What changed in this filing

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Item 9A. Controls and Procedures

2024-03-26 compared with 2023-03-31 · 1115 added, 2289 removed, 818 unchanged (81% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports that we file

or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified under the rules and

maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports we file or

submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified under the rules and

forms of the SEC.

59 unchanged sentences

in Internal Control over Financial Reporting

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.

of December 31, 2023, 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

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 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

9 unchanged sentences

Other Information

May 2023, pursuant to the Akos Series A Preferred Certificate of Designations, the holders of the Akos Series A Preferred Stock exercised

the Put Right requiring Akos to force redemption of all of the Akos Series A Preferred Stock for $1,000 per share, plus accrued

but unpaid dividends of approximately $50,000 for a total of approximately $1,052,057.

The Company had 20 days following the receipt

of the Put Exercise Notice to make the payment and made payment on May 19, 2023.

Company, Akos, and the Akos Investor terminated the Akos Purchase Agreement in connection with the planned Spin-Off and that certain

registration rights agreement in connection with the Akos Private Placement in May 2023.

May 2023, the Company entered into a cost reduction plan, including a reduction in force of approximately 35% of its full-time employees

to streamline its operations and conserve cash resources.

Additionally, contracts with seven consultants that were focused on the Akos

cannabinoid spin-out will be terminated.

The Company recognized severance charges of $874,273 through December 31, 2023.

The plan included

a focus on progressing the Company’s existing non-cannabinoid pipeline while reducing the rate of spend and managing cash flow.

As of December 31, 2023, the Company has completed the reduction in force, with such severance expenses recorded in salaries and wages.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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.

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

December 2020

and Chair of the Compensation Committee

Officers and Directors

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 (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.

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 received his Ph.D.

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.

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

From September 2019 through December 2020, Mr.

was the President & Chief Operating Officer of NEXGEL, Inc.

(“NEXGEL”), an FDA registered, ISO certified advanced hydrogel

manufacturer serving the OTC, cosmetic and medical device markets around the world.

At NEXGEL, Mr.

Kanubaddi led the rebranding, repositioning

and overall strategy for the company to accelerate growth and drive innovation.

This included rebranding the company as NEXGEL, branding

the company’s unique hydrogels, developing a robust white label catalog, architecting an innovation engine to fill the pipeline

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

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”

strategies, branding and naming exercises and new product innovation for consumer, medical device and prescription companies.

his consulting career, from February 2007 to September 2019, Mr.

Kanubaddi was the Founder and Chief Executive Officer of Welmedix Healthcare,

where he developed innovative skin and wound care solutions to improve health and healing with an eye towards whole person wellness.

During his tenure, he led the company to develop three unique brands with patented solutions, gaining distribution in over 20,000 retail

outlets, including Walmart, Walgreens, CVS and others.

After building some of the fastest growing brands in their respective categories,

Welmedix sold its leading brands to a private-equity backed healthcare company.

Before his entrepreneurial venture, Mr.

Kanubaddi began

his 25+ year career in the healthcare industry at two leading companies – Wyeth (now Pfizer) and Bristol Myers Squibb’s ConvaTec

While working with market leading brands like Centrum, Advil and Chapstick;

medical devices and hospital businesses including

Aloe Vesta, DuoDerm and Sur-Fit Natura, Mr.

Kanubaddi held positions of increasing responsibility across the functional areas of brand

management, sales, new product development and new ventures.

Kanubaddi holds an MBA from Columbia Business School and BS in Marketing

from Miami University.

Kanubaddi also served on the Board of Directors for the Consumer Healthcare Products Association (CHPA), the

leading industry trade group for consumer healthcare in the United States.

Bob Dagher has served as our Chief Medical Officer since December 2021.

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.

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 started his career in the pharmaceutical industry at GlaxoSmithKline,

followed by Sanofi/Genzyme working on neurology, psychiatry, and urology indications.

Prior to joining Enveric, Dr.

Dagher served as

the Chief Medical Officer at WCG MedAvante-ProPhase from December 2019 to December 2021 and Cadent Therapeutics from January 2018 to

Prior to that, he was Senior Medical Director at LabCorp-Covance from October 2013 to January 2018.

In both these organizations,

Dagher helped forge and develop compelling scientific solutions to match industry challenges and developed innovative programs

targeting movement and cognitive disorders.

Dagher brings extensive experience working in the pharmaceutical industry with a focus

and passion for drug development for neurological and mental health indications.

Peter Facchini has served as our Chief Innovation Officer since joining the Company in September 2021.

Facchini has been

a Professor of Plant Biochemistry in the Department of Biological Sciences at the University of Calgary since 1995, during which he held

the Canada Research Chair in Plant Metabolic Processes Biotechnology, was a Parex Resources Innovation Fellow, and received the 2021

Faculty of Science Innovation Excellence Award.

Facchini co-founded and was the Chief Scientific Officer of Willow Biosciences Inc.

and Epimeron Inc.

Facchini was the Chief Scientific Officer at MagicMed Industries Inc.

from May 2020 to September 2021.

Facchini was the Chief Scientific Officer of Willow Biosciences from 2014 to 2020.

Facchini has published over 165 scientific

papers and co-invented over 45 patents.

Facchini is an international leader in the biochemistry and biotechnology fields of natural

product metabolism.

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.

Kegler was employed by Mallinckrodt

Pharmaceuticals from January 2013 to June 2019, serving as the Executive Vice President and Chief Financial Officer, Interim from December

2018 to May 2019, where he had responsibility for the global finance function and was a member of the executive committee, Vice President

Finance from November 2016 to November 2018, President Specialty Generics (Interim) and Vice President Finance from July 2016 to October

2016, and Vice President, Finance from January 2013 to June 2016.

He has served in various consulting roles since June 2019, which ended

in March 2020.

Kegler has 40 years of experience in financial planning and analysis, corporate finance, controllership and business

Previously Mr.

Kegler served as the vice president of commercial finance for various businesses within Mallinckrodt and

was also interim president of the company’s specialty generics business.

Prior to joining Mallinckrodt, he was the chief financial

officer for Convatec a private equity-owned company that was purchased from Bristol-Myers Squibb.

He worked in various finance roles

within Bristol-Myers Squibb including commercial, International, technical operations, research & development as well as the assistant

controller of internal controls.

Kegler holds a bachelor’s degree in accounting from the University of Missouri, an MBA from

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.

Lind is a co-founder and Managing

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 Stanley.

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

He was a practicing physician in Brookline, Massachusetts.

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 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.

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.

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

are no family relationships among our directors and executive officers.

16(a) Beneficial Ownership Reporting Compliance

16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of a registered class of our equity

securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity

Officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section

16(a) forms they file.

solely upon a review of the Forms 3, 4 and 5 and amendments thereto furnished to the Company, we believe that all directors, officers

and persons beneficially owning greater than 10% of the Company’s equity securities timely filed reports required by Section 16(a)

of the Exchange Act during Fiscal 2022, except for the following reporting persons:

Form 4 was filed late for Mr.

Avani Kanubaddi with respect to one transaction.

Form 4 was filed late for Mr.

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

such as a grant or exercise of stock options.

with the oversight of the board of directors and its committees, operates within a comprehensive plan of corporate governance for the

purpose of defining independence, assigning responsibilities, setting high standards of professional and personal conduct and assuring

compliance with such responsibilities and standards.

We regularly monitor developments in the area of corporate governance.

of Corporate Conduct and Ethics and Whistleblower Policy

have adopted a Code of Corporate Conduct and Ethics and Whistleblower Policy that applies to our directors, officers, employees and certain

persons performing services for us.

The Code of Corporate Conduct and Ethics and Whistleblower Policy addresses, among other things,

competition and fair dealing, conflicts of interest, protection and proper use of Company assets, government relations, compliance with

laws, rules and regulations and the process for reporting violations of the Code of Corporate Conduct and Ethics and Whistleblower Policy,

employee misconduct, improper conflicts of interest or other violations.

Our Code of Corporate Conduct and Ethics and Whistleblower Policy

is available on our website at www.enveric.com in the “Corporate Governance” section found under the “Investors”

We intend to disclose any amendments to, or waivers from, our Code of Corporate Conduct and Ethics and Whistleblower Policy at the

same website address provided above.

Amended and Restated Certificate of Incorporation and Bylaws provide that our board will consist of such number of directors as determined

from time to time by resolution adopted by our Board.

The size of our board is currently fixed at seven (7) directors.

Subject to any

rights applicable to any then-outstanding shares of preferred stock, any vacancies or newly created directorships resulting from an increase

in the authorized number of directors may be filled by a majority of the directors then in office.

Stockholders vote to elect directors

with a term then expiring each year at our annual meeting.

have no formal policy regarding board diversity.

Our board believes that each director should have a basic understanding of the principal

operational and financial objectives and plans and strategies of the Company, our results of operations and financial condition and relative

standing in relation to our competitors.

We take into consideration the overall composition and diversity of the board and areas of expertise

that director nominees may be able to offer, including business experience, knowledge, abilities and customer relationships.

we will strive to assemble a board that brings to us a variety of perspectives and skills derived from business and professional experience

as we may deem are in our and our stockholders’ best interests.

In doing so, we will also consider candidates with appropriate

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.

Pasqualone, Ms.

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

directors” as that term is defined in the Nasdaq Listing Rules.

Committees, Meetings and Attendance

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.

Committees regularly report on their activities

and actions to the full board.

Currently, the board has established an Audit Committee, a Compensation Committee and a Nominating and

Corporate Governance Committee.

Committee assignments are re-evaluated annually.

Each of these standing committees operates under a charter

that has been approved by our Board.

The current charter of each of these committees is available on our website at www.enveric.com in

the “Corporate Governance” section under “Investors.”

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

and Technology Committee

and Corporate Governance Committee

Marcus Schabacker

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:

and retaining the independent auditors to conduct the annual audit of our financial statements;

the proposed scope and results of the audit;

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

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;

and preventing prohibited non-audit services;

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 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.

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;

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.

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

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

Committee has the authority to delegate to subcommittees of the Compensation Committee any of the responsibilities of the full committee.

The Compensation Committee met one time during the year ended December 31, 2022 and acted by written consent on one occasion.

and Corporate Governance Committee

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;

each director and nominee annually;

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;

administering

the annual board performance evaluation process.

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

Marcus Schabacker and George Kegler.

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

We incorporate by reference the information responsive to this Item under

the captions “Election of Directors,” “Corporate Governance – Executive Officers,” “Corporate Governance

– Family Relationships,” “Related Person Transactions and Section 16(a) Beneficial Ownership Reporting Compliance,”

“Corporate Code of Conduct and Ethics,” “Corporate Governance – Committees of the Board of Directors –

Audit Committee,” “Corporate Governance – Insider Trading Policy,” “Stockholder Proposals and Nominations

for Director” appearing in our definitive Proxy Statement on Schedule 14A for our 2024 Annual Meeting of Stockholders (“Proxy

Statement”), a copy of which will be filed no later than 120 days after December 31, 2023.

Executive Compensation

Compensation Table

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

Name and Principal Position

Joseph Tucker (2)

Chief Executive Officer

2,226,992 (5)

Avani Kanubaddi (6)

President and Chief Operating Officer

3,789,523 (7)

Peter Facchini (8)

Chief Innovation Officer

1,566,910 (11)

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 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 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 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

Employment Agreement

May 24, 2021, Dr.

Joseph Tucker entered into an employment agreement (the “Tucker Employment Agreement”) with the Company

pursuant to which he will become the Company’s Chief Executive Officer, effective as of the September 16, 2021 closing date of

the Amalgamation (the “Tucker Effective Date”).

to the Tucker Employment Agreement, Dr.

Tucker receives a base salary of $350,000 annually (“Tucker Base Salary”).

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 market-based vesting.

Pursuant to the Tucker Employment Agreement,

upon entering into the agreement, Dr.

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 market-based vesting.

The RSUs are subject to the terms and conditions

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

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

of the Tucker Effective Date.

in calendar year 2022, Dr.

Tucker became eligible to receive annual performance bonuses of up to 75% of the Tucker Base Salary, as determined

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

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.

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.

Tucker from soliciting the Company’s employees or customers

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

Tucker’s employment with the Company and prohibiting him from disclosure

of confidential information regarding the Company at any time.

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

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.

Kanubaddi’s employment may be terminated by either the Company or Mr.

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

Upon termination of Mr.

Kanubaddi’s employment, Mr.

Kanubaddi will receive (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.

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

Kanubaddi under

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

Accrued Obligations”).

the Company terminates Mr.

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.

If the Company terminates Mr.

Kanubaddi’s employment without cause or 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 termination.

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

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

May 24, 2021, Dr.

Peter Facchini entered into an employment agreement (the “Facchini Employment Agreement”) with the Company

pursuant to he serves as the Company’s Chief Innovation Officer, effective as of the September 16, 2021 closing date of the Amalgamation

(the “Facchini Effective Date”).

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.

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

of termination to Dr.

Facchini or Dr.

Facchini delivers advance written notice of termination to the Company at least 30 days prior.

In addition, the Facchini Employment Agreement is subject to early termination by him or the Company in accordance with the terms of

the Facchini Employment Agreement.

to the Facchini Employment Agreement, if Dr.

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

for good reason, then the Company must pay Dr.

Facchini, in addition to any then-accrued and unpaid obligations owed to him, 12 months

of the then-current Facchini Base Salary.

Facchini Employment Agreement also contains covenants restricting Dr.

Facchini from soliciting the Company’s employees or customers

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

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

information regarding the Company at any time.

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

Avani Kanubaddi

Peter Facchini

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.

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.

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

for vesting upon change of control.

Vested RSU’s are eligible for conversion to an equivalent number of shares of Common Stock

upon termination of the employee by either the Company without cause, termination by the employee for good reason or an event of change

of control, and provided the Company’s 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 issuances.

following table presents the total compensation for each person who served as a member of our board of directors during the fiscal year

ended December 31, 2022.

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 2022.

Fees earned or paid in cash ($)

Other compensation

George Kegler

Marcus Schabacker

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.

Date and Expiration .

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

31, 2020 (the “2020 Plan Effective Date”).

The 2020 Plan will terminate on the tenth anniversary of the 2020 Plan Effective

Date, unless sooner terminated by our board of directors.

No award may be made under the 2020 Plan after its termination date, but awards

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

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 .

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;

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 .

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 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;

the price to be paid, if any;

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

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.

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;

profit before tax;

economic profit;

earnings before interest and taxes;

earnings before

interest, taxes, depreciation, and amortization;

gross margin;

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

operating earnings;

capital expenditures;

expenses or expense levels;

economic value added;

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;

sales growth;

price of the shares;

on assets, equity, or stockholders’ equity;

market share;

inventory levels, inventory turn or shrinkage;

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.

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;

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 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

following table provides information regarding the weighted-average exercise price of options issued by Enveric as of December 31, 2022.

Such issuances were approved by Enveric’s board of directors outside of an equity compensation plan.

Plan category

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.

We incorporate by reference the information responsive to this Item under

the captions “Executive Officer and Director Compensation” and “Corporate Governance – Committees of the Board

of Directors – Compensation Committee” appearing in our Proxy Statement.

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 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%

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.

vested restricted stock units equivalent to 15,790 shares of Common Stock.

Excludes unvested

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.

We incorporate by reference the information responsive to this Item under

the captions “Security Ownership of Certain Beneficial Owners and Management” and “Executive Officer and Director Compensation

– Equity Compensation Plan Information” appearing in our Proxy Statement

Certain Relationships and Related Transactions and Director Independence

below are transactions occurring since January 1, 2022 and any currently proposed transactions to which the Company was a party and in

amounts involved exceeded or will exceed the lesser of (i) $120,000, or (ii) 1% of the average

of the Company’s total assets at December 31, 2022 and December 30, 2021;

director, executive officer, holder of more than 5% of the Company’s outstanding capital

stock, or any member of such person’s immediate family had or will have a direct or

indirect material interest, excluding compensation arrangements described above.

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.

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.

incorporate by reference the information responsive to this Item under the captions “Related Person Transactions and Section 16(a)

Beneficial Ownership Reporting Compliance” and “Corporate Governance – Director Independence” appearing in our

Proxy Statement.

Principal Accountant Fees and Services

The Company selected Marcum LLP as its independent accountant on January 12, 2021.

Marcum LLP was dismissed

on June 23, 2021.

At that time the Company appointed Friedman LLP as its independent accountant.

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.

fees consist of fees billed for professional services related to the preparation of our U.S.

federal and state income tax returns and

Audit–related

fees consist of fees reasonably related to the performance of the audit or review of the Company’s financial statements that are

not reported as “Audit Fees.”

other fees consist of fees for other miscellaneous items.

services provided by the Company’s independent auditor were approved by the Company’s audit committee.

Policy of Services Performed by Independent Registered Public Accounting Firm

Audit Committee’s policy is to pre–approve all audit and non–audit related services, tax services and other services.

Pre–approval is generally provided for up to one year, and any pre–approval is detailed as to the particular service or category

of services and is generally subject to a specific budget.

The Audit Committee has delegated the pre–approval authority to its

chairperson when expedition of services is necessary.

The independent registered public accounting firm and management are required to

periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting

firm in accordance with this pre–approval and the fees for the services performed to date.

We incorporate by reference the information responsive to this Item under

the caption “Principal Accountant Fees and Services” appearing in our Proxy Statement.

Exhibits and Financial Statement Schedules

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Financial Statements:

of Independent Registered Accounting Firm (PCAOB Firm ID :

Marcum LLP # 688 and Friedman LLP # 711 )

Reports of Independent Registered Accounting Firm (PCAOB Firm ID:

Marcum LLP # 688 )

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Statements of Changes in Temporary Equity and Shareholders’ Equity

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity

Consolidated Statements of Cash Flows

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(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Commission on May 24, 2021)

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 January 6, 2021)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Enveric Biosciences, Inc.

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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 July 14, 2022)

Description of Securities*

Description of Securities (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2023)

Form of Pre-Funded Warrant (issued in connection with January 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 January 12, 2021)

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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)

Form of Inducement Warrant (in connection with December 2023 Offering) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Commission on December 29, 2023)

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)

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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.

GVHD Sublicense), dated January 10, 2020, by and among Tikkun Pharma, Inc., Jay Pharma Inc.

and Tikun Olam IP Ltd.* (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

1 to Assignment and Assumption Agreement (Non-U.S.

GVHD Sublicense), dated August 12, 2020, by and among Tikkun Pharma, Inc., Jay Pharma Inc.

and Tikun Olam IP Ltd.

(incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

2 to Assignment and Assumption Agreement (Non-U.S.

GVHD Sublicense and Skincare), dated October 2, 2020, by and among Tikkun Pharma, Inc., Jay Pharma Inc.

and Tikun Olam IP Ltd.

(incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Assignment and Assumption Agreement (U.S.

GVHD Sublicense and Skincare), dated January 10, 2020, by and among Tikkun Pharma, Inc., Jay Pharma Inc.

and TO Pharmaceuticals USA LLC* (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

1 to Assignment and Assumption Agreement (U.S.

GVHD Sublicense and Skincare), dated August 12, 2020, by and among Tikkun Pharma, Inc., Jay Pharma Inc.

and TO Pharmaceuticals USA LLC (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

2 to Assignment and Assumption Agreement (U.S.

GVHD Sublicense and Skincare), dated October 2, 2020, by and among Tikkun Pharma, Inc., Jay Pharma Inc.

and TO Pharmaceuticals USA LLC (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

License Agreement, dated January 10, 2020, by and among Tikun Olam LLC, Tikun Olam Hemp LLC and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

1 to License Agreement, dated August 12, 2020, by and among Tikun Olam LLC, Tikun Olam Hemp LLC and Jay Pharma Inc.

(incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed with the Commission on April 1, 2021)

Amendment No.

2 to License Agreement, dated October 2, 2020, by and among Tikun Olam LLC, Tikun Olam Hemp LLC 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)

Employment Agreement, dated January 10, 2020, by and between the Company and David Johnson (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Employment Agreement, dated December 2, 2020, by and between the Company and Avani Kanubaddi (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Employment Agreement, dated December 22, 2020, by and between the Company and Robert Wilkins (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Consulting Agreement, dated December 29, 2020, by and between the Company and Barry Kostiner (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Enveric Biosciences, Inc.

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Form of Registration Rights Agreement, dated February 9, 2021, by and among the Company and the purchasers thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Commission on February 11, 2021)

Development and Clinical Supply Agreement, between the Company and PureForm Global, Inc., dated February 22, 2021 (incorporated by reference to Exhibit 10.5 the Company’s Quarterly Report on Form 10-Q, filed with the Commission on May 17, 2021)

Exclusive License Agreement, between the Company and Diverse Biotech, Inc., dated March 5, 2021 (incorporated by reference to Exhibit 10.6 the Company’s Quarterly Report on Form 10-Q, filed with the Commission on May 17, 2021)

Employment Agreement between Carter J.

Ward and the Company, effective May 15, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 12, 2021)

Form of Voting and Support Agreement, dated as of May 24, 2021, by and among Enveric Biosciences, Inc.

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MagicMed Stock Option Plan, as amended September 10, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2021)

Letter dated January 6, 2021 from Ram Associates, CPA to the Securities and Exchange Commission.

(incorporated by reference to Exhibit 16.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2021)

Letter of Marcum LLP to the Securities and Exchange Commission, dated June 29, 2021.

(incorporated by reference to Exhibit 16.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2021)

Subsidiaries*

Form of Termination of Prior Agreements and Mutual Release (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on May 15, 2023)***

Equity Distribution Agreement, dated September 1, 20123, by and among the Company and Canaccord Genuity, LLC (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed with the Commission on September 1, 2023)

Purchase Agreement, dated November 3, 2023, by and among the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed with the Commission on November 6, 2023)

Registration Rights Agreement, dated November 3, 2023, by and among the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed with the Commission on November 6, 2023)

Form of Inducement Warrant, dated December 28, 2023, by and among the investors thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on December 29, 2023)

Code of Ethics*

Policy on Insider Trading*

Subsidiaries (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2023)

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**

Clawback Policy*

XBRL Instance Document*

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Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith.

Furnished herewith.

Management contract or compensatory plan or arrangement.

Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

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

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BIOSCIENCES, INC.

/s/ Joseph Tucker

Joseph Tucker

Executive Officer

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Joseph Tucker

Executive Officer

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George Kegler

Marcus Schabacker

Frank Pasqualone

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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on the Financial Statements

have audited the accompanying consolidated balance sheet of Enveric Biosciences, Inc.

have audited the accompanying consolidated balance sheets of Enveric Biosciences, Inc.

(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.

2023 and 2022, the related consolidated statements of operations and comprehensive loss, changes in mezzanine equity and shareholders’

equity and cash flows for the years ended December 31, 2023 and 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, 2023 and 2022, and the results of its operations and its cash flows for the two years in the period ended

December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Paragraph – Going Concern

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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.

in Note 1, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations.

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 1.

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.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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.

Those standards require that we plan and perform the audit to obtain

financial statements based on our audit s .

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (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 audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

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Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

We believe that our audits

provide 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

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

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statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

The communication of a critical audit matter

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.

of Long-lived Assets

Audit Matter Description

discussed in Notes 2 and 4 to the financial statements, the Company reviews goodwill on an

annual basis for impairment, or when circumstances indicate the assets might be impaired.

Additionally, the Company reviews long lived assets for impairment whenever events or changes

in circumstances indicate that the carrying amount of an asset or asset group may not be

Due to a sustained decline in the Company’s market capitalization, the

Company performed an impairment analysis and determined that an impairment of goodwill and

long-lived assets existed at December 31, 2022.

the Company’s accounting for impairment of goodwill and long-lived assets required a

high degree of subjective auditor judgment in evaluating the estimated discounted future cash flows used to test reporting units

for recoverability and the determination of fair value of the relevant 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 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

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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.

(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.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(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.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or

fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

have served as the Company’s auditor from 2021 through 2022.

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Research & Development Cost Recognition:

Critical Audit Matter Description

As discussed in Note 2 to the financial statements, the Company records costs for contracted research and development costs based upon estimates of costs incurred through the balance sheet date for services performed by contract research organizations, clinical study sites and other research and development related vendors.

Auditing the recognition of costs associated with contracted research and development organizations is challenging due to the significant judgment required to determine the nature and level of services that have been received, including determining the progress to completion of specific tasks and activities conducted in relation to what has been invoiced and recorded.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included:

Obtained an understanding of the design and implementation of internal controls for contracted research and development cost.

Tested the completeness and accuracy of the underlying data used in the estimates including, but not limited to, the estimated costs per project milestone and duration.

Assessed the reasonableness of the significant assumptions, corroborated the progress of the contracted research and development costs with the Company’s operations personnel and to information obtained by the Company directly from third parties, and to information in contracts or statements of work including costs for those activities and project duration.

Examined subsequent invoices received from contracted research and development cost third parties.

have served as the Company’s auditor since 2021.

Hanover, New Jersey

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BALANCE SHEETS

of December 31,

expenses and other current assets

As of December 31,

Current assets:

Property and equipment,

Right-of-use operating

Prepaid expenses and other current assets

Total current assets

Other assets:

Property and equipment, net

Right-of-use operating lease asset

Intangible assets, net

LIABILITIES, TEMPORARY EQUITY, AND SHAREHOLDERS’

Total other assets

LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued liabilities

Current portion of right-of-use

operating lease obligation

Current portion of right-of-use operating lease obligation

Investment option liability

current liabilities

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

Warrant liability

Derivative liability

Total current liabilities

Commitments and contingencies (Note 10)

Mezzanine equity

Series C redeemable preferred stock, $ 0.01 par value, 100,000 shares authorized, and 0 shares issued and outstanding as of December 31, 2023 and 2022, respectively

Redeemable non-controlling interest

Total mezzanine equity

Shareholders’ equity

Preferred stock, $ 0.01

par value, 20,000,000 shares authorized;

Series B preferred stock, $ 0.01 par value, 3,600,000 shares authorized, 0 shares issued

and outstanding as of 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

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, 2023 and 2022, respectively

Common stock, $ 0.01 par value, 100,000,000 shares authorized, 2,739,315 and 2,078,271 shares issued and outstanding as of December 31, 2023 and 2022, respectively

Additional paid-in capital

Stock subscription receivable

( 1,817,640 )

Accumulated deficit

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( 79,207,786 )

other comprehensive loss

shareholders’ equity

liabilities, temporary equity, and shareholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

Accumulated other comprehensive loss

Total shareholders’ equity

Total liabilities, mezzanine equity, and shareholders’ equity

BIOSCIENCES, INC.

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STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

the Years Ended December 31,

For the Years Ended December 31,

Operating expenses

administrative

General and administrative

Research and development

Impairment of intangible

assets and goodwill

and amortization

operating expenses

Impairment of intangible assets and goodwill

Depreciation and amortization

Total operating expenses

Loss from operations

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( 27,415,106 )

Other income (expense)

Inducement expense

Other (expense) income

Inducement expense, net

( 1,848,235 )

Change in fair value of

warrant liabilities

Change in fair value of

investment option liability

Change in fair value of

derivative liability

Change in fair value of warrant liabilities

Change in fair value of investment option liability

Change in fair value of derivative liability

Interest income (expense), net

Total other (expense) income

Net loss before income taxes

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( 19,957,393 )

Income tax benefit

Income tax (expense) benefit

( 17,291,732 )

( 18,471,333 )

Less preferred dividends

attributable to non-controlling interest

deemed dividends attributable to accretion of embedded derivative at redemption value

Net loss attributable to

Less preferred dividends attributable to non-controlling interest

Less deemed dividends attributable to accretion of embedded derivative at redemption value

Net loss attributable to shareholders

( 17,458,761 )

2 unchanged sentences

Foreign currency translation

Comprehensive

Comprehensive loss

$ ( 17,491,776 )

$ ( 19,306,255 )

Net loss per share -

basic and diluted

Weighted average shares outstanding, basic

accompanying notes are an integral part of these consolidated financial statements.

Net loss per share - basic and diluted

Weighted average shares outstanding, basic and diluted

BIOSCIENCES, INC.

1 unchanged sentence

STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

Income (Loss)

B Preferred Stock

Other Comprehensive

Income (Loss)

Redeemable Non-controlling Interest

Total Mezzanine Equity

Additional Paid-In Capital

Subscription Receivable

Accumulated Deficit

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

Balance at January 1, 2023 -

1 unchanged sentence

$ ( 536,734 )

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

Preferred dividends attributable to redeemable non-controlling interest

Accretion of embedded derivative to redemption value

Redemption of Series A preferred

( 1,052,057 )

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

Issuance of common shares in exchange for RSU conversions

Issuance of common shares for deferred offering costs

Issuance of Inducement Warrants, net of offering costs of $ 239,302

Induced conversion of warrants and preferred investment options

Exercise of warrants and preferred investment options

( 1,537,140 )

Foreign exchange translation

Foreign exchange translation loss

( 17,291,732 )

2 unchanged sentences

$ 100,815,851

accompanying notes are an integral part of these consolidated financial statements.

$ ( 1,817,640 )

$ ( 96,499,518 )

$ ( 569,749 )

BIOSCIENCES, INC.

1 unchanged sentence

STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

C Redeemable Preferred Stock

Non-controlling Interest

Other Comprehensive

Shareholders’

Series C Redeemable Preferred Stock

Redeemable Non-controlling Interest

Total Mezzanine Equity

Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Loss

Total Shareholders’ Equity

Balance at January 1, 2022

$ ( 60,736,453 )

February 2022 registered

direct offering, net of offering costs

$ ( 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

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 loss

( 18,471,333 )

3 unchanged sentences

$ ( 536,734 )

accompanying notes are an integral part of these consolidated financial statements.

$ ( 79,207,786 )

$ ( 536,734 )

BIOSCIENCES, INC.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

the Years Ended December 31,

Cash Flows From Operating

$ ( 18,471,333 )

For the Years Ended December 31,

Cash Flows From Operating Activities:

$ ( 17,291,732 )

Adjustments to reconcile

net loss to cash used in operating activities

Change in fair value of

warrant liability

$ ( 18,471,333 )

Adjustments to reconcile net loss to cash used in operating activities

Change in fair value of warrant liability

( 4,315,236 )

Change in fair value of

investment option liability

Change in fair value of investment option liability

( 3,472,726 )

Change in fair value of

derivative liability

Change in fair value of derivative liability

Stock-based compensation

Stock issued in lieu of

cash for services

Impairment of intangible

assets and goodwill

Inducement expense

Impairment of intangibles

Non-cash income tax benefit

( 1,504,302 )

( 7,454,805 )

Inducement expense

Amortization of right-of-use

Amortization of intangible

Amortization of ROU asset

Amortization of intangibles

Depreciation expense

in operating assets and liabilities:

Prepaid expenses and other

current assets

Accounts payable and accrued

operating lease liability

cash used in operating activities

Gain on disposal of property and equipment

Change in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable and accrued liabilities

Right-of-use operating lease asset and obligation

Net cash used in operating activities

( 14,094,411 )

( 17,146,723 )

Flows From Investing Activities:

Purchases of property and

Purchase of Diverse Bio

license agreement

accretive acquisition of MagicMed

cash (used in) provided by investing activities

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

Effect of foreign exchange

Net increase in cash

Cash at beginning of

Cash Flows From Investing Activities:

Purchases of property and equipment

Proceeds from disposal of property and equipment

Net cash provided by (used in) investing activities

Cash Flows From Financing Activities:

Proceeds from sale of common stock, warrants, and investment options, net of offering costs

Payment for equity distribution offering costs

Redemption of Series A Preferred Stock

( 1,052,057 )

Proceeds from the sale of redeemable non-controlling interest, net of offering costs

Net cash (used in) provided by financing activities

( 1,343,141 )

Effect of Foreign Exchange Rate on Changes on Cash

Net (decrease) increase in cash

( 15,435,907 )

Cash at beginning of year

Cash at end of year

Supplemental disclosure

of cash and non-cash transactions:

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.

Warrants issued in conjunction with common stock issuance

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

STATEMENTS OF CASH FLOWS

Issuance of embedded derivative

Stock subscription receivable

Offering costs accrued not paid

Warrants issued for offering costs

Issuance of common shares for deferred offering costs

Induced conversion of warrants and preferred investment options

Preferred dividends attributable to redeemable non-controlling interest

Investment options issued in conjunction with common stock issuance

Modification of warrants as part of share capital raise

Accretion of embedded derivative to redemption value

BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS AND LIQUIDITY AND OTHER UNCERTAINTIES

1 unchanged sentence

Biosciences, Inc.

(“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.

(“Enveric” or the “Company”) is a biotechnology company developing novel neuroplastogenic small-molecule

therapeutics for the treatment of depression, anxiety, and addiction disorders.

The head office of the Company is located in Naples,

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.

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

Industries develops and commercializes psychedelic-derived pharmaceutical candidates.

MagicMed’s psychedelic derivatives library,

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.

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.

(“Jay Pharma”), 1306432 B.C.

MagicMed Industries, Inc.

(“MagicMed”), Enveric Canada Inc., and Enveric Therapeutics, Pty.

(“Enveric Therapeutics”).

its unique discovery and development platform, The Psybrary™, Enveric has created a robust Intellectual Property portfolio of New

Chemical Entities for specific mental health indications.

Enveric’s lead program, the EVM201 Series, comprises next generation

synthetic prodrugs of the active metabolite, psilocin.

Enveric is developing the first product from the EVM201 Series – EB-373

– for the treatment of psychiatric disorders.

Enveric is also advancing its second program, the EVM301 Series, expected to offer

a first-in-class, new approach to the treatment of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity

without also inducing hallucinations in the patient.

the Company’s amalgamation with MagicMed completed in September 2021 (the “Amalgamation”), the Company has continued

to pursue the development of MagicMed’s proprietary Psychedelic Derivatives library, the Psybrary™ which the Company believes

will help to identify and develop the right drug candidates needed to address mental health challenges, including cancer-related distress.

The Company synthesizes novel versions of classic psychedelics, such as psilocybin, DMT, mescaline and MDMA, using a mixture of chemistry

and synthetic biology, resulting in the expansion of the Psybrary™, which includes 15 patent families with over a million potential

variations and hundreds of synthesized molecules.

Within the Psybrary™ the Company has three different types of molecules, Generation

1 (classic psychedelics), Generation 2 (pro-drugs), and Generation 3 (new chemical entities).

The Company is working to add novel psychedelic

molecular compounds and derivatives (“Psychedelic Derivatives”) on a regular basis through its work at the Company’s

labs in Calgary, Alberta, Canada, where the Company has a team of PhD scientists with expertise in synthetic biology and chemistry.

date the Company has created over 500 molecules that are housed in the Psybrary™.

Company screens newly synthesized molecules in the Psybrary™ through PsyAI™, a proprietary artificial intelligence (“AI”)

Leveraging AI systems is expected to reduce the time and cost of pre-clinical, clinical, and commercial development.

believes it streamlines pharmaceutical design by predicting ideal binding structures of molecules, manufacturing capabilities, and pharmacological

effects to help determine ideal drug candidates, tailored to each indication.

Each of these molecules that the Company believes are patentable

can then be further screened to see how changes to its makeup alter its effects in order to synthesize additional new molecules.

compounds of sufficient purity are undergoing pharmacological screening, including non-clinical (receptors/cell lines), preclinical (animal),

and ultimately clinical (human) evaluations.

The Company intends to utilize the Psybrary™ and the AI tool to categorize and characterize

the Psybrary™ substituents to focus on bringing more psychedelics-inspired molecules from discovery to the clinical phase.

March 21, 2023, the Company established Enveric Therapeutics, an Australia-based subsidiary, to support the Company’s plans to

advance its lead program, the EVM201 Series, comprised of the next generation synthetic prodrugs of the active metabolite, psilocin (“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.

Concern, Liquidity and Other Uncertainties

6 unchanged sentences

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.

The Company’s operations have been funded principally through the issuance of 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

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES 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

2 unchanged sentences

cash of $ 2,287,977 and working capital of $ 1,238,027 .

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.

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.

These conditions raise substantial doubt regarding

the Company’s ability to continue as a going concern for a period of one year after the date the financial statements are issued.

Management’s plan to alleviate the conditions that raise substantial doubt include raising additional working capital through public

or private equity or debt financings or other sources, which has included the Equity Distribution Agreement with Canaccord for proceeds

of up to $ 2.4 million (see Note 7), the Purchase Agreement with Lincoln Park (see Note 7), subject to registration, the Inducement Letters

and resulting sales of common stock under the Existing Warrants for cash proceeds of $ 1.8 million received in January 2024 (see Note

7), and the exercise of warrants to purchase 1,954,000 shares of common stock for cash proceeds of approximately $ 2.7 million in February

2024 (see Note 12), and may include additional collaborations with third parties as well as disciplined cash spending.

Adequate additional

financing may not be available to us on acceptable terms, or at all.

Should the Company be unable to raise sufficient additional capital,

the Company may be required to undertake cost-cutting measures including delaying or discontinuing certain operating activities.

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).

The Company’s consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

in Force/Restructuring

May 2023, the Company entered into a cost reduction plan, including a reduction in force (“RIF”) of approximately 35% of

its full-time employees to streamline its operations and conserve cash resources.

Additionally, contracts with seven consultants that

were focused on the Akos cannabinoid spin-out were terminated.

The Company recognized severance charges of approximately $ 453,059 through

December 31, 2023.

The plan included a focus on progressing the Company’s existing non-cannabinoid pipeline while reducing the

rate of spend and managing cash flow.

In June 2023, the Company completed the reduction in force, with such severance expenses recorded

in general and administrative accounts.

June 16, 2023, the Company entered into a separation agreement with Avani Kanubaddi, the Company’s President and Chief Operating

Officer (the “Kanubaddi Separation Agreement”).

In accordance with the Kanubaddi Separation Agreement, Mr.

outstanding restricted stock units (“RSUs”) will retain their vesting conditions.

Kanubaddi’s 2023 salary and benefits

of $ 550,974 , inclusive of the 2023 performance bonus in the amount of $ 129,760 were accrued and the salary and benefits, excluding the

2023 performance bonus will be paid out in twelve equal monthly installments beginning in July 2023.

As of December 31, 2023, the performance

metrics for the 2023 performance bonus were not achieved and the accrued amount of amount of $ 129,760 was reversed.

Upon termination,

any unvested time-based RSUs became fully vested.

The Company accelerated expense recognized related to these shares that vested was

All of the 11,278 market performance-based RSUs previously granted that were subject to the original terms and conditions of

Kanubaddi’s employment agreement were forfeited during the year ended December 31, 2023.

OF RESTRUCTURING COSTS PAYABLE

Restructuring Costs

January 1, 2023 Beginning balance

Restructuring costs incurred

Restructuring costs paid

Restructuring costs reversed

December 31, 2023 ending balance

Company considers the current inflationary trend existing in the North American economic environment 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 in the cost of labor and materials.

In addition, there is an increased risk of the Company

experiencing labor shortages due to a potential inability to attract and retain human resources due to increased labor costs resulting

from the current inflationary environment.

November 21, 2023, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market stating that as

of September 30, 2023, the Company did not meet the minimum of $ 2,500,000 in stockholders’ equity required for continued listing

pursuant to Nasdaq Listing Rule 5550(b)(1).

On February 6, 2024, the Company received a letter from Nasdaq, granting the Company an extension

to regain compliance with the minimum stockholders’ equity requirement by May 20, 2024.

If the Company fails to evidence compliance

upon filing its periodic report for June 30, 2024 with the SEC and Nasdaq, the Company may be subject to delisting.

The Company plans

to regain and evidence compliance with the Stockholders’ Equity Requirement by the required deadlines, but it is not assured.

BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation and Principal of Consolidation

accompanying consolidated financial statements have been prepared in accordance and in conformity with GAAP and the applicable rules

accompanying consolidated financial statements have been prepared in accordance and in conformity with U.S.

generally accepted accounting principles (“GAAP”) and the applicable rules

and regulations of the Securities and Exchange Commission (the “SEC”) regarding consolidated financial information.

1 unchanged sentence

transactions have been eliminated in consolidation.

Reclassification

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.

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

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.

2 unchanged sentences

Significant areas requiring management’s estimates and assumptions include determining

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 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.

the fair value of transactions involving common stock, the valuation of warrants and preferred investment options, and the valuation

of stock-based compensation and accruals associated with third party providers supporting research and development efforts.

Actual results

could differ from those estimates.

Currency Translation

inception through December 31, 2023, the reporting currency of the Company was the United States dollar while the functional currency

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

from changes in the exchange rates of the Canadian dollar and the U.S.

Company translates the assets and liabilities of its Canadian subsidiaries into the U.S.

dollar at the exchange rate in effect on the

balance sheet date.

Revenues and expenses are translated at the average exchange rate in effect during each monthly period.

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 income (loss).

of certain of the Company’s subsidiaries was the Canadian dollar and Australian dollar.

For the reporting periods ended December

31, 2023 and 2022, the Company engaged in a number of transactions denominated in Canadian dollars and Australian dollars.

the Company is subject to exposure from changes in the exchange rates of the Canadian dollar and Australian dollar against the United

States dollar.

Company translates the assets and liabilities of its Canadian subsidiaries and Australian subsidiary into the United States dollar at

the exchange rate in effect on the balance sheet date.

Revenues and expenses are translated at the average exchange rate in effect during

each monthly period.

Unrealized 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.

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 income (loss) as incurred.

loss in the consolidated statements of operations and comprehensive loss as incurred.

and Cash Equivalents

4 unchanged sentences

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.

which at times, may exceed the federal depository insurance coverage of $ 250,000 in the United States and Australia and $ 100,000 in Canada.

The Company 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, 2023, the Company had greater than $ 250,000 at United States financial institutions, less than $ 250,000

at Australian financial institutions, and greater than $ 100,000 at Canadian financial institutions.

Comprehensive

8 unchanged sentences

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.

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

using established valuation techniques.

A fair value measurement is determined as the price the Company would receive to sell an asset

or pay to transfer a liability in an orderly transaction between market participants at the measurement date.

In the context of purchase

accounting, the determination of fair value often involves significant judgments and estimates by management, including the selection

of valuation methodologies, estimates of future revenues, costs and cash flows, discount rates, and selection of comparable companies.

The estimated fair values reflected in the purchase accounting are subject to management’s judgment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets consist of the Psybrary™ and Patent Applications, In Process Research and Development (“IPR&D”) and license

33 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.

5 unchanged sentences

useful lives are typically 3 to 5 years for office furniture and equipment and are depreciated on a straight-line basis.

Offering Costs

Company allocates offering costs to the different components of the capital raise on a pro rata basis.

Any offering costs allocated to

common stock are charged directly to additional paid-in capital.

Any offering costs allocated to warrant liabilities are charged to general

and administrative expenses on the Company’s consolidated statement of operations and comprehensive loss.

Company complies with the requirements of ASC Topic 340, Other Assets and Deferred Costs (“ASC 340”) and SAB 5A -

Expenses of Offering .

Offering costs, which consist mainly of legal, accounting and consulting fees directly attributable to the

issuance of an equity contract to be classified in equity are recorded as a reduction in equity.

For the year ended December 31, 2023,

the Company incurred $ 567,603 in deferred offering costs in connection with the Equity Distribution Agreement (the “Distribution

Agreement”), with Canaccord Genuity LLC (“Canaccord”) and the Purchase Agreement (the “Purchase Agreement”)

with Lincoln Park Capital Fund, LLC (“Lincoln Park”).

These deferred offering costs will be proportionately offset against

the total proceeds from the issuance of common stock available under the agreements and the Company will expense any remaining balance

of deferred offering costs if the agreements are terminated.

For the year ended December 31, 2023, there were no issuances of common

stock under the agreements resulting in the deferral of offering costs.

BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 “Distinguishing

Liabilities from Equity” (“ASC 480”) and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”).

The 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.

and Inducement of Warrants and Investment Options

change in any of the terms or conditions of warrants is accounted for as a modification.

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the warrants are accounted for as equity issuance costs.

Company accounts for the inducement to exercise warrants in accordance with ASC Subtopic 470-20-40 “Debt with Conversion and Other

Options” (“ASC 470-20-40”).

ASC 470-20-40 requires the recognition through earnings of an inducement charge equal to

the fair value of the consideration delivered in excess of the consideration issuable under the original conversion terms.

the Company recognized a loss on the warrant inducement for the incremental change of the warrants related to the reduced exercise price

and the issuance of new warrants as these components induced the holders to exercise the warrants.

Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded

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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.

Any offering costs allocated to

common stock are charged directly to additional paid-in capital.

Any offering costs allocated to warrant liabilities are charged to general

and administrative expenses on the Company’s consolidated statement of operations and comprehensive loss.

fair value reported in the consolidated statements of operations.

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 period.

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 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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was required to be recorded.

BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of operating

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that could result in significant payments, accruals or material deviations from its position.

Company has identified its United States and Canadian federal tax return, its state and provincial tax returns in Florida and Ontario,

CA as its “major” tax jurisdictions.

The Company is in the process of filing its corporate tax returns for the years ended

December 31, 2022 and 2021.

Net operating losses for these periods will not be available to reduce future taxable income until the returns

Company has identified its United States, Canadian and Australian federal tax returns, and its state and provincial tax returns in Florida,

Massachusetts, New Jersey, Pennsylvania, and Ontario, CA as its “major” tax jurisdictions.

The Company is in the process

of filing its United States federal and state and Australian federal corporate tax returns for the year ended December 31, 2023.

Company is in the process of filing its Canadian corporate tax returns for the years ended December 31, 2023 and 2022.

Net operating

losses for these periods will not be available to reduce future taxable income until the returns are filed.

Company follows ASC 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring

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AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES 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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The computations of net loss per share for each period presented is the same for both basic and fully

In accordance with ASC 260-10-45-13, penny warrants were included in the calculation of weighted average shares outstanding

for purposes of calculating basic and diluted earnings per share.

In accordance with ASC 260 “Earnings per Share” (“ASC 260”), penny warrants were included in the calculation

of weighted average shares outstanding for the purposes of calculating basic and diluted earnings per share.

the year ended December 31, 2022 the Company issued 767,500 pre-funded common stock warrants, which were exercised on various dates during

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OF POTENTIALLY DILUTIVE SECURITIES

the years ended December 31,

Warrants to purchase shares of

For the years ended December 31,

Warrants to purchase shares of common stock

Restricted stock units - vested and unissued

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Restricted stock awards - vested and unissued

Restricted stock awards - unvested

Investment options to purchase shares of common

Options to purchase

shares of common stock

Total potentially dilutive

Common stock in abeyance

Investment options to purchase shares of common stock

Options to purchase shares of common stock

Total potentially dilutive securities

Value of Financial Instruments

fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value

Measurements and Disclosures” (“ASC 820”), approximates the carrying amounts in the balance sheets, excluding the derivative,

warrants, and preferred investment option liabilities, primarily due to their short-term nature.

BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Value Measurements

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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

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31, 2023 and 2022 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

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 )

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

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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:

Lease payments for short-term leases are recognized on a straight-line basis over the term of the lease.

All other lease assets and lease

liabilities are recognized based on the present value of lease payments over the lease term at commencement date.

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 assesses whether an arrangement is a lease or contains a lease at inception.

For arrangements considered leases or that contain

a lease that is accounted for separately, the Company determines the classification and initial measurement of the right-of-use asset

and lease liability at the lease commencement date, which is the date that the underlying asset becomes available for use.

has elected to account for non-lease components associated with its leases and lease components as a single lease component.

Company recognizes a right-of-use asset, which represents the Company’s right to use the underlying asset for the lease term, and

a lease liability, which represents the present value of the Company’s obligation to make payments arising over the lease term.

The present value of the lease payments is calculated using either the implicit interest rate in the lease or an incremental borrowing

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

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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.

connection with the issuance of Akos Series A Preferred Stock, the Akos Purchase Agreement (as defined below in Note 8) 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 the issuer.

As a result of this feature, the Company recorded the non-controlling interests as Redeemable

Non-Controlling Interests (“RNCI”) and classified them in mezzanine 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.

BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

May 2023, pursuant to the Akos Series A Preferred Certificate of Designations, the holders of the Akos Series A Preferred Stock exercised

the Put Right (as defined below) requiring Akos to force redemption of all of the Akos Series A Preferred Stock.

Company determines its reporting units in accordance with FASB ASC 280, “Segment Reporting” (“ASC 280”).

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Accounting Pronouncements

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 .