guidance across

various topics including defined benefit plans, foreign currency transactions, and interest expense.

The new accounting rules were effective

for the Company in the first quarter of 2021.

The adoption of the new accounting rules did not have a material impact on the Company’s

consolidated financial statements.

May 2021, the FASB issued ASU No.

2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50),

Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.

amendments in ASU No.

2021-04 provides guidance to clarify and reduce diversity in an issuer’s accounting for modifications or

exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification

The amendments in this ASU No.

2021-04 are effective for all entities for fiscal years beginning after December 15, 2021,

and interim periods within those fiscal years, with early adoption permitted, including interim periods within those fiscal years.

Company adopted ASU 2021-04 effective January 1, 2022.

The adoption of the new accounting rules did not have a material

impact on the Company’s consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts

in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify certain financial instruments.

ASU 2020-06 eliminates

the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies

the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The new standard

also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s

ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all

convertible instruments.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 and should be applied on a full or

modified retrospective basis.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including

interim periods within those fiscal years.

The Company will adopt ASU 2020-06 effective January 1, 2024.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

AMALGAMATION WITH MAGICMED INDUSTRIES INC .

10 unchanged sentences

Shares”) received such number of shares of common stock of the Company (“Company Shares”) representing, together with

the Company Shares issuable upon exercise of the Warrants and the Converted Options (each as defined herein), approximately 36.6 %

of the issued and outstanding Company Shares (on

a fully diluted basis).

The MagicMed Shares were initially converted into Amalco Redeemable Preferred Shares (as defined in the

Amalgamation Agreement), which immediately following the Amalgamation were redeemed for 0.000001

the Company Shares issuable upon exercise of the Warrants and the Converted Options (each as defined herein), approximately 36.6 % of

the issued and outstanding Company Shares (on a fully diluted basis).

The MagicMed Shares were initially converted into Amalco Redeemable

Preferred Shares (as defined in the Amalgamation Agreement), which immediately following the Amalgamation were redeemed for 0.000001

of a Company Share.

Following such redemption,

the shareholders of MagicMed received additional Company Shares equal to the product of the Exchange Ratio (as defined in the Amalgamation

Agreement) multiplied by the number of MagicMed Shares held by each such shareholder.

Additionally,

following the Effective Time (i) each outstanding MagicMed stock option was converted into and became an option to purchase (the “Converted

Options”) the number of Company Shares equal to the Exchange Ratio multiplied by the number of MagicMed Shares subject to such

MagicMed stock option, and (ii) each holder of an outstanding MagicMed warrant (including Company Broker Warrants (as defined in the

Amalgamation Agreement), the “Warrants”) received upon exercise of such Warrant that number of Company Shares which the holder

would have been entitled to receive as a result of the Amalgamation if, immediately prior to the date of the Amalgamation (the “Effective

Date”), such holder had been the registered holder of the number of MagicMed Shares to which such holder would have been entitled

if such holder had exercised such holder’s Warrants immediately prior to the Effective Time (the foregoing collectively, the “Amalgamation”).

In aggregate, holders of MagicMed Shares received 9,951,217

Company Shares

representing approximately 31.7 %

of the Company Shares following the consummation of the Amalgamation.

The maximum number of Company Shares to be issued by the Company

as in respect of the Warrants and Converted Options shall not exceed 7,404,101

Company Shares.

Following such redemption, the shareholders of MagicMed received additional Company Shares equal to the product of

the Exchange Ratio (as defined in the Amalgamation Agreement) multiplied by the number of MagicMed Shares held by each such shareholder.

Additionally, following the Effective Time (i) each outstanding MagicMed stock option was converted into and became an option to purchase

(the “Converted Options”) the number of Company Shares equal to the Exchange Ratio multiplied by the number of MagicMed Shares

subject to such MagicMed stock option, and (ii) each holder of an outstanding MagicMed warrant (including Company Broker Warrants (as

defined in the Amalgamation Agreement), the “Warrants”) received upon exercise of such Warrant that number of Company Shares

which the holder would have been entitled to receive as a result of the Amalgamation if, immediately prior to the date of the Amalgamation

(the “Effective Date”), such holder had been the registered holder of the number of MagicMed Shares to which such holder

would have been entitled if such holder had exercised such holder’s Warrants immediately prior to the Effective Time (the foregoing

collectively, the “Amalgamation”).

In aggregate, holders of MagicMed Shares received 199,025 Company Shares representing

approximately 31.7 % of the Company Shares following the consummation of the Amalgamation.

The maximum number of Company Shares to be

issued by the Company as in respect of the Warrants and Converted Options shall not exceed 148,083 Company Shares.

aggregate number of Company Shares that the Company issued in connection with the Amalgamation (collectively, the “Share Consideration”)

was in excess of 20 %

of the Company’s pre-transaction outstanding Company Shares.

Accordingly, the Company sought and received stockholder approval

of the issuance of the Share Consideration in the Amalgamation in accordance with the Nasdaq Listing Rules.

was in excess of 20 % of the Company’s pre-transaction outstanding Company Shares.

Accordingly, the Company sought and received

stockholder approval of the issuance of the Share Consideration in the Amalgamation in accordance with the Nasdaq Listing Rules.

to the terms of the Amalgamation Agreement, the Company appointed, effective as of the Effective Time two individuals selected by MagicMed

13 unchanged sentences

the Psybrary™, is an essential building block from which industry can develop new patented products.

The initial focus

of the Psybrary ™ is on psilocybin and DMT derivatives, and it is then expected to be expanded to other psychedelics.

The initial focus of the Psybrary™

is on psilocybin and DMT derivatives, and it is then expected to be expanded to other psychedelics.

September 16, 2021, the Company completed the Acquisition.

In exchange for a total purchase price valued at $ 39,042,282

the Company acquired 37,463,673

shares of Common Stock from MagicMed, which represents

of the outstanding and issued shares of Common Stock of MagicMed, for equity consideration on the date of closing valued at $ 27,067,310 .

The Purchaser also agreed that it would issue Company Shares in lieu of shares of MagicMed Shares for any warrants to purchase MagicMed

Shares that were exercised, with the maximum number of Company Shares issuable pursuant to such warrant exercises being 5,913,672 .

The fair value of the warrants on the closing date of the Amalgamation was $ 10,724,578 .

Additionally, the Purchaser agreed that it would

issue issued Company Shares in lieu of shares of MagicMed Shares for any options to purchase MagicMed Shares that were exercised, with

the maximum number of Company Shares issuable pursuant to such option exercises being 973,840 .

The fair value of the options on the closing date

of the Amalgamation was $ 1,535,790 ,

with $ 1,250,394

included in the purchase price and $ 285,396

to be recognized as expense in the post combination

goodwill of $ 9,834,855

was recorded in relation to the Acquisition,

with $ 9,061,927

of this amount being related to deferred tax

liabilities arising from the Company’s purchase of the MagicMed Shares and $ 772,928

relating to the residual intangible asset that

generates earnings in excess of a normal return on all other tangible and intangible assets.

In exchange for a total purchase price valued at $ 39,042,282 the Company acquired

37,463,673 shares of Common Stock from MagicMed, which represents 100 % of the outstanding and issued shares of Common Stock of MagicMed,

for equity consideration on the date of closing valued at $ 27,067,310 .

The Purchaser also agreed that it would issue Company Shares in

lieu of shares of MagicMed Shares for any warrants to purchase MagicMed Shares that were exercised, with the maximum number of Company

Shares issuable pursuant to such warrant exercises being 118,274 .

The fair value of the warrants on the closing date of the Amalgamation

was $ 10,724,578 .

Additionally, the Purchaser agreed that it would issue issued Company Shares in lieu of shares of MagicMed Shares for

any options to purchase MagicMed Shares that were exercised, with the maximum number of Company Shares issuable pursuant to such option

exercises being 19,477 .

The fair value of the options on the closing date of the Amalgamation was $ 1,535,790 , with $ 1,250,394 included

in the purchase price and $ 285,396 to be recognized as expense in the post combination period.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

goodwill of $ 9,834,855 was recorded in relation to the Acquisition, with $ 9,061,927 of this amount being related to deferred tax liabilities

arising from the Company’s purchase of the MagicMed Shares and $ 772,928 relating to the residual intangible asset that generates

earnings in excess of a normal return on all other tangible and intangible assets.

following table represents the purchase price:

OF BUSINESS ACQUISITIONS

common shares issued)

value of warrants

value of options

Purchase Price

Stock ( 199,025 common shares issued)

Fair value of warrants

Fair value of options

Total Purchase Price

Acquisition is being accounted for as a business combination in accordance with ASC 805.

1 unchanged sentence

OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

expenses and other current assets

remittances recoverable

and equipment

process research and development

and patent applications

Assets acquired:

expenses and other liabilities

lease liabilities

Prepaid expenses and other

current assets

Government remittances

Property and equipment

Right-of-use lease assets

In process research and

Psybrary and patent applications

assets acquired

Liabilities assumed:

Accounts payable

Accrued expenses and other

Right-of-use lease liabilities

tax liabilities

1 unchanged sentence

fair value of net assets acquired attributable to the Company

goodwill represents the excess fair value after the allocation to the identifiable net assets, with $ 9,061,927

being specifically attributable to the deferred

tax liabilities incurred and $ 777,928

relating to the residual intangible asset that

generates earnings in excess of a normal return on all other tangible and intangible assets.

The calculated goodwill is not deductible

for tax purposes.

goodwill represents the excess fair value after the allocation to the identifiable net assets, with $ 9,061,927 being specifically attributable

to the deferred tax liabilities incurred and $ 777,928 relating to the residual intangible asset that generates earnings in excess of

a normal return on all other tangible and intangible assets.

The calculated goodwill is not deductible for tax purposes.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

adjustments to the assessed fair values of the assets and liabilities made subsequent to the acquisition date, but within the measurement

1 unchanged sentence

Any adjustments subsequent to the measurement period are recorded

During the fourth quarter

of 2021, the Company finalized the opening balance sheet and valuations for the assets acquired and liabilities assumed related to the

acquisition of MagicMed and adjusted provisional amounts as follows:

Company recorded a $ 16.6 million indefinite lived Psybrary and Patent Applications asset with a corresponding decrease to IPR&D;

Company further decreased the IPR&D asset by $ 0.7

million with a corresponding increase to Goodwill;

Company recorded a $ 0.2

million right of use asset, with offsetting right of use operating lease liability related to identified leases in accordance with

ASC 842 – Leases.

the fourth quarter of 2021, the Company finalized the opening balance sheet and valuations for the assets acquired and liabilities assumed

related to the acquisition of MagicMed and adjusted provisional amounts as follows:

Company recorded a $ 16.6 million indefinite lived Psybrary™ and Patent Applications

asset with a corresponding decrease to IPR&D;

Company further decreased the IPR&D asset by $ 0.7 million with a corresponding increase

Company recorded a $ 0.2 million right of use asset, with offsetting right of use operating

lease liability related to identified leases in accordance with ASC 842 – Leases.

acquisition-related costs for the Acquisition incurred by the Company during the year ended December 31, 2021 was approximately $ 650,000

and is included in general and administrative

expenses in the consolidated statement of operations.

and is included in general and administrative expenses in the consolidated statement of operations.

and Proforma Financial Information

amounts of MagicMed’s revenues and net loss included in the Company’s consolidated statements of operations and comprehensive

loss for the period from the acquisition date to December 31, 2021 were $ —

and $ 33,556,532

respectively.

The following unaudited proforma

financial information presents the consolidated results of operations of the Company and MagicMed for the years ended December

31, 2021 and December 31, 2020, as if the acquisition had occurred as of the beginning of the first period presented instead of on September

The proforma information does not necessarily reflect the results of operations that would have occurred had the entities been

a single company during those periods.

loss for the period from the acquisition date to December 31, 2021 were $ — and $ 33,556,532 respectively.

The following unaudited

proforma financial information presents the consolidated results of operations of the Company and MagicMed for the year ended December

31, 2021, as if the acquisition had occurred as of the beginning of the first period presented instead of on September 16, 2021.

proforma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company

during those periods.

OF PROFORMA INFORMATION

the years ended December 31,

$ ( 54,127,203 )

the year ended December 31,

$ ( 54,127,203 )

INTANGIBLE ASSETS AND GOODWILL

the year ended December 31, 2021, the Company recorded goodwill of $ 9.8 million and indefinite lived intangible assets related to the

Psybrary and patent applications of $ 16.6 million and in-process R&D of $ 18.9 million in connection with the acquisition of MagicMed,

as described in Note 3.

Company performs an annual impairment test at the reporting unit level as of December 31 of each fiscal year.

As of December 31, 2022,

2021, the Company qualitatively assessed whether it is more likely than not that the respective fair value of the Company’s

reporting unit is less than its carrying amount, including goodwill.

During the fourth quarter 2021, the Company experienced a

sustained decline in the quoted market price of the Company’s common stock and as a result the Company determined that as of

December 31, 2021 it was more likely than not that the carrying value of these acquired intangibles exceeded their estimated fair

Accordingly, the Company performed an impairment analysis as of that date using the income approach.

This analysis required

significant judgments, including primarily the estimation of future development costs, the probability of success in various phases

of its development programs, potential post launch cash flows and a risk-adjusted weighted average cost of capital.

Pursuant to ASU

2017-04, the Company recorded a goodwill and intangible asset impairment charge for the excess of the reporting unit’s

carrying value over its fair value.

The following table provides the Company’s goodwill, indefinite and definite lives

intangible assets as of December 31, 2021 and 2020.

There were no impairment charges during the year ended December 31, 2020.

were no goodwill or indefinite lived intangible assets as of December 31, 2020.

the Company qualitatively assessed whether it is more likely than not that the respective fair value of the Company’s reporting

unit is less than its carrying amount, including goodwill.

Beginning with the fourth quarter of 2021 and throughout 2022, the Company

experienced a sustained decline in the quoted market price of the Company’s common stock and as a result the Company determined

that as of December 31, 2022 it was more likely than not that the carrying value of these acquired intangibles exceeded their estimated

Accordingly, the Company performed an impairment analysis as of December 31, 2022 using the income approach.

This analysis

required significant judgments, including primarily the estimation of future development costs, the probability of success in various

phases of its development programs, potential post launch cash flows and a risk-adjusted weighted average cost of capital.

ASU 2017-04, the Company recorded a goodwill and intangible asset impairment charge as of December 31, 2022 and a goodwill and intangible

asset impairment charge as of December 31, 2021 for the excess of the reporting unit’s carrying value over its fair value.

following table provides the Company’s goodwill, indefinite and definite lives intangible assets as of December 31, 2022 and 2021.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2022 and 2021, the Company’s intangible assets consisted of:

OF GOODWILL INDEFINITE AND FINITE LIVED INTANGIBLE ASSETS

at December 31, 2020

during the year

December 31, 2020

Acquired during the year

Impairment losses

( 8,225,862 )

on currency translation

Balance at December 31,

Impairment losses

( 1,486,060 )

on currency translation

at December 31, 2022

Indefinite lived intangible

at December 31, 2020

during the year

Balance at December 31,

Acquired during the year

Impairment losses

( 29,048,164 )

on currency translation

Balance at December 31,

Impairment losses

( 5,967,602 )

on currency translation

at December 31, 2022

Definite lived intangible

at January 1, 2020

during the year

at December 31, 2020

during the year

Balance at December 31,

Acquired during the year

Impairment loss

( 1,404,892 )

1 unchanged sentence

Balance at December 31,

For goodwill, accumulated

impairment amounted to $ 8.2 million and $ — as of December 31, 2021 and 2020, respectively.

For the identified indefinite lived

assets, accumulated impairment amounted to $ 29.0 million and $ — as of December 31, 2021 and 2020, respectively.

at December 31, 2022

goodwill, impairment losses amounted to $ 1,486,060 and $ 8,225,862 as of December 31, 2022 and 2021, respectively.

For the identified indefinite

lived assets, impairment losses amounted to $ 5,967,602 and $ 29,048,164 as of December 31, 2022 and 2021, respectively.

For identified

definite lived intangible assets, accumulated impairment amounted to $ 1.4 million and $ — as of December 31, 2021 and 2020, respectively.

For identified definite lived intangible assets, accumulated amortization amounted to $ 0.6 million and $ 0.1 million as of December 31,

definite lived intangible assets, impairment losses amounted to $ — and $ 1,404,892 as of December 31, 2022 and 2021, respectively.

For identified definite lived intangible assets, amortization expense amounted to $ 168,750 and $ 643,333 during the years ended December

31, 2022 and 2021, respectively.

The impairment loss charged to definite lived intangible assets was determined by the Company’s assessment

of the related intangible assets being not materially relevant in current and future research and development operations, thereby necessitating

an impairment equal to the full carrying value as of December 31, 2021.

Company amortizes definite lived intangible assets on a straight-line basis over their

estimated useful lives.

Amortization expense of identified intangible assets based on the carrying amount as of December 31, 2021

is as follows:

For identified definite lived intangible assets, accumulated amortization amounted to $ 295,314 and $ 126,564 as of December 31, 2022 and

2021, respectively.

goodwill, aggregate impairment amounted to $ 9,711,922 and $ 8,225,862 as of December 31, 2022 and 2021, respectively.

For the identified

indefinite lived assets, aggregate impairment amounted to $ 35,015,766 and $ 29,048,164 as of December 31, 2022 and 2021, respectively.

For identified definite lived intangible assets, aggregate impairment amounted to $ 1,404,892 as of December 31, 2022 and 2021.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company amortizes definite lived intangible assets on a straight-line basis over their estimated useful lives.

Amortization expense

of identified intangible assets based on the carrying amount as of December 31, 2022 is as follows:

OF FINITE LIVED INTANGIBLE ASSETS AMORTIZATION EXPENSE

17 unchanged sentences

first right, but not the obligation, to negotiate an agreement with Diverse for such cannabinoids.

The Company has also agreed to pay

Diverse an up-front investment payment in the amount of $ 675,000 ,

as well as a running royalty starting with the first commercial sale by the Company to a third party in an arm’s length

The Company agreed to pay Diverse

an up-front investment payment in the amount of $ 675,000 , as well as a running royalty starting with the first commercial sale by the

Company to a third party in an arm’s length transaction.

term of the DB Agreement shall continue for as long as the Company intends to develop or commercialize the new drugs, unless earlier

7 unchanged sentences

Inc (“EBCI”), with all amounts translated into U.S.

OF PROPERTY PLANT AND EQUIPMENT NET OF ACCUMULATED DEPRECIATION

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT NET OF ACCUMULATED DEPRECIATION

Lab equipment

equipment and leasehold improvements

and Equipment, gross

1 unchanged sentence

and equipment, net of accumulated depreciation

expense was $ 13,310 and

$ — for the years ended December 31, 2021 and 2020, respectively.

of December 31, 2021 and 2020 the Company had no notes payable or convertible notes payable.

the year ended December 31, 2020 interest expense and amortization of debt discount consisted of the following:

SCHEDULE OF INTEREST EXPENSE AND AMORTIZATION OF DEBT DISCOUNT

of Debt Discount

February 2019 Note

April 2019 Convertible Notes

July 2019 Note

December 2019 Note

February 2020 Note

expense incurred by the Company was $ 10,316 and $ 156,619 for the years ended December 31, 2021 and 2020, respectively.

of debt discount was $ —

and $ 288,631

for the years ended December 31, 2021

and 2020, respectively.

February 7, 2019, the Company received $ 60,000 in exchange for a promissory note with a director for $ 66,000 , including an original issue

discount of $ 6,000 (the “February 2019 Note”).

The note had no stated interest rate and was due on May 8, 2019.

amortized the full $ 6,000 original issue discount in the statement of operations and comprehensive loss through December 31, 2019.

July 21, 2020, the Company converted the February 2019 Note into common stock.

February 1, 2019, the Company entered into a consulting agreement with its former executive director.

In connection with the consulting

agreement, on March 5, 2019, the Company issued a note payable to its former executive director for $ 150,000 (the “March 2019 Note”).

The note had no interest and was due and payable on March 4, 2020 .

The consulting agreement expired on February 1, 2020.

2020, the Company converted the March 2019 Note into common stock.

July 8, 2019, the Company entered into a note agreement (the “July 2019 Note”) with a limited liability company (the “Lender”).

One of the principals of the Lender is the brother of a former member of the Company’s Board of Directors.

The Note’s face

value was $ 157,714

and the original issue discount was $ 19,714

for total gross proceeds of $ 138,000 ,

implying an interest rate of 12.5 %

The Company could, without premium or penalty, at any time and from time to time, prepay all or any portion of the Note.

maturity date of the Note was September

On September 20, 2019, the

Company entered into an amendment to the July 2019 Note (the “Amendment”).

The Amendment extended the maturity date for the

Note until the earlier of (a) the completion of a bridge financing of greater than or equal to $1,500,000, or (b) November 7, 2019 .

On November 21, 2019, the

Company entered into an amendment for the July 2019 Note that extended the maturity date for the Note until the earlier of (a) the completion

of a bridge financing of greater than or equal to $1,500,000, or (b) December 9, 2019 .

In consideration for this amendment, the Company agreed to pay an aggregate extension fee of $33,926, which was added to the principal

balance of the note.

On December 9, 2019, the

Company entered into an additional amendment for the July 2019 Note that extended the maturity date for the Note until the earlier of

(a) the completion of a bridge financing of greater than or equal to $1,500,000, or (b) January 7, 2020 .

The Company also agreed to pay the previously outstanding extension fees of $ 33,926

on or before March 1, 2020.

January 8, 2020 the Company entered into an amendment to the July 2019 Note (the “January 8 Amendment”).

January 8 Amendment extended the maturity date for the July 2019 Note until the (a) the completion of a bridge financing of greater than

or equal to $1,500,000, or (b) April 1, 2020 .

In consideration for the January 8 Amendment, the Company granted 55,000

shares of the Company’s common stock to

The Company accounted for this amendment as a modification, where the shares paid as a fee were valued at $ 45,725

and recorded as a discount against the note payable

and amortization over the term.

On May 6, 2020, the

Company entered into an amendment (the “May 2020 Amendment”) whereby both parties agreed to extend the maturity date of the

July 2019 Note to September 30, 2020.

The Company accounted for this amendment as a modification, as the present value of the future

cash flows pre-modification and post-modification were not greater than or equal to 10% .

On January 12, 2020, the Company repaid $ 157,714

of the July 2019 Note.

On December 31, 2020 the

Company paid the remaining unpaid balance.

December 12, 2019, the Company received $ 40,000

in exchange for a promissory note with a lender,

including an original issue discount of $ 4,000

(the “December 2019 Note”).

2019 Note bore interest at a rate of ten percent ( 10 %)

on its face value per annum.

In the case of an event of default, the interest rate would increase to 24 %

The December 2019 Note matured on January

The promissory note with the lender

and the Company was converted into 170,333

shares of common stock on December 30, 2020.

February 24, 2020, the Company received $ 50,000

in exchange for a promissory note with a lender

(the “February 2020 Note”).

The February 2020 Note bore interest at a rate of 10 %

on its face value per annum.

In the case of an event of default, the interest rate would increase to 24 %

The note matured on July 31, 2020.

The February 2020 Note was convertible into the Company’s common stock at any time

at a conversion price of $ 0.38

The Company recorded a beneficial

conversion feature of $ 17,851

and valued the warrants issued (using relative

fair value) at $ 32,149 .

The Company recorded the total value as a note discount and is amortizing the discount over the term of the February 2020 Note using

the effective interest method.

The Company valued the beneficial conversion feature and warrants using the following assumptions:

OF BENEFICIAL CONVERSION FEATURE AND WARRANTS

Average Risk-Free Interest Rate

December 30, 2020, the February 2020 Note was converted into 190,004

shares of common stock.

Company entered into a Secured Promissory Note, dated January 10, 2020 (the “Note”), by and among Enveric Biosciences, Inc.

and Alpha Capital Anstalt (“Alpha”), pursuant to which, on January 10, 2020, Enveric Biosciences, Inc.

received aggregate

gross proceeds of $ 1,500,000 .

Pursuant to the Note, the aggregate obligations of Enveric Biosciences, Inc.

under the Note were automatically, immediately prior to

the consummation of the amalgamation, converted into shares of Enveric Biosciences, Inc.

common stock, subject to the terms and provisions

Pursuant to the Note, upon conversion of the term loans made by the lenders subject to the terms of the Note, Enveric Biosciences,

was required to cause Ameri to issue each lender warrants to purchase Ameri Common Stock.

Upon consummation of the amalgamation,

Enveric Biosciences, Inc.

agreed to cause Ameri to register the resale of the warrant shares.

The Note bore interest at 7 %

per annum and was due on March

May 6, 2020, the Company entered into an amendment to the Note (the “First Note Amendment”).

Pursuant to the First Note Amendment,

Alpha waived previous defaults on the Note, and extended the maturity date of the Note to June

In exchange for the First Note Amendment,

the Company and Alpha agreed that (i) at the Effective Time, Ameri would issue to the holder of a certain note issued by Enveric Biosciences,

Inc., series B warrants (the “Series B Warrants”) to acquire 8,100,000

shares of common stock of the Company resulting

from the amalgamation, and (ii) providing for certain registration rights, pursuant to a registration rights agreement, of the Series

B Warrants and the shares issuable upon exercise of the Series B Warrants.

The Series B Warrants shall be exercisable for a period of

five years commencing on the ninetieth (90th) day after the later of the last day of the Lock-up Period and leak-out Period (accelerated

or otherwise) set forth in the Lock-up agreement to be executed by the holders of Enveric Biosciences, Inc.

securities in connection

with the Amalgamation, at a price of $ 0.01

per share, and shall also be exercisable on a

cashless basis.

Pursuant to the preceding, the Series B Warrants were converted into warrants to purchase 1,791,923 shares

of the Company’s Common Stock, at an exercise price of $ 0.01 per share.

The Series B Warrants were exercised in full during April

June 23, 2020, the Company and Alpha entered into a second amendment to the Note (the “Second Note Amendment”).

Note Amendment revised the principal amount of the Note from $ 1,500,000

to $ 2,000,000 ,

which was advanced as of the date of the Second Note Amendment.

The rights and securities granted to Alpha under the terms of the Note

were extended to the additional $ 500,000

advance contemplated by the Second Note Amendment

pursuant to the terms of the Second Note Amendment.

August 12, 2020, the Company and Alpha entered into the Third Note Amendment.

The Third Note Amendment extended the maturity date to

be the earlier of (a) January 1, 2021 and (b) an event of default that accelerates the maturity of the Note.

The Third Note Amendment

also revised the Note to account for the change in structure from an amalgamation to a stock-for-stock exchange offer.

As a result, references

to the Amalgamation Agreement and the amalgamation were revised to be references to the Tender Agreement and the Offer.

The Third Note

Amendment also revised the event of default regarding a failure of the amalgamation to be consummated by March 31, 2020 to be an event

of default if the Offer was not consummated by January 1, 2021.

December 30, 2020, the Note in the amount of $ 2,000,000

was converted into 2,473,848

shares of common stock.

expense was $ 159,160 and $ 13,310 for the years ended December 31, 2022 and 2021, respectively.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

ACCRUED LIABILITIES

of December 31, 2022 and December 31, 2021, the accrued liabilities of the Company consisted of the following:

OF ACCRUED LIABILITIES

Product development

Accrued salaries and wages

Professional fees

accrued expenses

SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

holders of the Company’s common stock (“Common Stock”) are entitled to one vote per share .

Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally

available funds.

Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share ratably

in all assets of the Company that are legally available for distribution.

As of December 31, 2021 and December 31, 2020, 100,000,000

shares of common stock were authorized under

the Company’s articles of incorporation.

December 30, 2020, the Company amended its articles of incorporation to designate and authorize 20,000,000 shares of preferred

The Company issued Series B preferred stock (“Series B Preferred Stock), which has a certificate of designation

authorizing issuance of 3,600,000 preferred shares.

The Series B Preferred Stock is convertible by the holder at any time

into common stock at a rate of one to one.

holders of the Company’s common stock are entitled to one vote per share.

Holders of common stock are entitled to receive ratably

such dividends, if any, as may be declared by the Board of Directors out of legally available funds.

Upon the liquidation, dissolution,

or winding up of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available

for distribution.

As of December 31, 2022, 100,000,000 shares of common stock were authorized under the Company’s articles of incorporation.

December 30, 2020, the Company amended its articles of incorporation to designate and authorize 20,000,000 shares of preferred stock.

The Company issued Series B preferred stock (“Series B Preferred Stock), which has a certificate of designation authorizing issuance

of 3,600,000 preferred shares.

During the year ended December 31, 2021, holders of an aggregate of 3,275,407 shares of Series B Preferred

Stock converted their shares into 65,509 shares of common stock.

Following those conversions, no Series B Preferred stock shares remain

C Preferred Shares

May 3, 2022, the Board of Directors (the “Board”) declared a dividend of one one-thousandth of a share of the Company’s

Series C Preferred Stock (“Series C Preferred Stock”) for each outstanding share of the Company’s Common Stock (the

“Common Stock”) held of record as of 5:00 p.m.

Eastern Time on May 13, 2022 (the “Record Date”).

This dividend

was based on the number of outstanding shares of Common Stock prior to the Reverse Stock Split.

The outstanding shares of Series C Preferred

Stock were entitled to vote together with the outstanding shares of the Company’s Common Stock, as a single class, exclusively

with respect to a proposal giving the Board the authority, as it determines appropriate, to implement a reverse stock split within twelve

months following the approval of such proposal by the Company’s stockholders (the “Reverse Stock Split Proposal”),

as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Reverse Stock Split Proposal (the

“Adjournment Proposal”).

Company held a special meeting of stockholders on July 14, 2022 (the “Special Meeting”) for the purpose of voting on, among

other proposals, a Reverse Stock Split Proposal and an Adjournment Proposal.

All shares of Series C Preferred Stock that were not present

in person or by proxy at the Special Meeting were automatically redeemed by the Company immediately prior to the opening of the polls

at Special Meeting (the “Initial Redemption”).

All shares that were not redeemed pursuant to the Initial Redemption were

redeemed automatically upon the approval by the Company’s stockholders of the Reverse Stock Split Proposal at the Special Meeting

(the “Subsequent Redemption” and, together with the Initial Redemption, the “Redemption”).

Each share of Series

C Preferred Stock was entitled to receive $0.10 in cash for each 10 whole shares of Series C Preferred Stock immediately prior to the

As of June 30, 2022, there were 52,684.548 shares of Series C Preferred Stock issued and outstanding.

As of December 31,

2022, both the Initial Redemption and the Subsequent Redemption have occurred.

As a result, no shares of Series C Preferred Stock remain

As of December 31, 2022, there are 100,000 shares of Series C Preferred Stock authorized for future issuances.

Stock Activity

the year ended December 31, 2020, the Company issued 433,047

shares of common stock to various vendors in

connection with the payment of accounts payable of $ 756,523 .

The shares were valued at the book value of the accounts payable, as that value was more readily determinable.

July 21, 2020, the Company issued 239,326

shares of common stock in exchange for the February

2019 Note (face value of $ 66,000 ),

the March 2019 Note (face value of $ 150,000 )

and related party advances in the amount of $ 22,000 .

Given that the holder of these notes and advances is a related party, this was treated as a capital transaction and no gain or loss was

September 25, 2020, the Company issued 36,871

shares of its common stock for gross proceeds

and net proceeds of $ 227,500 .

the year ended December 31, 2020, 571,987

shares of Common Stock, valued at $ 1,900,546

were issued to Tikkun Pharma Inc.

as consideration

for their assignment of rights to certain skin care treatment assets and intellectual property rights to certain formulations.

aggregate purchase price was $ 1,944,689 , including cash considerations of $ 44,143 .

January 14, 2021, the Company completed an offering of 2,221,334

shares of Common Stock and pre-funded warrants

at approximately $ 4.50

per share and a concurrent private placement

of warrants to purchase 1,666,019

shares of Common Stock at $ 4.95

per share, exercisable immediately and terminating

years after the date of issuance for gross proceeds

of approximately $ 10,000,000 .

The net proceeds to the Company after deducting financial advisory fees and other costs and expenses were approximately $ 8,800,087 ,

with $ 4,617,087

of such amount allocated to share capital and

allocated to warrant liability and the remaining

recorded as an expense.

February 11, 2021, the Company completed an offering of 3,007,026

shares of Common Stock and a concurrent private

placement of warrants to purchase 1,503,513

shares of Common Stock at $ 4.90

per share, exercisable immediately and terminating

year from the date of issuance for gross proceeds

of approximately $ 12,800,000 .

The net proceeds to Enveric from the offering after deducting financial advisory fees and other costs and expenses were approximately

$ 11,624,401 ,

with $ 7,016,401

of such amount allocated to share capital and

allocated to warrant liability and the remaining

recorded as an expense.

September 16, 2021, the Company, in connection with the Amalgamation Agreement entered into on May 24, 2021, acquired MagicMed

Industries Inc., and its wholly owned subsidiary MagicMed USA, Inc.

The Company issued a total of 9,951,217

shares of Common Stock, valued at $ 39,042,282

February 15, 2022, the Company completed a public offering of 400,000 shares of Common Stock and warrants to purchase up to 400,000 shares

of Common Stock for gross proceeds of approximately $ 10 million, before deducting underwriting discounts and commissions and other offering

A.G.P./Alliance Global Partners acted as sole book-running manager for the offering.

In addition, Enveric granted the underwriter

a 45-day option to purchase up to an additional 60,000 shares of Common Stock and/or warrants to purchase up to an additional 60,000

shares of Common Stock at the public offering price, which the underwriter has partially exercised for warrants to purchase up to 60,000

shares of common stock.

At closing, Enveric received net proceeds from the offering of approximately $ 9.1 million, after deducting underwriting

discounts and commissions and estimated offering expenses with $ 5.8 million allocated to equity, $ 3.6 million to warrant liability and

the remaining $ 0.3 million recorded as an expense.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

July 22, 2022, the Company entered into a securities purchase agreement (the “Registered Direct Securities Purchase Agreement”)

with an institutional investor for the purchase and sale of 116,500 shares of the Company’s common stock, pre-funded warrants to

purchase up to 258,500 shares of common stock (the “RD Pre-Funded Warrants”), and unregistered preferred investment options

(the “RD Preferred Investment Options”) to purchase up to 375,000 shares of common stock (the “RD Offering”).

The gross proceeds from the RD Offering were approximately $ 3,000,000 .

to certain ownership limitations, the RD Pre-Funded Warrants became immediately exercisable at an exercise price equal to $ 0.0001 per

share of common stock.

On August 3, 2022, all of the issued RD Pre-Funded Warrants were exercised.

with the RD Offering, the Company entered into a securities purchase agreement (the “PIPE Securities Purchase Agreement”)

with institutional investors for the purchase and sale of 116,000 shares of common stock, pre-funded warrants to purchase up to 509,000

shares of common stock (the “PIPE Pre-Funded Warrants”), and preferred investment options (the “PIPE Preferred Investment

Options”) to purchase up to 625,000 shares of the common stock in a private placement (the “PIPE Offering”).

proceeds from the PIPE Offering were approximately $ 5,000,000 .

to certain ownership limitations, the PIPE Pre-Funded Warrants became immediately exercisable at an exercise price equal to $ 0.0001 per

share of common stock.

All of the issued PIPE Pre-Funded Warrants were exercised on various dates prior to August 18, 2022.

RD offering and PIPE Offering closed on July 26, 2022, with aggregate gross proceeds of approximately $ 8 million.

The aggregate net proceeds

from the offerings, after deducting the placement agent fees and other estimated offering expenses, were approximately $ 7.1 million with

$ 3.2 million allocated to equity, $ 4.3 million to investment option liability, and the remaining $ 0.4 million recorded as an expense.

the year ended December 31, 2022, a total of 1,223 and 899 shares of Common Stock were issued pursuant to the conversion of restricted

stock awards and restricted stock units, respectively.

January 14, 2021, the Company completed an offering of 44,427 shares of Common Stock and pre-funded warrants at approximately $ 225.00

per share and a concurrent private placement of warrants to purchase 33,321 shares of Common Stock at $ 247.50 per share, exercisable

immediately and terminating five years after the date of issuance for gross proceeds of approximately $ 10,000,000 .

The net proceeds to

the Company after deducting financial advisory fees and other costs and expenses were approximately $ 8,800,087 , with $ 4,617,087 of such

amount allocated to share capital and $ 4,846,000 allocated to warrant liability and the remaining $ 663,000 recorded as an expense.

February 11, 2021, the Company completed an offering of 60,141 shares of Common Stock and a concurrent private placement of warrants

to purchase 1,503,513 shares of Common Stock at $ 245.00 per share, exercisable immediately and terminating five year from the date of

issuance for gross proceeds of approximately $ 12,800,000 .

The net proceeds to Enveric from the offering after deducting financial advisory

fees and other costs and expenses were approximately $ 11,624,401 , with $ 7,016,401 of such amount allocated to share capital and $ 5,135,000

allocated to warrant liability and the remaining $ 527,000 recorded as an expense.

September 16, 2021, the Company, in connection with the Amalgamation Agreement entered into on May 24, 2021, acquired MagicMed Industries

Inc., and its wholly owned subsidiary MagicMed USA, Inc.

The Company issued a total of 199,025 shares of Common Stock, valued at $ 39,042,282

on the date of closing.

for further details.

the year ended December 31, 2021, a total of 2,643,047

Common Shares were issued pursuant to exercise

of warrants to purchase Common Stock for cash proceeds totaling $ 3,285,171 .

the year ended December 31, 2021, a total of 134,246

Common Shares were issued pursuant to cashless

exercise of options to purchase Common Stock.

the year ended December 31, 2021, a total of 1,015,315

Common Shares as inducement for the conversion

of certain warrants and options.

See Note 3 for further details.

the year ended December 31, 2021, a total of 55,861 Common Shares were issued pursuant to exercise of warrants to purchase Common Stock

for cash proceeds totaling $ 3,285,171 .

the year ended December 31, 2021, a total of 2,685 Common Shares were issued pursuant to cashless exercise of options to purchase Common

the year ended December 31, 2021, a total of 20,307 Common Shares were issued as inducement for the conversion of certain warrants and

The Company recognized an inducement expense of $ 1,125,291 in relation to these issuances.

the year ended December 31, 2021, the Company issued 14,121

shares to a consultant in exchange for services

valued at $ 33,467 .

the year ended December 31, 2021, the Company issued a total of 221,653

shares of Common Stock pursuant to exercise of

put rights contained in warrants originally issued by Ameri and assumed by the Company.

and Conversion of Series B Preferred

December 8, 2020, the Company issued 221,225 shares of its Series B preferred stock for gross proceeds of $ 300,000 and net proceeds of

the year ended December 31, 2020, the Company issued a total of 250,000

shares of Common Stock pursuant to the conversion

the year ended December 31, 2021, the Company issued 283 shares to a consultant in exchange for services valued at $ 33,467 .

the year ended December 31, 2021, the Company issued a total of 4,434 shares of Common Stock pursuant to exercise of put rights contained

in warrants originally issued by Ameri and assumed by the Company.

and Conversion of Series B Preferred Shares

the year ended December 31, 2021, the Company issued a total of 65,509 shares of Common Stock pursuant to the conversion of 3,275,407

shares of Series B Preferred Stock.

the year ended December 31, 2021, the

Company issued a total

of 3,275,407 shares of Common Stock pursuant to the conversion of 3,275,407 shares of Series

B Preferred Stock.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

to 2020 Long-Term Incentive Plan

May 3, 2022, our Board adopted the First Amendment (the “Plan Amendment”) to the Enveric Biosciences, Inc.

2020 Long-Term

Incentive Plan (the “Incentive Plan”) to (i) increase the aggregate number of shares available for the grant of awards by

146,083 shares to a total of 200,000 shares, and (ii) add an “evergreen” provision whereby the number of shares authorized

for issuance pursuant to awards under the Incentive Plan will be automatically increased on the first trading date immediately following

the date the Company issues any share of Common Stock (defined below) to any person or entity, to the extent necessary so that the number

of shares of the Company’s Common Stock authorized for issuance under the Incentive Plan will equal the greater of (x) 200,000

shares, and (y) 15% of the total number of shares of the Company’s Common Stock outstanding as of such issuance date.

Amendment was approved by the Company’s stockholders at a special meeting of the Company’s stockholders held on July 14,

summary of activity under the Company’s incentive plan for the years ended December 31, 2022 and 2021 is presented below:

OF STOCK OPTIONS

Average Grant Date

Outstanding –

January 1, 2020

SCHEDULE OF STOCK OPTION

Average Exercise Price

Average Grant Date Fair Value

Average Remaining Contractual Term (years)

Intrinsic Value

Outstanding at December 31, 2020

Options assumed pursuant to acquisition of

Expired, forfeited,

– December 31, 2020

assumed pursuant to acquisition of MagicMed

forfeited, or cancelled

– December 31, 2021

at December 31, 2021

During the year ended December

31, 2021, 143,976 options were exercised via a cashless exercise resulting in the issuance of 134,246 shares of common stock.

granted during the years ended December 31, 2021 and 2020 were valued using the Black Scholes model with the following

Outstanding at December 31, 2021

Outstanding at December 31, 2022

Exercisable at December 31, 2022

the years ended December 31, 2022 and 2021, — and 2,876 options were exercised via a cashless exercise resulting in the issuance

of — and 2,685 shares of common stock.

granted during the years ended December 31, 2022 and 2021 were valued using the Black Scholes model with the following assumptions:

SCHEDULE OF STOCK OPTION ASSUMPTION

free interest rate

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

above assumptions are determined by the Company as follows:

3 unchanged sentences

stock options.

yield —The Company has not paid any dividends on common stock since its inception and

does not anticipate paying dividends on its common stock in the foreseeable future.

yield — The Company has not paid any dividends on common stock since its inception

and does not anticipate paying dividends on its common stock in the foreseeable future.

volatility — Based on the historical volatility of comparable companies in a similar

4 unchanged sentences

and expected term for “plain vanilla” share options.

Company’s stock-based compensation expense related to stock options for the years ended December 31, 2021 and 2020 was $ 60,856

and $ 1,977,155 ,

respectively.

As of December 31, 2021, the Company

had $ 497,384

in unamortized stock option expense with a weighted

average amortization period equal to 2.6

the first quarter 2021, the Company exchanged options to purchase 560,404

shares of common stock for 325,410

restricted stock units and 42,125

restricted stock awards.

In connection with this

exchange, the Company recognized $ 298,714

in inducement expense related to the increase

in fair value of the new awards over the old awards, which is included in other expenses on the Company’s consolidated statement

of operations and comprehensive loss.

Company’s activity in restricted common stock was as follows for the year ended December 31, 2021 (there was no restricted

common stock issued for the year ended December 31, 2020):

OF RESTRICTED STOCK UNITS AND AWARDS ACTIVITY

at January 1, 2021

at December 31, 2021

the year ended December 31, 2021 and 2020, the Company recorded $ 231,631

and $ — , in stock-based compensation

expense related to restricted stock awards, respectively.

As of December 31, 2021, unamortized stock-based compensation costs related

to restricted share awards was $ 24,263 ,

which will be recognized over a weighted average

period of 0.6

An aggregate of 42,125 Common Shares

have been issued in relation to vested restricted stock awards.

The balance of Common Shares related to the vested restricted stock awards

as of December 31, 2021 will be issued during the subsequent calendar year.

Company’s stock based compensation expense, recorded within general and administrative expense, related to stock options for the

years ended December 31, 2022 and 2021 was $ 180,042 and $ 60,856 , respectively.

As of December 31, 2022, the Company had $ 240,850 in unamortized

stock option expense, which will be recognized over a weighted average period of 1.9 years.

the year ended December 31, 2021, the Company exchanged options to purchase 11,209 shares of common stock for 6,509 restricted stock

units and 843 restricted stock awards.

In connection with this exchange, the Company recognized $ 298,714 in inducement expense related

to the increase in fair value of the new awards over the old awards, which is included in other expenses on the Company’s consolidated

statement of operations and comprehensive loss.

Company’s activity in restricted common stock was as follows for the years ended December 31, 2022 and 2021:

OF RESTRICTED COMMON STOCK AND AWARDS ACTIVITY

average fair value

Non-vested at December 31, 2020

Non-vested at December 31, 2021

Non-vested at December 31, 2022

the years ended December 31, 2022 and 2021, the Company recorded $ 24,363 and $ 231,631 , respectively, in stock-based compensation expense

within general and administrative expense, related to restricted stock awards.

As of December 31, 2022, there were no unamortized stock-based

compensation costs related to restricted share awards.

The balance of Common Shares related to the vested restricted stock awards as

of December 31, 2022 will be issued during the 2023 calendar year.

There are 708 vested and unissued shares of restricted stock awards

as of December 31, 2022.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

of Restricted Stock Units

Company’s activity in restricted stock units was as follows for the year ended December 31, 2021 (there were no restricted

stock units issued for the year ended December 31, 2020):

OF RESTRICTED STOCK UNITS AND AWARDS ACTIVITY

at January 1, 2021

( 2,785,820 )

at December 31, 2021

the year ended December 31, 2021 and 2020, the Company recorded $ 12,304,514

and $ — , respectively, in stock-based

compensation expense related to restricted stock units, with $ 11,463,870

included as a component of general and administrative

expenses and $ 840,644

included as a component of research and development

costs in the consolidated statement of operations.

As of December 31, 2021, the Company had unamortized stock-based compensation costs

related to restricted stock units of $ 7,774,089

which will be recognized over a weighted

average period of 3.4

years and unamortized stock-based

costs related to restricted stock units.

As of December 31, 2021, no shares of Common Stock have been issued in relation

to vested restricted stock units.

As of the end of the

fiscal year ended December 31, 2021, there were 5,886,433

shares of common stock underlying outstanding restricted stock units, of which (i) 2,785,820

shares are underlying vested restricted stock units and issuable, subject to certain conditions for settlement, which includes

either termination of employment with the Company or a change of control, and of which 297,635

shares may not be issued until the Enveric Biosciences, Inc.

2020 Long-Term Equity Incentive Plan (the “Long-Term Incentive

Plan”), which currently has no shares available for issuance and is short of shares to cover all of the outstanding restricted

stock units, is amended to increase the number of shares authorized for issuance of awards under the Long-Term Incentive Plan upon

approval by the Company’s stockholders and (ii) 3,100,613

shares are issuable upon the vesting of such restricted stock units, subject to achievement of vesting conditions, certain conditions of settlement which includes either termination of employment

with the Company or a change of control, and further

subject to the increase in the number of shares authorized for issuance of awards under the Long-Term Incentive Plan upon approval

by the Company’s stockholders.

following table summarizes information about shares issuable under warrants outstanding at December 31, 2021:

exercise price

Company’s activity in restricted stock units was as follows for the year ended December 31, 2022:

SCHEDULE OF RESTRICTED STOCK UNITS AND AWARDS ACTIVITY

average fair value

Non-vested at December 31, 2020

Non-vested at December 31, 2021

Non-vested at December 31, 2022

the years ended December 31, 2022 and 2021, the Company recorded $ 2,416,266 and $ 12,304,514 , respectively, in stock-based compensation

expense related to restricted stock units, which is a component of both general and administrative and research and development expenses

in the consolidated statement of operations and comprehensive loss.

of December 31, 2022, the Company had unamortized stock-based compensation costs related to restricted stock units of $ 3,225,701 which

will be recognized over a weighted average period of 2.8 years and unamortized stock-based costs related to restricted stock units which

will be recognized upon achievement of specified milestones.

of December 31, 2022, 1,856 shares of Common Stock have been issued in relation to vested restricted stock units and 62,492 restricted

stock units are vested without shares of Common Stock being issued.

following table summarizes the Company’s recognition of stock-based compensation for restricted stock units for the following periods:

SCHEDULE OF STOCK-BASED COMPENSATION FOR RESTRICTED STOCK UNITS

ended December 31,

Stock-based compensation for

General and administrative

Research and development

of the end of the fiscal years ended December 31, 2022 and 2021, there were 126,545 and 117,730 shares of common stock underlying outstanding

restricted stock units, of which (i) 62,492 and 55,717 shares are underlying vested restricted stock units and issuable, subject to certain

conditions for settlement, which includes either termination of employment with the Company or a change of control, and (ii) 64,053 and

62,013 shares are issuable upon the vesting of such restricted stock units, subject to achievement of vesting conditions, certain conditions

of settlement which includes either termination of employment with the Company or a change of control, and further subject to the increase

in the number of shares authorized for issuance of awards under the Long-Term Incentive Plan upon approval by the Company’s stockholders.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

following table summarizes information about shares issuable under warrants outstanding at December 31, 2022 and 2021:

OF WARRANTS OUTSTANDING

shares outstanding

average exercise price

average remaining life

at January 1, 2021

pursuant to acquisition of MagicMed

( 3,253,714 )

Exchanged for common stock

at December 31, 2021

The warrants assumed pursuant

to the acquisition of MagicMed contain certain down round features, which were not triggered by the February 2022 public offering,

that would require adjustment to the exercise price upon certain events when the offering price is less than the stated exercise

outstanding warrants are exercisable.

exchanged for Common Stock consist of an aggregate of 221,653 shares of Common Stock being issued in exchange for an aggregate of 109,372

warrants issued by Ameri and containing put rights that were exercised by the Holder and an aggregate of 973,190 shares of Common Stock

being issued in exchange for an aggregate of 658,771 warrants containing certain terms wherein management determined it to be beneficial

to the Company to exchange Common Shares for these warrants.

aggregate of 221,653 Common Shares issued in exchange for the aggregate of 109,372 warrants issued by Ameri and containing put rights

were issued in lieu of cash payments, in accordance with the terms of the put rights contained in the warrants.

aggregate of 973,190 shares of common stock issued in exchange for certain outstanding warrants to purchase an aggregate of 658,771

shares of the Company’s common stock at an exercise price of $ 4.66 were issued pursuant to exchange agreements with the holders

of such warrants.

Outstanding at December 31, 2020

Assumed pursuant to acquisition of MagicMed

Exchanged for common

Outstanding at December 31, 2021

Exchanged for common

Outstanding at December 31, 2022

Exercisable at December 31, 2022

February 11, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with A.G.P./Alliance

Global Partners (the “Underwriter”).

Pursuant to the Underwriting Agreement, the Company agreed to sell, in a firm commitment

offering, 400,000 shares of the Company’s Common Stock and accompanying warrants to purchase up to an aggregate of 400,000 shares

of its common stock (“February 2022 Warrants”), as well as up to 60,000 additional shares of common stock and/or warrants

to purchase an aggregate of up to 60,000 shares of its common stock that may be purchased by the Underwriter pursuant to a 45-day option

granted to the Underwriter by the Company (the “Offering”).

Each share of common stock was sold together with a common warrant

to purchase one share of common stock, at an exercise price of $ 27.50 per share.

Such common warrants were immediately exercisable and

will expire five years from the date of issuance.

There is not expected to be any trading market for the common warrants issued in the

The combined public offering price of each share of common stock and accompanying common warrant sold in the Offering was $ 25.00 .

On February 14, 2022, the Underwriter exercised its option to purchase an additional 60,000 warrants.

connection with the Registered Direct (“RD”) Offering and the Private Investment in Public Entity (“PIPE”) Offering

entered into on July 22, 2022, the Company entered into Warrant Amendment (the “Warrant Amendments”) with the investors in

both offerings to amend certain existing warrants to purchase up to an aggregate of 122,000 shares of Common Stock that were previously

issued to the investors, with an exercise price of $ 27.50 per share (subsequent to the 1-for-50 reverse stock split that occurred on

July 14, 2022) and expiration date of February 15, 2027 .

Pursuant to the Warrant Amendments, the previously issued warrants were amended,

effective upon the closing of the offerings, so that the amended warrants have a reduced exercise price of $ 7.78 per share and expire

five and one-half years following the closing of the offerings.

connection with this transaction, the Company determined the fair value of the February 2022 Warrants immediately prior to the Warrant

Amendment and the fair value of the amended warrants immediately after the Warrant Amendment.

The incremental change in fair value was

deemed to be $ 251,357 , which was included as equity issuance costs related to the RD and PIPE financing transactions.

warrants assumed pursuant to the acquisition of MagicMed contain certain down round features, which were not triggered by the February

2022 and July 2022 public offerings, that would require adjustment to the exercise price upon certain events when the offering price

is less than the stated exercise price.

the year ended December 31, 2021, warrants exchanged for Common Stock consisted of an aggregate of 4,434 shares of Common Stock being

issued in exchange for an aggregate of 2,188 warrants issued by Ameri and containing put rights that were exercised by the Holder and

an aggregate of 19,464 shares of Common Stock being issued in exchange for an aggregate of 13,176 warrants containing certain terms wherein

management determined it to be beneficial to the Company to exchange Common Shares for these warrants.

aggregate of 4,434 Common Shares issued in exchange for the aggregate of 2,188 warrants issued by Ameri and containing put rights were

issued in lieu of cash payments, in accordance with the terms of the put rights contained in the warrants.

aggregate of 19,464 shares of common stock issued in exchange for certain outstanding warrants to purchase an aggregate of 13,176 shares

of the Company’s common stock at an exercise price of $ 233.00 were issued pursuant to exchange agreements with the holders of such

The Company believes that these exchanges are beneficial to the Company because the reacquired warrants contained provisions

4 unchanged sentences

not be reissued.

In connection with this exchange, the Company recognized $ 826,577 in inducement expense related to the increase in

fair value of the new awards over the old awards, which is included in other expenses on the Company’s consolidated statement of

operations and comprehensive loss.

following table summarizes information about shares issuable under warrants outstanding at December 31, 2020:

Average Exercise Price (USD)

Average Remaining Contractual Term (years)

Intrinsic Value (USD)

– January 1, 2020

forfeited, or cancelled

– December 31, 2020

at December 31, 2020

In connection with this exchange, the Company recognized $ 826,577 in inducement expense related to the increase in fair

value of the new awards over the old awards, which is included in other expenses on the Company’s consolidated statement of operations

and comprehensive loss.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Investment Options

connection with the Registered Direct Securities Purchase Agreement the Company issued unregistered preferred investment options to purchase

up to 375,000 shares of common stock.

Subject to certain

ownership limitations, the RD Preferred Investment Options became immediately exercisable

at an exercise price equal to $ 7.78 per share of common stock.

The RD Preferred Investment Options

are exercisable for five and one-half years from the date of issuance.

connection with the PIPE Securities Purchase Agreement the Company issued unregistered preferred investment options to purchase up to

625,000 shares of the common stock.

Subject to certain

ownership limitations, PIPE Preferred Investment Options became immediately exercisable

at an exercise price equal to $ 7.78 per share of common stock.

The PIPE Preferred Investment Options

are exercisable for five and one-half years from the date of issuance.

July 26, 2022, in connection with the RD Offering and PIPE Offering, the Company issued preferred

investment options (the “Placement Agent Preferred Investment Options”) to an entity to purchase up to 70,000 shares of the

common stock for acting as a placement agent.

The Placement Agent Preferred Investment Options have substantially the same terms as the

RD Preferred Investment Options and the PIPE Preferred Investments Options, except the Placement Agent Preferred Investment Options have

an exercise price of $ 10.00 per share.

The Placement Agent Preferred Investment Options

are exercisable for five years from the date of the commencement of the RD Offering and PIPE Offering.

following table summarizes information about investment options outstanding at December 31, 2022 (there were no investment options issued

for the year ended December 31, 2021):

OF WARRANTS AND INVESTMENT OPTIONS

options outstanding

average exercise price

average remaining life

Outstanding at January 1, 2022

Outstanding at December 31, 2022

Exercisable at December 31, 2022

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

REDEEMABLE NON-CONTROLLING INTEREST

and Related Private Placement

connection with the planned Spin-Off, on May 5, 2022, Akos and the Company entered into the Akos Purchase Agreement with the Akos Investor,

pursuant to which Akos agreed to sell up to an aggregate of 5,000 shares of Akos Series A Preferred Stock, at price of $ 1,000 per share,

and Akos Warrants to purchase shares of Akos’ common stock, par value $ 0.01 per share (the “Akos Common Stock”), for

an aggregate purchase price of up to $ 5,000,000 .

The Akos Purchase Agreement is guaranteed by the Company.

Pursuant to the Akos Purchase

Agreement, Akos has issued 1,000 shares of the Akos Series A Preferred Stock to the Akos Investor in exchange for $ 1,000,000 on May 5,

The additional $ 4,000,000 will be received on or immediately prior to the Spin-Off.

The issuance of the Akos Series A Preferred

Stock results in RNCI (see Note 2).

Palladium Capital Advisors, LLC (“Palladium”) acted as placement agent for the Akos Private

Pursuant to the Akos Purchase Agreement, Akos has agreed to pay Palladium a fee equal to 9% of the aggregate gross proceeds

raised from the sale of the shares of the Akos Series A Preferred Stock and a non-accountable expense allowance of 1% of the aggregate

gross proceeds raised the sale of the Akos Series A Preferred Stock in the Akos Private Placement.

The fee due in connection with the

Akos Private Placement shall be paid to Palladium in the form of convertible preferred stock and warrants on similar terms to the securities

issued in the Akos Private Placement.

As of December 31, 2022, there have been no accruals recorded for the fees or warrants since the

closing of the spin-off is not probable.

Palladium is also entitled to warrants to purchase Akos Common Stock in an amount up to 8 % of

the number of shares of Akos Common Stock underlying the shares issuable upon conversion of the Akos Series A Preferred Stock.

of Akos Series A Preferred Stock

the Certificate of the Designations, Preferences and Rights of Series A Convertible Preferred Stock of Akos (the “Akos Series A

Preferred Certificate of Designations”), on or immediately prior to the completion of the spin-off of Akos into an independent,

separately traded public company listed on the Nasdaq Stock Market, the outstanding Akos Series A Preferred Stock will be automatically

converted into a number of shares of Akos Common Stock equal to 25 % of the then issued and outstanding Akos Common Stock, subject to

the Beneficial Ownership Limitation (as defined in the Akos Purchase Agreement).

Cumulative dividends on each share of Akos Series A

Preferred Stock accrue at the rate of 5 % annually.

Akos Series A Preferred Certificate of Designations provides that upon the earlier of (i) the one-year anniversary of May 5, 2022, and

only in the event that the Spin-Off has not occurred;

or (ii) such time that Akos and the Company have abandoned the Spin-Off or the

Company is no longer pursuing the Spin-Off in good faith, the holders of the Akos Series A Preferred Stock shall have the right (the

“Put Right”), but not the obligation, to cause Akos to purchase all or a portion of the Akos Series A Preferred Stock for

a purchase price equal to $ 1,000 per share, subject to certain adjustments as set forth in the Akos Series A Preferred Certificate of

Designations (the “Stated Value”), plus all the accrued but unpaid dividends per share.

In addition, after the one-year anniversary

of May 5, 2022, and only in the event that the Spin-Off has not occurred and Akos is not in material default of any of the transaction

documents, Akos may, at its option, at any time and from time to time, redeem the outstanding shares of Akos Series A Preferred Stock,

in whole or in part, for a purchase price equal to the aggregate Stated Value of the shares of Akos Series A Preferred Stock being redeemed

and the accrued and unpaid dividends on such shares.

Pursuant to the Akos Purchase Agreement, the Company has guaranteed the payment

of the purchase price for the shares purchased under the Put Right.

Akos Series A Preferred Certificate of Designations contains limitations that prevent the holder thereof from acquiring shares of Akos

Common Stock upon conversion of the Akos Series A Preferred Stock that would result in the number of shares of Akos Common Stock beneficially

owned by such holder and its affiliates exceeding 9.99% of the total number of shares of Akos Common Stock outstanding immediately after

giving effect to the conversion (the “Beneficial Ownership Limitation”), except that upon notice from the holder to Akos,

the holder may increase or decrease the limit of the amount of ownership of outstanding shares of Akos Common Stock after converting

the holder’s shares of Akos Series A Preferred Stock, provided that any change in the Beneficial Ownership Limitation shall not

be effective until 61 days following notice to Akos.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

for Akos Series A Preferred Stock

the shares of Akos Series A Preferred Stock are redeemable at the option of the holder and the redemption is not solely in the control

of the Company, the shares of Akos Series A Preferred Stock are accounted for as a redeemable non-controlling interest and classified

within temporary equity in the Company’s consolidated balance sheets.

The redeemable non-controlling interest was initially measured

at fair value.

Dividends on the shares of Akos Series A Preferred Stock are recognized as preferred dividends attributable to redeemable

non-controlling interest in the Company’s consolidated statement of operations and comprehensive loss.

table below presents the reconciliation of changes in redeemable non-controlling interest:

SCHEDULE OF RECONCILIATION CHANGE IN REDEEMBALE NONCONTROLLING INTEREST

Balance at December 31, 2021

non-controlling interest, net of initial value embedded derivative of $ 402,000 and net of issuance costs of $ 41,962

Preferred dividends attributable

to redeemable non-controlling interest

of embedded derivative and transaction costs associated with Series A Preferred Stock

Balance at December 31, 2022

of December 31, 2022, the redemption value of the redeemable non-controlling interest is $ 1,000,000 plus cumulative dividends which accrue

at the rate of 5 % annually, or approximately $ 1,033,000 .

The Company has guaranteed this redemption on behalf of Akos.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

financial position, results of operations or cash flows.

Demand Letters

January 21, 2021, the Company received a stockholder litigation demand letter from the law firm of Purcell Julie & Lefkowitz LLP,

on behalf of James Self, a purported stockholder of the Company.

letter demands that the Company (i) deem ineffective the December 30, 2020 amendment to the Company’s Amended and Restated

Certificate of Incorporation in which the Company effected a one-for-four reverse stock split of its common stock due to the manner in

which non-votes by brokers were tabulated, (ii) seek appropriate relief for damages allegedly suffered by the company and its stockholders

or seek a valid stockholder approval of the amendment and reverse stock split, and (iii) adopt adequate internal controls to prevent

a recurrence of the alleged misconduct.

The Company disputes that the amendment was ineffective or that there were any inadequate internal

controls related to the same.

However, to eliminate any questions about the amendment, the Company ratified the amendment at a special

stockholders’ meeting pursuant to Section 204 of the Delaware General Corporation Law .

This special stockholders’ meeting occurred on May 14, 2021.

On May 14, 2021, the Company filed a certificate of validation with

the State of Delaware to ratify the reverse stock split on December 30, 2020.

The purported stockholder thereafter agreed that the changes

mooted his potential claims, and the Amalgamation successfully closed.

The Company paid $ 65,000

to the purported stockholder’s counsel

in connection with the changes effected.

July 14, 2021, the Company received a stockholder demand letter from the law firm of Rigrodsky Law P.A., on behalf of Matthew Whitfield,

a purported stockholder of the Company, alleging that the registration statement (the “Amalgamation Registration Statement”)

filed by the Company with the SEC on June 21, 2021 omitted material information with respect to the Amalgamation and requesting that

the Company and the Company board of directors provide certain corrective disclosures in an amendment or supplement to the Amalgamation

Registration Statement.

The Company does not believe the request had merit, but made certain changes to the Amalgamation Registration

Statement, which it believes sufficed to answer the purported stockholder’s demands.

The purported stockholder thereafter agreed

that the changes mooted his potential claims, and the Amalgamation successfully closed.

The Company agreed to pay $ 30,000

to the purported stockholder’s counsel

in connection with the changes to the Amalgamation Registration Statement.

This amount was paid in October 2021.

July 22, 2021, the Company received a DGCL Section 220 books and records demand letter from the law firm of Kahn Swick & Foti, on

behalf of Scott Waller, a purported stockholder of the Company, seeking access to certain books and records of the Company in connection

with the process underlying the Amalgamation (as defined herein) and the Company’s engagement of its financial advisors.

does not believe the request had merit, but made certain changes to the Amalgamation Registration Statement, which it believes sufficed

to answer the purported stockholder’s demands.

The purported stockholder thereafter agreed that the changes mooted his potential

claims, and the Amalgamation successfully closed.

The Company agreed to pay $ 60,000

to the purported stockholder’s counsel

in connection with the changes to the Amalgamation Registration Statement.

This amount was paid in October 2021.

September 2, 2021, Vince Mojta (“Plaintiff”), through his attorney, filed a complaint (Mojta v.

Enveric Biosciences, Inc.,

et al., Case No.

1:21-cv-07385 (S.D.N.Y.)) in the United States District Court for the Southern District of New York, against the Company

and the members of its board of directors (the “Directors”).

The complaint alleged, among other things, that the Amalgamation

Registration Statement omitted material information with respect to the Amalgamation.

The complaint sought to enjoin the Company from

taking any steps to consummate the Amalgamation unless and until certain information was disclosed to the Company’s shareholders

before a vote on the Amalgamation and a judgment for damages.

The Company believed that the suit was without merit.

Plaintiff never served

the Company or the Directors with the suit, and the Amalgamation successfully closed.

Plaintiff then voluntarily dismissed the suit on

October 25, 2021.

and Clinical Supply Agreement

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to the Company.

initial term of the PureForm Agreement is three (3) years commencing on the effective date of the Agreement, subject to extension by

mutual agreement of the parties.

The PureForm Agreement may be terminated by either party upon thirty (30) days written notice of an

uncured material breach or immediately in the event of bankruptcy or insolvency.

The Agreement contains, among other provisions, representation

and warranties, indemnification obligations and confidentiality provisions in favor of each party that are customary for an agreement

of this nature.

initial term of the PureForm Agreement is three (3) years commencing on the effective date of the PureForm Agreement, subject to extension

by mutual agreement of the parties.

The PureForm Agreement may be terminated by either party upon thirty (30) days written notice of

an uncured material breach or immediately in the event of bankruptcy or insolvency.

The PureForm Agreement contains, among other provisions,

representation and warranties, indemnification obligations and confidentiality provisions in favor of each party that are customary for

an agreement of this nature.

Company has met the minimum purchase requirement of 1 kilogram during the first thirty days of the PureForm Agreement’s effectiveness.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

agreement with Prof.

6 unchanged sentences

The Vogel-Nathan Purchase Agreement includes a commitment to pay a one-time milestone

totaling $ 200,000

upon the issuance of a utility patent in the

United States or by the European Patent Office, as defined in the agreement.

The Company has accrued such amount as of December 31, 2021,

as a result of the milestone criteria being achieved.

Payment was made during January 2022.

In addition, a milestone payment totaling

is due upon initiation of a Phase II(b) study.

Research activities related to the relevant patents are still in pre-clinical stage, and accordingly, this milestone has not been achieved.

The Vogel-Nathan Purchase Agreement contains a commitment for payment of royalties equaling 2 %

of the first $ 20

million in net sales derived from the commercialization

totaling $ 200,000 upon the issuance of a utility patent in the United States or by the European Patent Office, as defined in the agreement.

The Company has accrued such amount as of December 31, 2021, as a result of the milestone criteria being achieved.

Payment was made during

January 2022.

In addition, a milestone payment totaling $ 300,000 is due upon initiation of a Phase II(b) study.

Research activities related

to the relevant patents are still in pre-clinical stage, and accordingly, this milestone has not been achieved.

The Vogel-Nathan Purchase

Agreement contains a commitment for payment of royalties equaling 2 % of the first $ 20 million in net sales derived from the commercialization

of products utilizing the relevant patent.

As these products are still in the preclinical phase of development, no royalties have been

and Assumption Agreements

January 10, 2020, Jay Pharma entered into two assignment and assumption agreements, pursuant to which, upon the satisfaction of all closing

conditions to the Offer, affiliates of Tikkun Pharma Inc.

(“Tikkun”) would assign to Jay Pharma all of such affiliates’

in-licensed and developed rights based on certain Amended and Restated Sublicense Agreements, effective January 12, 2018, pursuant to

which Jay Pharma entered into two in-licensing U.S.

and rest of world rights to the limited pharmaceutical business (including cancer)

from TO Pharmaceuticals USA LLC (“TOP”) and Tikkun Olam IP, LTD (“TOCI”), respectively, each as amended by a

First Amendment entered January 10, 2020, with:

and Tikkun regarding all of Tikkun’s (i) in-licensed rights and obligations to commercialize pharmaceutical products related to

GVHD under the relevant Sublicense in the U.S.

and (ii) certain skincare business and all of Tikkun’s rights related thereto as

of the January 10, 2020 effective date.

Jay Pharma agreed to issue 8,288,006 common shares of Jay Pharma to Tikkun in exchange for these

and Tikkun regarding all of Tikkun’s in-licensed rights and obligations to commercialize pharmaceutical products related to GVHD

under the relevant sublicense anywhere in the world outside the U.S.

Jay Pharma agreed to issue 2,072,001 common shares of Jay Pharma

to Tikkun in exchange for these rights .

August 12, 2020, Jay Pharma and the applicable Tikkun affiliates entered into the First Amendment to the Tikkun Agreements, pursuant

to which all references to the Original Amalgamation Agreement and the amalgamation were revised to be references to the Tender Agreement

and the Offer, as applicable.

October 2, 2020, Jay Pharma and the applicable Tikkun affiliates entered into the Second Amendment to the Tikkun Agreements, pursuant

to which the effective date of the transactions was revised to occur as of October 2, 2020.

On December 30, 2020, as

part of the merger with Ameri, the aggregate of 10,360,007 shares issued to Tikkun were converted to 571,987 shares of Common Stock and

1,719,906 shares of Series B Preferred Stock, after adjustment for the exchange ratio and reverse split ratio.

Pharma, Tikkun Olam LLC (“TO LLC”) and Tikkun Olam Hemp LLC (“TOH”) entered into a license agreement dated on

1 unchanged sentence

cannabis products in the United States (presently excluding the state of New York) from TO LLC and TOH, each of which is an affiliate

of TO Holdings, in exchange for royalty payments of (i) four percent (4.0%) of net sales of OTC cancer products made via consumer channels;

(ii) five percent (5.0%) of net sales of beauty products made via consumer channels;

and (iii) three percent (3.0%) of net sales of OTC

cancer products made via professional channels, along with a minimum net royalty payment starting in January 1, 2022 and progressively

increasing up to a cap of $400,000 maximum each year for the first 10 years, then $600,000 maximum each year for the next 5 years, and

an annual maximum cap of $750,000 each year thereafter during the term of the agreement .

The licensed intellectual property rights relate to beauty products and OTC cancer products, and branding rights related thereto.

beauty products include any topical or transdermal cannabis-containing or cannabis-derived (including hemp-based) skin care or body care

beauty products, and the OTC cancer products means any cancer-related products, in each case excluding those regulated as a drug, medicine,

or controlled substance by the FDA or any other relevant governmental authority, such as the USDA.

of TO Holdings Group LLC, in exchange for royalty payments of (i) four percent (4.0%) of net sales of OTC cancer products made via consumer

and (ii) five percent (5.0%) of net sales of beauty products made via consumer channels;

and (iii) three percent (3.0%) of

net sales of OTC cancer products made via professional channels, along with a minimum net royalty payment starting in January 1, 2022

and progressively increasing up to a cap of $400,000 maximum each year for the first 10 years, then $600,000 maximum each year for the

next 5 years, and an annual maximum cap of $750,000 each year thereafter during the term of the agreement .

The licensed intellectual

property rights relate to beauty products and OTC cancer products, and branding rights related thereto.

The beauty products include any

topical or transdermal cannabis-containing or cannabis-derived (including hemp-based) skin care or body care beauty products, and the

OTC cancer products means any cancer-related products, in each case excluding those regulated as a drug, medicine, or controlled substance

by the FDA or any other relevant governmental authority, such as the USDA.

August 12, 2020, Jay Pharma, TO LLC and TOH entered into the First Amendment to the License Agreement, pursuant to which all references

2 unchanged sentences

date of the transactions was revised to occur as of October 2, 2020.

On December 30, 2022, the Tikun Olam License was formally terminated by mutual agreement between the Company and Tikun Olam.

Consulting and Vendor Agreements

Company has entered into a number of agreements and work orders for future consulting, clinical trial support, and testing services,

with terms ranging between 1 and 12 months.

These agreements, in aggregate, commit the Company to approximately $ 0.4 million in future

cash payments.

August 1, 2021, MagicMed entered into a lease agreement (the “LSIH Lease”) with the University of Calgary for the use and

occupation of lab and office space at the University of Calgary’s Life Science Innovation Hub building located in Calgary,

Alberta, Canada (the “LSIH Facility”).

The Company acquired all rights and obligations contained in the LSIH Lease concurrent

with its amalgamation with MagicMed.

occupation of lab and office space at the University of Calgary’s Life Science Innovation Hub building located in Calgary, Alberta,

Canada (the “LSIH Facility”).

The Company acquired all rights and obligations contained in the LSIH Lease concurrent with

its amalgamation with MagicMed.

Company assesses whether an arrangement is a lease or contains a lease at inception.

3 unchanged sentences

has elected to account for non-lease components associated with its leases and lease components as a single lease component.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company recognizes a right-of-use asset, which represents the Company’s right to use the underlying asset for the lease term, and

5 unchanged sentences

of December 31, 2022

Right of use operating lease

Total leased assets

Current portion of right-of-use operating

lease obligation

Non-current portion of right-of-use

operating lease obligation

Total lease liabilities

of December 31, 2021

use operating lease asset, net

leased assets

Current portion of right-of-use operating lease

Non-current portion

of right-of-use operating lease obligation

lease liabilities

expense is recorded on the straight-line basis.

Rent expense under the LSIH Lease for the year ended December 31, 2021 and 2020 was $ 30,586

Rent expense under the LSIH Lease for the years ended December 31, 2022 and 2021 was

$ 120,667 and $ 30,586 , respectively.

14 unchanged sentences

Remaining lease term (years)

Operating leases

Discount rate

Operating leases

advisor services agreement

January 5, 2019, the Company entered into a business advisor services agreement.

Pursuant to the terms of the agreement, the consultant

provided business advisory, marketing, and investor relations services in exchange for $ 15,000

per month, of which $ 7,500

was payable in cash and $ 7,500

was payable in the Company’s common shares.

On January 6, 2020, the Company terminated its business advisory services agreement and agreed to settle the amounts due under the agreement

by (a) paying $ 12,500

in cash upon the completion of a bridge financing;

and (b) issuing 127,856

shares of Common Stock.

January 1, 2020, the Company entered into an agreement with Mr.

David Stefansky to serve as President and Secretary of the Company to

serve until the closing Amalgamation Agreement.

The Company agreed to pay Mr.

Stefansky $ 15,000

per month and future issuance of options to purchase

shares of common stock subject to the approval

of the Board of Directors.

On May 1, 2020, this agreement was terminated.

On May 1, 2020, the Company and Mr.

David Stefansky terminated

Stefansky’s agreement to serve as President and Secretary of the Company.

May 1, 2020, the Company entered into an agreement with Mr.

Henoch Cohn to serve as the Company’s President and Secretary until

the consummation of the Amalgamation Agreement.

The Company paid Mr.

Cohn $ 10,000

On December 30, 2020 the agreement

between the Company and Mr.

Henoch Cohn was terminated.

TENDER AGREEMENT

January 10, 2020, the Company entered into an amalgamation agreement (the “Ameri Amalgamation Agreement”) with Enveric Biosciences,

Merger Sub, Inc.

(“Merger Sub”), a wholly owned subsidiary of Ameri Holdings Inc.

(“Ameri”), and Enveric

BIOSCIENCES, INC.

Exchange Co, Inc.

(“ExchangeCo”), a wholly owned subsidiary of Ameri.

The Ameri Amalgamation Agreement

provided that the Company would merge into Merger Sub and be amalgamated and operate as one company.

to the execution and delivery of the Ameri Amalgamation Agreement, Alpha entered into agreements with Enveric Biosciences, Inc.

to which Alpha agreed, subject to the terms and conditions of such agreements, to purchase, immediately prior to the consummation of

the Amalgamation, shares of Enveric Biosciences, Inc.’s common stock (or common stock equivalents) and warrants to purchase Enveric

Biosciences, Inc.’s common stock for an aggregate purchase price of $ 3.5

The consummation of the transactions

contemplated by such agreements was conditioned upon the satisfaction or waiver of the conditions set forth in the Ameri Amalgamation

After consummation of the Amalgamation, Enveric Biosciences, Inc.

agreed to cause Ameri to register the resale of the Ameri

Common Stock issued and issuable pursuant to the warrants issued to the investors in the Jay Pharma Pre-Closing Financing.

Contemporaneously

with the Ameri Amalgamation Agreement, the Company entered into sublicense agreements with Tikkun Pharma, Inc.

(“Tikkun Pharma”).

The sublicense agreements with Tikkun Pharma allows the Company to utilize (a) Tikkun Pharma’s sublicense with a third party for

certain autoimmune applications, and (b) acquire and use Tikkun Pharma’s internally developing intellectual property, branding,

and formulations in regards to skincare.

April 20, 2020, the Company received a notice from the lenders of the Secured Promissory Note, dated January 10, 2020 as amended,

stating that the Company was in default for not closing the amalgamation with Ameri by March 31, 2020, and that the entire Secured

Promissory Note, dated January 10, 2020 as amended was due in full.

On May 6 and May 26, 2020, the Company and Alpha amended the

Secured Promissory Note, dated January 10, 2020 as amended and the Amalgamation Agreement, as described in below.

May 6, 2020, the Company entered into an Amalgamation Amendment Agreement (the “Amendment”) to amend the America Amalgamation

Pursuant to the Amendment, the parties agreed that (i) at the Effective Time, Ameri Holdings, Inc.

shall issue to the holder

of a certain note issued by Enveric Biosciences, Inc., series B warrants (the “Series B Warrants”) to acquire 8,100,000

shares of common stock of the company resulting

from the amalgamation, and (ii) providing for certain registration rights, pursuant to a Registration Statement on Form S-4, of the Series

B Warrants and the shares issuable upon exercise of the Series B Warrants.

The Series B Warrants shall be exercisable for a period of

five years commencing on the ninetieth (90th) day after the later of the last day of the Lock-up Period and leak-out Period (accelerated

or otherwise) set forth in the Lock-up agreement to be executed by the holders of Enveric Biosciences, Inc.

securities in connection

with the Amalgamation, at a price of $ 0.01

per share, and shall also be exercisable on a

cashless basis.

May 26, 2020, the Company entered into the second amendment to the Ameri Amalgamation Agreement (the “Second Amendment”)

to amend the Amalgamation Agreement described in Note 7.

The purpose of this amendment was to clarify that the Series B Warrants were

to acquire 8,100,000

shares of common stock Enveric Biosciences, Inc.

(to be approximately 3,675,035

shares of common stock of the company resulting

from the Amalgamation), as well as to clarify the exchange ratio already agreed upon.

August 12, 2020, Ameri, Enveric Biosciences, Inc., and certain other signatories thereto entered into a tender agreement (the “Tender

Agreement”), which provided that, among other things, Enveric Biosciences, Inc.

would become a wholly owned subsidiary of Ameri,

on the terms and conditions set forth in the Tender Agreement.

The Tender Agreement terminated and replaced in its entirety the Amalgamation

Upon completion of the Tender Agreement on December 30, 2020, (i) holders of outstanding common shares of Enveric Biosciences,

other than Alpha will be entitled to receive the number of shares of Resulting Issuer common stock issuable in accordance with the

Exchange Ratio, and (ii) Alpha will be entitled to receive shares of Series B Preferred Stock, which are convertible into shares of Resulting

Issuer common stock subject to a 9.99 %

beneficial ownership blocker, pursuant to the Alpha Exchange Agreement.

Each outstanding Enveric Biosciences, Inc.

option, whether vested

or unvested, and warrant that has not previously been exercised will exchanged for Resulting Issuer stock options and Resulting Issuer

warrants, in each case convertible into the number of shares of Resulting Issuer common stock equal to the Exchange Ratio.

Each outstanding

Enveric Biosciences, Inc.

option, whether vested or unvested, and warrant that has not previously been exercised will be exchanged for

Resulting Issuer stock options and Resulting Issuer warrants, in each case, convertible into the number of shares of Resulting Issuer

common stock equal to the Exchange Ratio.

Pursuant to the preceding, the Series B Warrants were converted into warrants to purchase

1,791,923 shares of the Company’s Common Stock, at an exercise price of $ 0.01 per share.

The Series B Warrants were exercised in

full during April 2021.

10 – INCOME TAXES

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company’s U.S.

7 unchanged sentences

$ ( 19,957,393 )

the year ended December 31, 2021, the Company recorded an income tax benefit of $ 7,454,805 .

For the year ended December 31, 2020, the

Company had no income tax expense or benefit.

The income tax benefit is as follows:

$ ( 56,431,701 )

the years ended December 31, 2022 and 2021, the Company recorded an income tax benefit of $ 1,486,060 and $ 7,454,805 , respectively.

income tax benefit is as follows:

OF INCOME TAX EXPENSE BENEFITS

tax benefit – United States

Deferred tax benefit

Deferred tax benefit - United States

tax benefit - Foreign

income tax benefit

1 unchanged sentence

OF DEFERRED TAX ASSETS AND LIABILITIES

Net operating

loss carryforwards

Deferred tax assets:

Net operating loss carryforwards

Stock-based compensation

Accrued bonus

valuation allowances

Research and development capitalized expenses

Intangible amortization

Less valuation allowances

( 10,977,893 )

deferred tax assets

Deferred tax liabilities:

Indefinite lived intangible assets

( 6,548,024 )

Net deferred tax assets

Deferred tax liabilities:

Indefinite lived intangible

( 1,607,122 )

Net deferred tax liabilities

$ ( 1,607,122 )

Company had the following potentially utilizable net operating loss tax carryforwards:

OF OPERATING LOSS CARRY FORWARDS

The Tax Cuts and Jobs Act of 2017 (the “Act”) limits the net

operating loss deduction to 80% of taxable income for losses arising in tax years beginning after December 31, 2017.

However, the net

operating losses now have an indefinite carryforward as opposed to the former 20-year carryforward.

As of December 31, 2021, the Company

had federal net operating loss carryforwards of $ 9,411,533 which can be carried forward indefinitely.

In addition, the Company has state

net operating loss carryforwards of $ 8,664,242 which can be carried forward indefinitely and Canadian net operating loss carryforwards

of $ 11,911,845 which will begin to expire in 2030 .

Tax Cuts and Jobs Act of 2017 (the “Act”) limits the net operating loss deduction to 80% of taxable income for losses arising

in tax years beginning after December 31, 2017.

As of December 31, 2022, the Company had federal net operating loss carryforwards and

state net operating loss carryforwards of $ 18,349,753

of $ 16,892,754 , respectively, which can be carried

forward indefinitely.

In addition, the Company has Canadian net operating loss carryforwards of $ 16,377,435

which will begin to expire

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company’s effective tax rate varied from the statutory rate as follows:

4 unchanged sentences

Intangible asset impairment

Non-deductible expenses

Change in valuation allowance

Effective income tax rate

Non-deductive expenses

Change in valuation

Effective income tax

September 16, 2021, the Company acquired MagicMed.

In connection with the acquisition, the Company recorded intangible assets from IPR&D

valued at $ 35,500,000 , which would be tested for impairment for book purposes, but without a tax basis, creating

a deferred tax liability of $ 9,061,927 .

The deferred tax liability decreased to $ 1,607,122 due to an impairment on intangible asset of

$ 29,048,164 and an impairment of goodwill of $8,225,862 for the year ended December 31, 2021.

In connection with the acquisition, the Company recorded intangible assets from

IPR&D valued at $ 35,500,000 ,

which would be tested for impairment for book purposes, but without a tax basis, creating a deferred tax liability of $ 9,061,927 .

The deferred tax liability decreased to $ 1,607,122 due to an impairment on intangible asset of $ 29,048,164 and an impairment of

goodwill of $ 8,225,862 for the year ended December 31, 2021.

The deferred tax liability decreased to $ —

due to an impairment on goodwill and intangible assets of $ 7,453,662

for the year ended December 31, 2022.

assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all

7 unchanged sentences

The Company’s foreign subsidiary also files a local tax return in their local jurisdiction.

federal, state and Canadian perspective the years that remains open to examination are consistent with each jurisdiction’s

federal, state and Canadian perspective the years that remain open to examination are consistent with each jurisdiction’s

statute of limitations.

11 – SUBSEQUENT

Public Offering

February 11, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with A.G.P./Alliance

Global Partners (the “Underwriter”).

Pursuant to the Underwriting Agreement, the Company agreed to sell, in a firm commitment

offering, 20,000,000

shares of the Company’s common stock, $ 0.01

par value per share, and accompanying warrants

to purchase up to an aggregate of 20,000,000

shares of its common stock, as well as up to

additional shares of common stock and/or warrants

to purchase an aggregate of up to 3,000,000

shares of its common stock that may be purchased

by the Underwriter pursuant to a 45-day option granted to the Underwriter by the Company (the “Offering”).

Each share of

common stock is being sold together with a common warrant to purchase one share of common stock, at an exercise price of $ 0.55

Such common warrants are immediately

exercisable and will expire five

years from the date of issuance.

public offering price of each share of common stock and accompanying common warrant sold in the Offering was $ 0.50 .

On February 14, 2022, the Underwriter exercised its option to purchase warrants to purchase up to 3,000,000

additional shares of the Company’s common

net proceeds from the Offering, after deducting underwriting discounts and commissions and other estimated offering expenses payable

by the Company and excluding the net proceeds, if any, from the exercise of the common warrants, are approximately $ 9.2

million (including net proceeds received on account

of the Underwriter’s purchase of additional warrants to purchase 3,000,000

shares of the Company’s common stock).

The Company intends to use the net proceeds from the Offering for working capital and to fund other general corporate purposes.

securities offered and sold in the Offering (including the shares of common stock issuable from time to time upon exercise of the common

warrants) will be issued pursuant to the Company’s shelf registration statement on Form S-3 (Registration Statement No.

previously filed with the Securities and Exchange Commission (the “Commission”) and declared effective by the Commission

on July 9, 2021.

The Offering, including the purchase of the additional warrants closed on February 15, 2022.

Notice from Nasdaq

On February 18, 2022, the

Company received a letter from the Listing Qualifications Department of the Nasdaq indicating that, based upon the closing bid price

of the Company’s common stock for the 30 consecutive business day period between January 5, 2022, through February 17, 2022, the

Company did not meet the minimum bid price of $ 1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to

Nasdaq Listing Rule 5550(a)(2).

The letter also indicated that the Company will be provided with a compliance period of 180 calendar

days, or until August 17, 2022 (the “ Compliance Period ”), in which to regain compliance pursuant to Nasdaq Listing

Rule 5810(c)(3)(A).

In order to regain compliance

with Nasdaq’s minimum bid price requirement, the Company’s common stock must maintain a minimum closing bid price of $ 1.00

for at least ten consecutive business days during the Compliance Period.

In the event the Company does not regain compliance by the end

of the Compliance Period, the Company may be eligible for additional time to regain compliance.

To qualify, the Company will be required

to meet the continued listing requirement for the market value of its publicly held shares and all other initial listing standards for

The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention

to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary.

If the Company meets these

requirements, the Company may be granted an additional 180 calendar days to regain compliance.

However, if it appears to Nasdaq that

the Company will be unable to cure the deficiency, or if the Company is not otherwise eligible for the additional cure period, Nasdaq

will provide notice that the Company’s common stock will be subject to delisting.

The letter has no immediate

impact on the listing of the Company’s common stock, which will continue to be listed and traded on The Nasdaq Capital Market,

subject to the Company’s compliance with the other listing requirements of The Nasdaq Capital Market

to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized.

BIOSCIENCES, INC

Joseph Tucker

Executive Officer and Director

to the requirements of the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant

and in the capacities and on the dates indicated.

Joseph Tucker

Executive Officer

Executive Officer)

Financial Officer

Financial and Accounting Officer)

David Johnson

Chairman of the Board

George Kegler

Marcus Schabacker

Bradley Thompson

As of March 30, 2023, the Company has not filed tax returns for the fiscal years 2022 and 2021.

utilization of the Company’s net operating losses may be subject to a substantial limitation in the event of any significant future

changes in its ownership structure under Section 382 of the Internal Revenue Code and similar state provisions.

Such limitation may result

in the expiration of the net operating loss carryforwards before their utilization.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”)

eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to amortize US expenses

over five years and foreign expense over fifteen years pursuant to IRC Section 174.

The Company has estimated and capitalized gross $ 2,684,319

of research and development expenditures that will be amortized primarily over five years.

This did not have a material impact on the

Company’s tax liability for the year ended December 31, 2022.

The Company will continue to evaluate the impact of these tax law changes

on the current and future periods.

Reduction Act

On August 16, 2022, President Joe Biden signed the Inflation Reduction

Act of 2022 (the “Act”) into law.

The Act includes a new 15% corporate minimum tax and a 1% excise tax on the value of corporate

stock repurchases, net of new share issuances, after December 31, 2022.

The Company does not expect these provisions to have a material

impact on the Company’s consolidated financial position;

however, the Company will continue to evaluate their impact as further information

becomes available.

SUBSEQUENT EVENTS

March 21, 2023, the Company established Enveric Therapeutics, Pty.

(“Enveric Therapeutics”), an Australia-based subsidiary,

to support the Company’s plans to advance its EVM201 Series towards the clinic.

Enveric Therapeutics will oversee the Company’s

preclinical, clinical, and regulatory activities in Australia, including ongoing interactions with the local Human Research Ethics Committees

(HREC) and the Therapeutic Goods Administration (TGA), Australia’s regulatory authority.

March 23, 2023, the Company issued a press release announcing the selection of Australian CRO, Avance Clinical, in preparation for

Phase 1 Study of EB-373, the Company’s lead candidate targeting the treatment of anxiety disorders.

The Phase 1 clinical trial

is expected to initiate in the fourth quarter of 2023.

Under the agreement, Avance Clinical will manage the Phase 1 clinical trial

of EB-373 in coordination with the Company’s newly established Australian subsidiary, Enveric Therapeutics Pty, Ltd.

1 clinical trial is designed as a multi-cohort, dose-ascending study to measure the safety and tolerability of EB-373.

next-generation proprietary psilocin prodrug, has been recognized as a New Chemical Entity (NCE) by Australia’s Therapeutic

Goods Administration (TGA) and is currently in preclinical development targeting the treatment of anxiety disorder.

The total cost

of the Avance Clinical contract is approximately 3,000,000

AUD, which translates to approximately $ 1,500,000 as of the contract date of March 23, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures