What changed in this filing

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Item 9A. Controls and Procedures

2026-03-27 compared with 2025-03-28 · 1412 added, 1413 removed, 451 unchanged (86% of the section changed)

Controls and Procedures

of Disclosure Controls and Procedures

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.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such

information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer,

as appropriate, to allow timely decisions regarding required disclosures.

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

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

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

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

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

of the design and operation of our disclosure controls and procedures as of December 31, 2024.

Based on this evaluation, and in light

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

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

were not effective as of December 31, 2024.

on Internal Control over Financial Reporting

internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements.

Therefore, even

those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because

of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

However, these inherent limitations

are known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards to reduce, though

not eliminate, this risk.

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange

Act Rule 13a-15(f) and 15d-15(f).

Internal control over financial reporting is a process used to provide reasonable assurance regarding

the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally

accepted accounting principles in the United States.

Internal control over financial reporting includes policies and procedures that

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our

provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in

accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made

only in accordance with the authorization of our board of directors and management;

and provide reasonable assurance regarding prevention

or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial

the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer)

and Chief Financial Officer (our principal financial officer and principal accounting officer), we performed an assessment of the Company’s

significant processes and key controls.

Based on this assessment, management concluded that our internal control over financial reporting

was not effective as of December 31, 2024 due to the material weaknesses described below.

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

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

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

We determined that our internal control over financial reporting

had the following material weaknesses:

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

a system of controls, inclusive of IT controls, including testing of such controls that is consistent with our current personnel

and available resources;

failed to document, maintain and test effective control activities over our control environment, risk assessment, information technology

and monitoring components;

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

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

to limited personnel and resources.

Company is evaluating these weaknesses to determine the appropriate remedy.

Because disclosure controls and procedures include those

components of internal control over financial reporting that provide reasonable assurances that transactions are recorded as necessary

to permit preparation of financial statements in accordance with generally accepted accounting principles, management also determined

that its disclosure controls and procedures were not effective as a result of the foregoing material weaknesses in its internal control

over financial reporting.

in Internal Control over Financial Reporting

of December 31, 2024, 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 information technology experts who designed and implemented a secure, cloud based, server and IT environment with controlled

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

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

to pay operation cycle;

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

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

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

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

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

segregation of duties.

we 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, but as of December 31, 2024 we

did not have any third party subject matter experts engaged.

Evaluation of Disclosure Controls and Procedures

We 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.

Disclosure controls

and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated

to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding

required disclosures.

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

such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented

or detected on a timely basis.

As required by paragraph (b)

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

principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation

of our disclosure controls and procedures as of December 31, 2025.

Based on this evaluation, and in light of the material weaknesses

found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure

controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective as of December 31,

Limitations on Internal Control over Financial

An internal control system

over financial reporting has inherent limitations and may not prevent or detect misstatements.

Therefore, even those systems determined

to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

However, these inherent limitations are

known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards to reduce, though not

eliminate, this risk.

Management’s Annual Report on Internal

Control over Financial Reporting

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f).

Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial

reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles

in the United States.

Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records

that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, provide reasonable assurance

that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting

principles in the United States, and that our receipts and expenditures are being made only in accordance with the authorization of our

board of directors and management;

and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and

with the participation of our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial

Officer (our principal financial officer and principal accounting officer), we performed an assessment of the Company’s significant

processes and key controls.

Based on this assessment, management concluded that our internal control over financial reporting was not

effective as of December 31, 2025 due to the material weaknesses described below.

A material weakness in internal

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

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

not be prevented or detected on a timely basis.

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

weaknesses, due to limited personnel and resources:

● We were unable to document, formalize, implement and revise where necessary controls, policies and procedure

documentation to evidence a system of controls, inclusive of IT controls, including testing of such controls that is consistent with our

current personnel and available resources;

● We failed to document, maintain and test effective control activities over our control environment, risk

assessment, information technology and monitoring components;

● We had insufficient segregation of duties, oversight of work performed and lack of compensating controls

in our finance and accounting functions, including, without limitation, the processing, review and authorization of all routine and non-routine

transactions, due to limited personnel and resources.

The Company is evaluating

these weaknesses to determine the appropriate remedy.

Because disclosure controls and procedures include those components of internal

control over financial reporting that provide reasonable assurances that transactions are recorded as necessary to permit preparation

of financial statements in accordance with generally accepted accounting principles, management also determined that its disclosure controls

and procedures were not effective as a result of the foregoing material weaknesses in its internal control over financial reporting.

Changes in Internal Control over Financial

As of December 31, 2025,

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.

Remediation efforts to address material

weaknesses in internal controls

● We engaged information technology experts who designed and implemented a secure, cloud based, server and

IT environment with controlled access, monitoring, help desk and a user training protocol;

● We installed and implemented third party software that provides improved control, approvals and segregation

of duties over the purchase to pay operation cycle;

● We engaged third party subject matter experts who are providing independent supervision of accounting

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

● We engaged third party subject matter experts who are assisting in the financial reporting function, with

such activities, including, without limitation, preparation, review and reconciliation of financial reports, research of technical accounting

issues/transactions, performing various checklists to ensure compliance with GAAP and SEC requirements, with all such activities resulting

in improved segregation of duties.

● Previously, we 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, but as of December 31, 2025 we did not have any third party subject matter experts engaged.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

incorporate by reference the information responsive to this Item appearing in our definitive Proxy Statement on Schedule 14A for our

2025 Annual Meeting of Stockholders (“Proxy Statement”), which will be filed no later than 120 days after December 31, 2024.

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections

Directors, Executive Officers and

Corporate Governance

We incorporate by reference the information responsive

to this Item appearing under the headings “Proposal 1:

Election of Directors,” “Corporate Governance,” and “Related

Person Transactions and Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Code of Conduct and Ethics”

in our definitive Proxy Statement on Schedule 14A for our 2026 Annual Meeting of Stockholders (“Proxy Statement”), which will

be filed no later than 120 days after December 31, 2025.

Executive Compensation

incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than

120 days after December 31, 2024.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than

120 days after December 31, 2024.

Certain Relationships and Related Transactions and Director Independence

incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than

120 days after December 31, 2024.

We incorporate by reference the information responsive

to this Item appearing under the heading “Executive Officer and Director Compensation” in our Proxy Statement, which will

be filed no later than 120 days after December 31, 2025.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters

We incorporate by reference the information responsive

to this Item appearing under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement,

which will be filed no later than 120 days after December 31, 2025.

Certain Relationships and Related

Transactions and Director Independence

We incorporate by reference the information responsive

to this Item appearing under the headings “Related Person Transactions and Section 16(a) Beneficial Ownership Reporting Compliance”

and “Corporate Governance” in our Proxy Statement, which will be filed no later than 120 days after December 31, 2025.

Principal Accountant Fees and Services

incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than

120 days after December 31, 2024.

We incorporate by reference the information responsive

to this Item appearing under the heading “Proposal 5:

Ratification of Appointment of Independent Registered Public Accounting Firm”

in our Proxy Statement, which will be filed no later than 120 days after December 31, 2025.

Exhibits and Financial Statement Schedules

following documents are filed as part of this Annual Report on Form 10-K:

The following documents are

filed as part of this Annual Report:

(1) Financial Statements:

Report of Independent Registered Accounting Firm (PCAOB Firm ID:

CBIZ CPAs P.C.

Report of Independent Registered Accounting Firm (PCAOB Firm ID:

Marcum LLP # 688 )

1 unchanged sentence

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Changes in Mezzanine Equity and Shareholders’ Equity

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

1 unchanged sentence

(2) Financial Statement Schedules:

Financial statement schedules have not been included because they are not applicable, or the information is included in the consolidated

financial statements or notes thereto.

“Index to Exhibits” for a description of our exhibits.

Financial statement schedules

have not been included because they are not applicable, or the information is included in the consolidated financial statements or notes

(3) Exhibits:

See “Index to Exhibits”

for a description of our exhibits.

Form 10–K Summary

Not applicable.

Purchase Agreement, dated January 10, 2020, by and between AMERI Holdings, Inc.

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3.1 to the Company’s Current Report on Form 8-K, filed with the Commission on January 21, 2025)

and Restated Bylaws of Enveric Biosciences, Inc.

(incorporated by reference to Exhibit 3.4 to the Company’s Current Report

on Form 8-K, filed with the Commission on January 6, 2021)

to the Amended and Restated Bylaws 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 November 18, 2021)

of Designations of Series B Preferred Stock of Enveric Biosciences, Inc.

(incorporated by reference to Exhibit 3.3 to the Company’s

Current Report on Form 8-K, filed with the Commission on January 6, 2021)

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

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Commission on October 23, 2025)

Certificate of Designations of Series B Preferred Stock of Enveric Biosciences, Inc.

(incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Amended and Restated Bylaws of Enveric Biosciences, Inc.

(incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Amendment to the Amended and Restated Bylaws 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 November 18, 2021)

of Designation of the Series C Preferred Stock of the Company, dated May 4, 2022 (incorporated by reference to Exhibit 3.1 to the

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Registration Statement on Form S-1/A, filed with the Commission on January 30, 2025)

Form of Series C Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of our company’s Current Report on Form 8-K, filed with the Commission on September 18, 2025)

Form of Series D Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of our company’s Current Report on Form 8-K, filed with the Commission on September 18, 2025)

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of our company’s Current Report on Form 8-K, filed with the Commission on September 18, 2025)

Form of Series E Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of our company’s Current Report on Form 8-K, filed with the Commission on December 12, 2025)

Form of Series F Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of our company’s Current Report on Form 8-K, filed with the Commission on December 12, 2025)

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of our company’s Current Report on Form 8-K, filed with the Commission on December 12, 2025)

Form of Series G Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of our company’s Current Report on Form 8-K, filed with the Commission on January 28, 2026)

Form of Series H Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of our company’s Current Report on Form 8-K, filed with the Commission on January 28, 2026)

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of our company’s Current Report on Form 8-K, filed with the Commission on January 28, 2026)

Agreement between Kevin Coveney and the Company, effective March 13, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s

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Current Report on Form 8-K, filed with the Commission on July 14, 2022)

of Warrant Amendment (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.4 to the Company’s Current

Report on Form 8-K, filed with the Commission on July 26, 2022)

of Securities Purchase Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K, filed with the Commission on July 26, 2022)

of Securities Purchase Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K, filed with the Commission on July 26, 2022)

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)

Biosciences, Inc.

2020 Long-Term Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current

Report on Form 8-K, filed with the Commission on January 6, 2021)

of RSU Award Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed with the

Commission on January 6, 2021)

Form of RSA Award Agreement*

Form of Securities Purchase Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of Securities Purchase Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Form of Registration Rights Agreement (in connection with July 2022 Offering) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the Commission on July 26, 2022)

Enveric Biosciences, Inc.

2020 Long-Term Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Form of RSU Award Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed with the Commission on January 6, 2021)

Form of RSA Award Agreement (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 28, 2025)

of Securities Purchase Agreement, dated January 11, 2021, by and among the Company and the purchasers thereto (incorporated by reference

30 unchanged sentences

to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed with the Commission on September 1, 2023)

Enveric Biosciences, Inc.

2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-8, filed with the Commission on March 24, 2025)

Agreement, dated November 3, 2023, by and among the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit

2 unchanged sentences

to Exhibit 10.2 to the Current Report on Form 8-K, filed with the Commission on November 6, 2023)

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)

Form of Inducement Letter, 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).

of Common Stock Purchase Agreement, dated March 8, 2024, between Enveric Biosciences, Inc.

9 unchanged sentences

Exclusive License Agreement, dated November 7, 2024, between Enveric Biosciences, Inc.

and MycoMedica Life Sciences, PBC*

and MycoMedica Life Sciences, PBC (incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 28, 2025)

Form of Inducement Letter (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the Commission on September 18, 2025)

Form of Inducement Letter (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the Commission on December 12, 2025)

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of our company’s Current Report on Form 8-K, filed with the Commission on January 28, 2026)

of Ethics (incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K, filed with the Commission on

2 unchanged sentences

on March 26, 2024)

Subsidiaries*

Consent of independent registered public accountant – CBIZ CPAs P.C.

Consent of independent registered public accountant – Marcum LLP

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

confidential portions of this Exhibit were omitted by means of marking such portions

brackets (“[***]”) because the identified confidential portions (i) are not material

and (ii) would be competitively harmful if publicly disclosed.

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.

21 unchanged sentences

DeWitt, Ph.D.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

the Shareholders and Board of Directors of

1 unchanged sentence

on the Financial Statements

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

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

(the “Company”) as of December 31,

2024 and 2023, 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, 2024 and 2023, 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, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024

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

2025, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity and cash flows

for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles

generally accepted in the United States of America.

Paragraph – Going Concern

9 unchanged sentences

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

financial statements based on our audits.

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 audits in accordance with the standards of the PCAOB.

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

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 audits,

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

1 unchanged sentence

Accordingly, we express no such opinion.

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.

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 audits also included evaluating the accounting principles used and significant

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 audits

provide a reasonable basis for our opinion.

We believe that our audit provides

a reasonable basis for our opinion.

Audit Matters

4 unchanged sentences

We determined that there are no critical audit matters.

have served as the Company’s auditor since 2021.

New Jersey March 28, 2025

CBIZ CPAs P.C.

have served as the Company’s auditor since 2021 (such date takes into account the acquisition of the attest business of Marcum

LLP by CBIZ CPAs P.C.

effective November 1, 2024).

of Independent Registered Public Accounting Firm

the Shareholders and Board of Directors of

Biosciences, Inc.

on the Financial Statements

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

(the “Company”) as of December 31,

2024, the related consolidated statements of operations and comprehensive loss, changes in mezzanine equity and shareholders’ equity

and cash flows for the year ended December 31, 2024, 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, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles

generally accepted in the United States of America.

Paragraph – Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described

in Note 1, the Company 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 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.

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 to 2025.

March 28, 2025 (except for the Second Reverse Stock Split effective as of October 23, 2025 described in Note 1, as to which the date

is February 9, 2026)

ENVERIC BIOSCIENCES,

AND SUBSIDIARIES

BALANCE SHEETS

CONSOLIDATED BALANCE

As of December 31,

10 unchanged sentences

Due to related parties

Accrued liabilities

Investment option liability

Warrant liability

Accrued expenses and other current liabilities

Total current liabilities

2 unchanged sentences

Series C redeemable preferred stock, $ 0.01 par value, 100,000 shares authorized, and 0 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Redeemable non-controlling interest

Total mezzanine equity

4 unchanged sentences

Additional paid-in capital

Stock subscription receivable

( 1,817,640 )

Accumulated deficit

4 unchanged sentences

Total liabilities, mezzanine equity, and shareholders’ equity

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

BIOSCIENCES, INC.

The accompanying notes

are an integral part of these consolidated financial statements.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended December 31,

8 unchanged sentences

Other income (expense)

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

Interest income, net

Total other income (expense)

Interest (expense) income, net

Total other income

Net loss before income taxes

4 unchanged sentences

( 9,574,987 )

Less preferred dividends attributable to non-controlling interest

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

Less deemed dividend on inducement of warrants

Net loss attributable to shareholders

1 unchanged sentence

$ ( 9,574,987 )

Other comprehensive loss

Other comprehensive income (loss)

Foreign currency translation

4 unchanged sentences

Weighted average shares outstanding, basic and diluted

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

BIOSCIENCES, INC.

The accompanying notes

are an integral part of these consolidated financial statements.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2024

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEAR ENDED

DECEMBER 31, 2025

Additional Paid-In

Accumulated Other Comprehensive

Shareholders’

Total Shareholders’

Balance at January 1, 2025

2 unchanged sentences

$ ( 594,517 )

$ ( 569,749 )

Common stock sold under the Equity Distribution Agreement, net of offering costs of $ 583,713

Issuance of direct offering shares (see Note 8)

Exercise of Inducement Warrants for common stock

Issuance of Common Stock and Series A and B and prefunded warrants for cash, net of offering costs of $ 755,487

Issuance of common shares for vested RSAs

Issuance of common shares for exercise of warrants

Issuance of round up shares

Issuance of common shares for cash pursuant to ATM Agreement, net of offering costs of $ 217,079

Exercise of Series A, B, C, and D Warrants for common shares, net of offering costs of $ 988,911

Deemed dividend on inducement of warrants of $ 3,359,485

Stock-based compensation

Issuance of common shares for vested RSU

Proceeds from the subscription receivable related to the issuance of Inducement Warrants, net of offering costs of $ 12,821

Proceeds from the subscription receivable related to the exercise of warrants and preferred investment options and issuance of common stock in abeyance

Common stock sold under the Purchase Agreement, net of offering costs of $ 471,756

Foreign exchange translation loss

Foreign exchange translation gain

( 8,771,987 )

4 unchanged sentences

$ ( 580,038 )

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

BIOSCIENCES, INC.

The accompanying notes

are an integral part of these consolidated financial statements.

ENVERIC BIOSCIENCES,

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2023

Redeemable Non-controlling Interest

Total Mezzanine

CONSOLIDATED STATEMENTS

OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEAR ENDED

DECEMBER 31, 2024

Additional Paid-In

Accumulated Other Comprehensive

Shareholders’

Total Shareholders’

Balance at January 1, 2024

3 unchanged sentences

$ ( 569,749 )

Preferred dividends attributable to redeemable non-controlling interest

Accretion of embedded derivative to redemption value

Redemption of Series A preferred stock

$ 100,843,091

$ ( 1,817,640 )

$ ( 96,499,518 )

$ ( 569,749 )

Common stock sold under the Equity Distribution Agreement, net of offering costs of $ 583,713

Issuance of direct offering shares (see Note 7)

Exercise of Inducement Warrants for common stock

Stock based compensation

Issuance of common shares for vested RSU

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 )

Proceeds from the subscription receivable related to the issuance of Inducement Warrants, net of offering costs of $ 12,821

Proceeds from the subscription receivable related to the exercise of warrants and preferred investment options and issuance of common stock in abeyance

Common stock sold under the Purchase Agreement, net of offering costs of $ 471,756

Foreign exchange translation loss

8 unchanged sentences

$ ( 594,517 )

$ ( 96,499,518 )

$ ( 569,749 )

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

BIOSCIENCES, INC.

The accompanying notes

are an integral part of these consolidated financial statements.

ENVERIC BIOSCIENCES,

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS

OF CASH FLOWS

For the Years Ended December 31,

5 unchanged sentences

Change in fair value of investment option liability

Change in fair value of derivative liability

Stock-based compensation

Inducement expense

Deferred offering costs expensed

Amortization of right of use asset

Amortization of intangibles

Depreciation expense

Gain on disposal of property and equipment

Change in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable and accrued liabilities

Accounts payable, accrued expenses and other liabilities

Due to related parties

Right-of-use operating lease asset and obligation

Net cash used in operating activities

1 unchanged sentence

( 7,726,139 )

Cash Flows From Investing Activities:

Purchases of property and equipment

Proceeds from disposal of property and equipment

Net cash provided by investing activities

Cash Flows From Financing Activities:

Proceeds from the subscription receivable related to the issuance of Inducement Warrants and the exercise of warrants and preferred investment options

Proceeds from exercise of Inducement Warrants

Proceeds from sale of Common Stock and warrants, net of offering costs

Proceeds from Common Stock sold for cash pursuant to the ATM Agreement, net of offering costs

Proceeds from the exercise and inducement of Series A, B, C, and D warrants, net of offering costs

Proceeds from Common Stock sold under the Equity Distribution Agreement, net of offering costs

Proceeds from Common Stock sold under the Purchase Agreement, net of offering costs

Proceeds from the subscription receivable related to the issuance of Inducement Warrants and the exercise of warrants and preferred investment options

Payment for offering costs previously accrued

Payment for equity distribution offering costs

Redemption of Series A Preferred Stock

( 1,052,057 )

Net cash provided by (used in) financing activities

( 1,343,141 )

Net cash provided by financing activities

Effect of foreign exchange rate on changes on cash

Net decrease in cash

( 15,435,907 )

Net increase (decrease) in cash

Cash at beginning of year

4 unchanged sentences

Non-cash financing and investing activities:

Stock subscription receivable

Non-cash issuance of round-up shares

Non-cash issuance of RSA vested shares

Offering costs accrued not paid

Warrants issued for offering costs

Deferred offering costs not paid

Deemed dividend on inducement of warrants

Issuance of Placement Agent Warrants as offering costs

Issuance of common shares for offering costs

Deferred offering costs charged to offering costs

Induced conversion of warrants and preferred investment options

Preferred dividends attributable to redeemable non-controlling interest

Accretion of embedded derivative to redemption value

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

BIOSCIENCES, INC.

The accompanying notes

are an integral part of these consolidated financial statements.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS AND LIQUIDITY AND OTHER UNCERTAINTIES

of Operations

Biosciences, Inc.

(“Enveric” or the “Company”) is a biotechnology company dedicated to the development of novel

neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety, addiction, and other psychiatric disorders.

head office of the Company is located in Naples, Florida.

NOTES TO CONSOLIDATED FINANCIAL

BUSINESS AND LIQUIDITY AND

OTHER UNCERTAINTIES

Nature of Operations

Enveric Biosciences, Inc.

(“Enveric” or the “Company”) is a biotechnology company focused on developing next-generation, small-molecule

neuroplastogenic therapeutics that address unmet needs in psychiatric and neurological disorders.

The head office of the Company is located

in Cambridge, Massachusetts.

The Company has the following wholly-owned subsidiaries:

Jay Pharma Inc.

Pharma”), 1306432 B.C.

Ltd., 1236567 B.C.

Unlimited Liability Company, MagicMed Industries, Inc.

(“MagicMed”), Enveric

Biosciences Canada Inc., Akos Biosciences, Inc.

(“Jay Pharma”), 1306432

Unlimited Liability Company, 1236567 B.C.

Unlimited Liability Company, MagicMed USA, Inc.

(“MagicMed”), Enveric Biosciences

Canada Inc., Akos Biosciences, Inc.

(“Akos”), and Enveric Therapeutics, Pty.

(“Enveric Therapeutics”).

lead program, the EVM301 Series, and its lead drug candidate, EB-003, are intended to offer a first-in-class, new approach to the treatment

of difficult-to-address mental health disorders, mediated by the promotion of neuroplasticity and without also inducing hallucinations

in the patient.

Previously, Enveric was developing the EVM201 Series, and its lead drug candidate EB-002 (formerly EB-373), for the treatment

of neuropsychiatric disorders.

The EVM201 series comprised next generation synthetic prodrugs of the active metabolite, psilocin.

Enveric out-licensed the EVM201 Series program to MycoMedica Life Sciences, who will seek to develop, manufacture, and commercialize

EB-002, in exchange for certain development and milestone payments to Enveric.

Our primary focus is to develop our lead asset EB-003

in the EVM301 Series.

Company effected a 1-for-15 reverse stock split (“Reverse Stock Split”) on January 27, 2025, which began trading on a split-adjusted

basis on January 29, 2025, pursuant to which every 15 shares of the Company’s issued and outstanding common stock were reclassified

as one share of common stock.

The Reverse Stock Split had no impact on the par value of the Company’s common stock or the authorized

number of shares of common stock.

Unless otherwise indicated, all share and per share information in these consolidated financial statements

are retroactively adjusted to reflect the Reverse Stock Split, prior to the rounding of any fractional shares.

Any fractional share resulting

from the Reverse Stock Split were rounded up to the next whole number of shares, upon which 87,131 roundup shares were issued in January

Concern, Liquidity and Other Uncertainties

Company has incurred losses since inception resulting in an accumulated deficit of $ 106,074,505 as of December 31, 2024 and further losses

are anticipated in the development of its business.

Further, the Company has operating cash outflows of $ 7,726,139 for the year ended

December 31, 2024.

Enveric’s lead candidate,

EB-003, is the first known compound designed to selectively engage both 5-HT 2A and 5-HT 1B receptors with the potential

to deliver fast-acting, durable antidepressant and anxiolytic effects with outpatient convenience.

By leveraging a differentiated drug

discovery platform and a growing library of patent protected chemical structures, Enveric is advancing a pipeline of novel compounds designed

to promote neuroplasticity without hallucinogenic effects.

Previously, Enveric was developing the EVM201 Series, and its lead drug candidate

EB-002 (formerly EB-373), for the treatment of neuropsychiatric disorders.

The EVM201 series comprised next generation synthetic prodrugs

of the active metabolite, psilocin.

In the fourth quarter of 2024, Enveric out-licensed the EVM201 Series program to MycoMedica Life Sciences,

who will seek to develop, manufacture, and commercialize EB-002, in exchange for certain development and milestone payments to Enveric.

The Company unveiled an EVM401

Series on February 25, 2025, which is intended to broaden its pipeline with additional non-hallucinogenic molecules and strengthen the

Company’s ability to target addiction and neuropsychiatric disorders for patients with limited options.

While the Company intends to pursue

development of the EVM401 Series, its primary focus is to develop its lead asset EB-003 in the EVM301 Series.

The Company’s next

step is to advance EB-003 into formal preclinical development studies in support of a future Investigational New Drug (“IND”)

Reverse Stock Splits

The Company effected a 1-for-15

reverse stock split (“Reverse Stock Split”) on January 27, 2025, which began trading on a split-adjusted basis on January

29, 2025, pursuant to which every 15 shares of the Company’s issued and outstanding common stock, par value $ 0.01 per share (“Common

Stock”), were reclassified as one share of Common Stock.

The Reverse Stock Split had no impact on the par value of the Company’s

Common Stock or the authorized number of shares of Common Stock.

Any fractional share resulting from the Reverse Stock Split were rounded

up to the next whole number of shares, upon which 7,283 roundup shares were issued in January 2025.

The Company effected a 1-for-12

reverse stock split (“Second Reverse Stock Split”) on October 23, 2025, which began trading on a split-adjusted basis on October

28, 2025, pursuant to which every 12 shares of the Company’s issued and outstanding Common Stock were reclassified as one share

of Common Stock.

The Second Reverse Stock Split had no impact on the par value of the Company’s Common Stock or the authorized number

of shares of Common Stock.

Unless otherwise indicated, all share and per share information prior to the Second Reverse Stock Split date

of October 28, 2025 in these consolidated financial statements are retroactively adjusted to reflect the Second Reverse Stock Split, prior

to the rounding of any fractional shares.

Any fractional share resulting from the Second Reverse Stock Split were rounded up to the next

whole number of shares, upon which 78,682 roundup shares were issued in November 2025.

Going Concern, Liquidity and Other Uncertainties

The Company has incurred losses

since inception resulting in an accumulated deficit of $ 114,846,492 as of December 31, 2025 and further losses are anticipated in

the development of its business.

Further, the Company has operating cash outflows of $ 8,141,543 for the year ended December 31, 2025.

For the year ended December 31, 2025, the Company had a loss from operations of $ 8,774,448 .

Since inception, being

a research and development company, the Company has not yet generated revenue and the Company has incurred continuing losses from its

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

financial statements.

assessing the Company’s ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate

sufficient cash flow in the future to support its operating and capital expenditure commitments.

At December 31, 2024, the Company had

cash of $ 2,241,026 and working capital of $ 1,244,848 .

In January 2025, the Company raised net proceeds of approximately $ 4.2 million

from a public stock offering.

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 consolidated financial statements

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

through public or private equity or debt financings or other sources, and may include additional collaborations with third parties as

well as disciplined cash spending.

Adequate additional financing may not be available to the Company on acceptable terms, or at all.

Should the Company be unable to raise sufficient additional capital, the Company may be required to undertake further cost-cutting measures

including delaying or discontinuing certain operating activities.

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 consolidated financial statements are issued.

The Company’s consolidated

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

BIOSCIENCES, INC.

Since inception, being a research and

development company, the Company has not yet generated revenue and the Company has incurred continuing losses from its operations.

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 consolidated financial statements.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

May 16, 2024, the Company received a letter from Nasdaq notifying the Company that for the prior 30 consecutive business days the bid

price for the Company’s common stock had closed below the minimum $ 1.00 per share requirement for continued inclusion on Nasdaq

pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

The deficiency letter did not result in the immediate

delisting of the Company’s common stock from Nasdaq.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided

an initial period of 180 calendar days, until November 12, 2024, to regain compliance with the Bid Price Rule.

On November 20, 2024,

Nasdaq issued a delisting notice, indicating that the Company did not satisfy the Bid Price Rule by the compliance date and that unless

the Company requested an appeal of this determination before Nasdaq’s listing qualifications panel, the Company’s common

stock would be scheduled for delisting from Nasdaq and trading suspended.

The Company appealed the determination before Nasdaq’s

listing qualifications panel and on December 30, 2024, the Company received an extension until May 19, 2025, to regain compliance with

Bid Price Rule.

The Company has applied for a second 180-day compliance period.

The Company conducted the Reverse Stock Split on January

27, 2025, which became effective January 29, 2025, in order to regain compliance with the Minimum Bid Price Requirement.

has notified NASDAQ on February 11, 2025 that the Company has completed steps to cure the deficiency and regain compliance.

4, 2025, the Company received notice from the Nasdaq Office of General Counsel that the Company regained compliance with the Bid Price

NOTES TO CONSOLIDATED FINANCIAL

In assessing the Company’s

ability to continue as a going concern, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in

the future to support its operating and capital expenditure commitments.

At December 31, 2025, the Company had cash of $ 4,677,491

and working capital of $ 4,018,307 .

In January 2026, the Company raised net proceeds of approximately $ 1,300,000 from a registered direct

offering and in February 2026 raised net proceeds of approximately $ 1,300,000 from an at the market offering.

See Note 11 - Subsequent

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 consolidated financial statements are issued.

Management’s plan to

alleviate the conditions that raise substantial doubt include raising additional working capital through public or private equity or debt

financings or other sources, and may include additional collaborations with third parties as well as disciplined cash spending.

additional financing may not be available to the Company on acceptable terms, or at all.

Should the Company be unable to raise sufficient

additional capital, the Company may be required to undertake further cost-cutting measures including delaying or discontinuing certain

operating activities.

The Company’s consolidated financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation and Principal of Consolidation

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.

Basis of Presentation and Principal of Consolidation

The 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

All intercompany transactions have been eliminated in consolidation.

preparation of the consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amount of assets and liabilities at the date of the financial statements and expenses during the periods reported.

By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such

estimates in future periods could be significant.

Significant areas requiring management’s estimates and assumptions include determining

the fair value of transactions involving common stock, the valuation of warrants and preferred investment options, 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, 2024, 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 or the Australian dollar.

For the years ended December 31, 2024

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

As a result, 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

to hedge the impact of foreign currency exposures.

The Company may, however, hedge such exposure to foreign currency exchange fluctuations

in the future.

that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other comprehensive

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

and Cash Equivalents

Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Company did not have any cash equivalents as of December 31, 2024 and 2023.

BIOSCIENCES, INC.

Use of Estimates

The preparation of the consolidated

financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amount

of assets and liabilities at the date of the financial statements and expenses during the periods reported.

By their nature, these estimates

are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could

be significant.

Significant areas requiring management’s estimates and assumptions include determining the fair value of transactions

involving common stock, the valuation of warrants, and accruals associated with third party providers supporting research and development

Actual results could differ from those estimates.

Reclassification

Certain reclassifications

have been made to the prior period’s consolidated financial statements in order to conform to the current year presentation.

Company has reclassified investment option liability and warrant liability to accrued expenses and other current liabilities on the consolidated

balance sheets and change in fair value of investment option liability and warrant liability to other income on the consolidated statements

of operations in the current year.

The Company has also reclassified groupings of accrued expenses and other liabilities in Note 5 - Accrued

These reclassifications had no effect on the Company’s previously reported results of operations, changes in equity,

or cash flows.

Foreign Currency Translation

From inception through December 31,

2025, 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 or the Australian dollar.

For the years ended December 31, 2025 and 2024, the Company engaged in a number

of transactions denominated in Canadian dollars and Australian dollars.

As a result, the Company is subject to exposure from changes in

the exchange rates of the Canadian dollar and Australian dollar against the United States dollar.

The 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.

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.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Concentration

of Credit Risk

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, AUD$ 250,000 in Australia and C$ 100,000

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, 2024, the Company had greater than $ 250,000 at United States financial institutions, less

than AUD$ 250,000 at Australian financial institutions, and less than C$ 100,000 at Canadian financial institutions.

As of December 31, 2023,

the Company had greater than $ 250,000 at United States financial institutions, less than AUD$ 250,000 at Australian financial institutions,

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

Comprehensive

loss consists of two components, net loss and other comprehensive loss.

Other comprehensive loss refers to revenue, expenses, gains,

and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net loss.

Other comprehensive

loss consists of foreign currency translation adjustments from those subsidiaries not using the U.S.

NOTES TO CONSOLIDATED FINANCIAL

The Company has not entered

into any financial derivative instruments that expose it to material market risk, including any instruments designed to hedge the impact

of foreign currency exposures.

The Company may, however, hedge such exposure to foreign currency exchange fluctuations in the future.

Adjustments that arise from

exchange rate changes on transactions denominated in a currency other than the local currency are included in other comprehensive loss

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

Cash and Cash Equivalents

The Company considers all

highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

The Company did not have

any cash equivalents as of December 31, 2025 and 2024.

Concentration of Credit Risk

Financial 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, AUD$ 250,000 in Australia and C$ 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

As of December 31, 2025 and 2024, the Company had greater than $ 250,000 at United States financial institutions, less than

AUD$ 250,000 at Australian financial institutions, and less than C$ 100,000 at Canadian financial institutions.

Comprehensive Loss

Comprehensive loss consists

of two components, net loss and other comprehensive loss.

Other comprehensive loss refers to revenue, expenses, gains, and losses that

under GAAP are recorded as an element of shareholders’ equity but are excluded from net loss.

Other comprehensive loss consists

of foreign currency translation adjustments from those subsidiaries not using the U.S.

dollar as their functional currency.

assets consist of a license agreement.

The cost of license agreements is amortized over the economic life of the license.

assesses the carrying value of its intangible assets for impairment each year.

and equipment are recorded at cost.

Major property additions, replacements, and betterments are capitalized, while maintenance and repairs

that do not extend the useful lives of an asset or add new functionality are expensed as incurred.

Depreciation and amortization are

recorded using the straight-line method over the respective estimated useful lives of the Company’s long-lived assets.

The estimated

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, 2024,

the Company incurred $ 494,292 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 were proportionately offset against the

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

offering costs when the agreements were terminated.

As of December 31, 2024, the Company expensed the remaining balance of deferred offering

costs related to Lincoln Park as the Company no longer intends to use this purchase agreement, reflected in general and administration

expenses in the accompanying consolidated statement of operations.

Property & Equipment

Property and equipment are

recorded at cost.

Major property additions, replacements, and betterments are capitalized, while maintenance and repairs that do not extend

the useful lives of an asset or add new functionality are expensed as incurred.

Depreciation and amortization are recorded using the straight-line

method over the respective estimated useful lives of the Company’s long-lived assets.

The estimated useful lives are typically 3

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

Deferred Offering Costs

The 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.

The 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, 2025, the Company incurred $ 43,247 in

deferred offering costs in connection with a registration statement.

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.

As of December 31, 2025, the balance of deferred offering costs is $ 43,247 .

the year ended December 31, 2023, the Company incurred $ 567,603 in deferred offering costs in connection with the Distribution Agreement,

with Canaccord and the Purchase Agreement with 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.

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 “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.

BIOSCIENCES, INC.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

and Inducement of Warrants and Investment Options

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

For a warrant modification accounted for under

ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant over the fair

value of the original warrant immediately before its terms are modified, measured based on the fair value of the shares and other pertinent

factors at the modification date.

The accounting for incremental fair value of warrants is based on the specific facts and circumstances

related to the modification.

When a modification is directly attributable to equity offerings, the incremental change in fair value of

the warrants are accounted for as equity issuance costs.

Company 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

derivatives in accordance with ASC 815.

For derivative financial instruments that are accounted for as assets or liabilities, the derivative

instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the

fair value reported in the consolidated statements of operations.

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.

and Development

and development expenses are charged to operations as incurred.

Research and development expenses include, among other things, internal

and external costs associated with preclinical development, pre-commercialization manufacturing expenses, and clinical trials.

accrues for costs incurred as the services are being provided by monitoring the status of the trial or services provided and the invoices

received from its external service providers.

In the case of clinical trials, a portion of the estimated cost normally relates to the

projected cost to treat a patient in the trials, and this cost is recognized based on the number of patients enrolled in the trial.

actual costs become known, the Company adjusts its accruals accordingly.

and Development Tax Incentive Receivable

Company, through its wholly-owned subsidiary in Australia, participates in the Australian research and development tax incentive program,

such that a percentage of the Company’s qualifying research and development expenditures are reimbursed by the Australian government,

and such incentives are reflected as a reduction of research and development expense.

The Australian research and development tax incentive

is recognized when there is reasonable assurance that the incentive will be received, the relevant expenditure has been incurred and

the amount of the consideration can be reliably measured.

At each period end, management estimates the reimbursement available to the

Company based on available information at the time.

Company utilizes an asset and liability approach for financial accounting and reporting for income taxes.

The provision for income taxes

is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income.

Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets

and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that

some portion or all the deferred tax assets will not be realized.

Management makes judgments as to the interpretation of the tax laws

that might be challenged upon an audit and cause changes to previous estimates of tax liabilities.

In management’s opinion, adequate

provisions for income taxes have been made.

If actual taxable income by tax jurisdiction varies from estimates, additional allowances

or reversals of reserves may be necessary.

benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities.

amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement.

A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that

do not meet these recognition and measurement standards.

As of December 31, 2024 and 2023, no liability for unrecognized tax benefits

was required to be recorded.

BIOSCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL

Modification and Inducement of Warrants

A change in any of the terms

or conditions of warrants is accounted for as a modification.

For a warrant modification accounted for under ASC 815, the effect of a

modification shall be measured as the difference between the fair value of the modified warrant over the fair value of the original warrant

immediately before its terms are modified, measured based on the fair value of the shares and other pertinent factors at the modification

The accounting for incremental fair value of warrants is based on the specific facts and circumstances related to the modification.

When a modification is directly attributable to equity offerings, the incremental change in fair value of the warrants are accounted for

as equity issuance costs.

The Company accounts for the

inducement to exercise warrants in accordance with ASC Subtopic 470-20-40 “Debt with Conversion and Other Options” (“ASC

ASC 470-20-40 requires the recognition of a deemed dividend equal to the fair value of the consideration delivered

in excess of the consideration issuable under the original conversion terms.

However, as the Company is in an accumulated deficit position

as of the issuance dates, the resulting deemed dividend is recorded as a reduction of additional paid-in capital.

Research and Development

Research and development expenses

are charged to operations as incurred.

Research and development expenses include, among other things, internal and external costs associated

with preclinical development, pre-commercialization manufacturing expenses, and clinical trials.

The Company accrues for costs incurred

as the services are being provided by monitoring the status of the trial or services provided and the invoices received from its external

service providers.

In the case of clinical trials, a portion of the estimated cost normally relates to the projected cost to treat a patient

in the trials, and this cost is recognized based on the number of patients enrolled in the trial.

As actual costs become known, the Company

adjusts its accruals accordingly.

The Company utilizes an asset

and liability approach for financial accounting and reporting for income taxes.

The provision for income taxes is based upon income or

loss after adjustment for those permanent items that are not considered in the determination of taxable income.

Deferred income taxes

represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at

the enacted tax rates in effect for the years in which the differences are expected to reverse.

The Company evaluates the

recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the

deferred tax assets will not be realized.

Management makes judgments as to the interpretation of the tax laws that might be challenged

upon an audit and cause changes to previous estimates of tax liabilities.

In management’s opinion, adequate provisions for income

taxes have been made.

If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves

may be necessary.

Tax benefits are recognized

only for tax positions that are more likely than not to be sustained upon examination by tax authorities.

The amount recognized is measured

as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement.

A liability for “unrecognized

tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and

measurement standards.

As of December 31, 2025 and 2024, no liability for unrecognized tax benefits was required to be recorded.

The Company’s policy

for recording interest and penalties associated with tax audits is to record such items as a component of operating expenses.

no amounts accrued for penalties and interest for the years ended December 31, 2025 and 2024.

The Company does not expect its uncertain

tax positions to change during the next twelve months.

Management is currently unaware of any issues under review that could result in

significant payments, accruals or material deviations from its position.

The Company has identified

its United States and Canadian federal tax returns, and its state and provincial tax returns in 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,

Australian federal, and Canadian corporate tax returns for the year ended December 31, 2025.

Net operating losses for these periods

will not be available to reduce future taxable income until the returns are filed.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

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

There were no amounts accrued for penalties and interest for the years ended December 31, 2024 and 2023.

The Company does not

expect its uncertain tax positions to change during the next twelve months.

Management is currently unaware of any issues under review

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

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, Australian federal, and Canadian corporate tax returns for the year ended December 31,

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

such transactions to be accounted for using the fair value method.

Awards of shares for property or services are recorded at the more

readily measurable of the estimated fair value of the stock award and the estimated fair value of the service.

The Company uses the Black-Scholes

option-pricing model to determine the grant date fair value of certain stock-based awards under ASC 718.

The assumptions used in calculating

the fair value of stock-based awards represent management’s reasonable estimates and involve inherent uncertainties and the application

of management’s judgment.

Fair value of restricted stock units or restricted stock awards is determined by the closing price per

share of the Company’s common stock on the date of award grant.

estimated fair value is amortized as a charge to earnings on a straight-line basis, for awards or portions of awards that do not require

specified milestones or performance criteria as a vesting condition and also depending on the terms and conditions of the award, and

the nature of the relationship of the recipient of the award to the Company.

The Company records the grant date fair value in line with

the period over which it was earned.

NOTES TO CONSOLIDATED FINANCIAL

Stock-Based Compensation

The Company follows ASC 718,

Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to

be accounted for using the fair value method.

Awards of shares for property or services are recorded at the more readily measurable of

the estimated fair value of the stock award and the estimated fair value of the service.

The Company uses the Black-Scholes option-pricing

model to determine the grant date fair value of certain stock-based awards under ASC 718.

The assumptions used in calculating the fair

value of stock-based awards represent management’s reasonable estimates and involve inherent uncertainties and the application of

management’s judgment.

Fair value of restricted stock units or restricted stock awards is determined by the closing price per share

of the Company’s common stock on the date of award grant.

The estimated fair value is

amortized as a charge to earnings on a straight-line basis, for awards or portions of awards that do not require specified milestones

or performance criteria as a vesting condition and also depending on the terms and conditions of the award, and the nature of the relationship

of the recipient of the award to the Company.

The Company records the grant date fair value in line with the period over which it was

For employees and consultants, this is typically considered to be the vesting period of the award.

The Company accounts for forfeitures as they occur.

estimated fair value of awards that require specified milestones or recipient performance are charged to expense when such milestones

or performance criteria are probable to be met.

stock units, restricted stock awards, and stock options are granted at the discretion of the Compensation Committee of the Company’s

board of directors (the “Board of Directors”).

These awards are restricted as to the transfer of ownership and generally

vest over the requisite service periods, typically over a 12 to 48-month period.

A significant portion of these awards may include vesting

terms that include, without limitation, defined volume weighted average price levels being achieved by the Company’s Common Stock,

specific performance milestones, employment, or engagement by the Company, with no assurances of achievement of any such vesting conditions,

if applicable.

value of RSU’s is equal to the product of the number of units awarded, multiplied by the closing price per share of the Company’s

Common Stock on the date of the award.

The terms and conditions of each RSU is defined in the RSU agreement and includes vesting terms

that consist of any or all of the following:

immediate vesting, vesting over a defined period of time, vesting based on achievement of

a defined volume weighted average price levels at specified times, vesting based on achievement of specific performance milestones within

a specific time frame, change of control, termination of the employee without cause by the Company, resignation of the employee with

The value assigned to each RSU is charged to expense based on the vesting terms, as follows:

value of RSU’s that vest

immediately are charged to expense on the date awarded, value of RSU’s that vest based upon time, or achievement of stock price

levels over a period of time are charged to expense on a straight line basis over the time frame specified in the RSU and the value of

RSU’s that vest based upon achievement of specific performance milestones are charged to expense during the period that such milestone

Vested RSU’s may be converted to shares of Common Stock of an equivalent number upon either the termination of the

recipient’s employment with the Company, or in the event of a change in control.

If the recipient is not an employee, such person’s

engagement with the Company must either be terminated prior to such conversion of RSU’s to shares of Common Stock, or in the event

of a change in control.

Furthermore, as required by Section 409A of the Internal Revenue Code, if the recipient is a “specified

employee” (generally, certain officers and highly compensated employees of publicly traded companies), such recipient may only

convert vested RSU’s into shares of Common Stock no earlier than the first day of the seventh month following such recipients termination

of employment with the Company, or the event of change in control.

BIOSCIENCES, INC.

The Company accounts for forfeitures

as they occur.

The estimated fair value of

awards that require specified milestones or recipient performance are charged to expense when such milestones or performance criteria

are probable to be met.

Restricted stock units, restricted

stock awards, and stock options are granted at the discretion of the Compensation Committee of the Company’s board of directors

(the “Board”).

These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods,

typically over a 12 to 48-month period.

A significant portion of these awards may include vesting terms that include, without limitation,

defined volume weighted average price levels being achieved by the Company’s Common Stock, specific performance milestones, employment,

or engagement by the Company, with no assurances of achievement of any such vesting conditions, if applicable.

The value of RSU’s is

equal to the product of the number of units awarded, multiplied by the closing price per share of the Company’s Common Stock on

the date of the award.

The terms and conditions of each RSU is defined in the RSU agreement and includes vesting terms that consist of

any or all of the following:

immediate vesting, vesting over a defined period of time, vesting based on achievement of a defined volume

weighted average price levels at specified times, vesting based on achievement of specific performance milestones within a specific time

frame, change of control, termination of the employee without cause by the Company, resignation of the employee with good cause.

assigned to each RSU is charged to expense based on the vesting terms, as follows:

value of RSU’s that vest immediately are charged

to expense on the date awarded, value of RSU’s that vest based upon time, or achievement of stock price levels over a period of

time are charged to expense on a straight line basis over the time frame specified in the RSU and the value of RSU’s that vest based

upon achievement of specific performance milestones are charged to expense during the period that such milestone is achieved.

may be converted to shares of Common Stock of an equivalent number upon either the termination of the recipient’s employment with

the Company, or in the event of a change in control.

Furthermore, as required by Section 409A of the Internal Revenue Code, if the recipient

is a “specified employee” (generally, certain officers and highly compensated employees of publicly traded companies), such

recipient may only convert vested RSU’s into shares of Common Stock no earlier than the first day of the seventh month following

such recipients termination of employment with the Company, or the event of change in control.

The value of RSA’s is

equal to the product of the number of restricted shares awarded, multiplied by the closing price per share of the Company’s Common

Stock on the date of the award.

The terms and conditions of each RSA is defined in the RSA agreement and includes vesting terms that consist

of any or all of the following:

immediate vesting, vesting over a defined period of time, or vesting based on achievement of a defined

volume weighted average price levels at specified times.

Upon vesting, the recipient may receive restricted stock which includes a legend

prohibiting sale of the shares during a restriction period that is defined in the RSA agreement.

Termination of employment by or engagement

with the Company is not required for the recipient to receive restricted shares of Common Stock.

The value assigned to each RSA is charged

to expense based on the vesting terms, as follows:

value of RSA’s that vest immediately are charged to expense on the date awarded,

value of RSA’s that vest based upon time, or achievement of stock price levels over a period of time are charged to expense on a

straight-line basis over the time frame specified in the RSA.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

value of RSA’s is equal to the product of the number of restricted shares awarded, multiplied by the closing price per share of

the Company’s Common Stock on the date of the award.

The terms and conditions of each RSA is defined in the RSA agreement and includes

vesting terms that consist of any or all of the following:

immediate vesting, vesting over a defined period of time, or vesting based

on achievement of a defined volume weighted average price levels at specified times.

Upon vesting, the recipient may receive restricted

stock which includes a legend prohibiting sale of the shares during a restriction period that is defined in the RSA agreement.

of employment by or engagement with the Company is not required for the recipient to receive restricted shares of Common Stock.

assigned to each RSA is charged to expense based on the vesting terms, as follows:

value of RSA’s that vest immediately are charged

to expense on the date awarded, value of RSA’s that vest based upon time, or achievement of stock price levels over a period of

time are charged to expense on a straight-line basis over the time frame specified in the RSA.

Loss per Share

net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted loss per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding

during the period.

Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants

(using the treasury stock method).

The computation of basic net loss per share for the years ended December 31, 2024 and 2023 excludes

potentially dilutive securities.

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

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.

In accordance with ASC 260,

14,586 RSAs that were fully vested on December 31, 2024 were included in basic and dilutive earnings per share as there were no remaining

contingencies for these shares to be issued as of December 31, 2024.

NOTES TO CONSOLIDATED FINANCIAL

Net Loss per Share

Basic net loss per share is

computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted loss per

share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the

Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and warrants (using

the treasury stock method).

The computation of basic net loss per share for the years ended December 31, 2025 and 2024 excludes potentially

dilutive securities.

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

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.

In accordance with ASC 260, 1,274 RSUs

that were fully vested on December 31, 2025 were included in basic and dilutive earnings per share as there were no remaining contingencies

for these shares to be issued as of December 31, 2025.

In accordance with ASC 260, 1,216 RSAs that were fully vested on December 31, 2024

were included in basic and dilutive earnings per share as there were no remaining contingencies for these shares to be issued as of December

The shares were issued during January 2025.

dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share the years ended

December 31, 2024 and 2023 because the effect of their inclusion would have been anti-dilutive.

Potentially dilutive securities

outlined in the table below have been excluded from the computation of diluted net loss per share the years ended December 31, 2025 and

2024 because the effect of their inclusion would have been anti-dilutive.

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

3 unchanged sentences

Restricted stock units - unvested

Common stock in abeyance

Investment options to purchase shares of common stock

1 unchanged sentence

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 warrants

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

Value Measurements

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date.

To increase the comparability of fair value measures, the following hierarchy prioritizes

the inputs to valuation methodologies used to measure fair value:

1 - Valuations based on quoted prices for identical assets and liabilities in active markets.

2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and

liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other

inputs that are observable or can be corroborated by observable market data.

3 - Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions

made by other market participants.

These valuations require significant judgment.

certain financial instruments, including cash and accounts payable, the carrying amounts approximate their fair values as of December

31, 2024 and 2023 because of their short-term nature.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

lease assets are included within right-of-use operating lease asset and operating lease liabilities are included in current portion of

right-of-use operating lease obligation and non-current portion of right-of-use operating lease obligation on the consolidated balance

sheets as of December 31, 2024 and 2023.

The Company has elected not to present short-term leases as these leases have a lease term of

12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise.

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

The Company did not have any operating leases as of December 31, 2024 and 2023.

lease qualifies as a finance lease if any of the following criteria are met at the inception of the lease:

(i) there is a transfer of

ownership of the leased asset to the Company by the end of the lease term, (ii) the Company holds an option to purchase the leased asset

that it is reasonably certain to exercise, (iii) the lease term is for a major part of the remaining economic life of the leased asset,

(iv) the present value of the sum of lease payments equals or exceeds substantially all of the fair value of the leased asset, or (v)

the nature of the leased asset is specialized to the point that it is expected to provide the lessor no alternative use at the end of

the lease term.

All other leases are recorded as operating leases.

Finance lease payments are bifurcated into (i) a portion that is recorded

as interest expense and (ii) a portion that reduces the finance liability associated with the lease.

The Company did not have any finance

leases as of December 31, 2024 and 2023.

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

Company evaluates a reporting unit by first identifying its operating segments under ASC 280.

The Company then evaluates each operating

segment to determine if it includes one or more components that constitute a business.

If there are components within an operating segment

that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more

reporting units.

If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines

if the segments are economically similar and, if so, the operating segments are aggregated.

Company operates as one operating segment with a focus on developing novel neuroplastogenic small-molecule therapeutics for the treatment

of depression, anxiety, and addiction disorders.

The Company’s Chief Executive Officer (“CEO”) as the Chief Operating

Decision Maker (“CODM”), manages and allocates resources to the operations of the Company on a consolidated basis.

loss from operations, which is reported in the accompanying consolidated statements of operations, is the measure of segment profit or

loss that is regularly reviewed by the CODM.

This enables the CEO to assess the overall level of available resources and determine how

best to deploy these resources across research and development projects in line with the long-term company-wide strategic goals.

to the accompanying consolidated statements of operations for the presentation of consolidated loss from operations for the years ended

December 31, 2024 and 2023.

The measure of segment assets is reported in the accompanying consolidated balance sheets as “Total

assets.” There are no significant segment expenses as the expenses that are included in consolidated loss from operations are general

and administrative and research and development.

Accounting Pronouncements

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

2023-07 updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for all entities for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years

beginning after December 15, 2024.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company has adopted ASU 2023-07, and this guidance did not have a material impact on the Company’s consolidated financial statements.

BIOSCIENCES, INC.

Fair Value of Financial Instruments

The 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 warrants and preferred investment option

liabilities, primarily due to their short-term nature.

Fair Value Measurements

Fair value is defined as the

price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at

the measurement date.

To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation

methodologies used to measure fair value:

Level 1 - Valuations

based on quoted prices for identical assets and liabilities in active markets.

Level 2 - Valuations based on observable

inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted

prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated

by observable market data.

Level 3 - Valuations based on unobservable

inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants.

valuations require significant judgment.

For certain financial instruments,

including cash and accounts payable, the carrying amounts approximate their fair values as of December 31, 2025 and 2024 because

of their short-term nature.

Segment Reporting

The Company determines its

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

The Company evaluates a reporting

unit by first identifying its operating segments under ASC 280.

The Company then evaluates each operating segment to determine if it includes

one or more components that constitute a business.

If there are components within an operating segment that meet the definition of a business,

the Company evaluates those components to determine if they must be aggregated into one or more reporting units.

If applicable, when determining

if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if

so, the operating segments are aggregated.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which amends the

disclosure to address investor requests for more transparency about income tax information through improvements to income tax disclosures

primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness

of income tax disclosures.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, and early

adoption and retrospective application are permitted.

NOTES TO CONSOLIDATED FINANCIAL

The Company operates as one

operating segment with a focus on developing novel neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety,

and addiction disorders.

The Company’s Chief Executive Officer (“CEO”) as the Chief Operating Decision Maker (“CODM”),

manages and allocates resources to the operations of the Company on a consolidated basis.

Consolidated loss from operations, which is

reported in the accompanying consolidated statements of operations, is the measure of segment profit or loss that is regularly reviewed

This enables the CEO to assess the overall level of available resources and determine how best to deploy these resources

across research and development projects in line with the long-term company-wide strategic goals.

Refer to the accompanying consolidated

statements of operations for the presentation of consolidated loss from operations for the years ended December 31, 2025 and 2024.

measure of segment assets is reported in the accompanying consolidated balance sheets as “Total assets.” There are no significant

segment expenses as the expenses that are included in consolidated loss from operations are general and administrative and research and

Recent Accounting Pronouncements

In December 2023, the FASB

issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which amends the disclosure to address investor

requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate

reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, and early adoption and retrospective

application are permitted.

The Company has adopted ASU 2023-09 effective January 1, 2025.

The Company is in

the process of evaluating the impact of ASU 2023-09 on the Company’s consolidated financial statements which will be reflected

in the December 31, 2025 financial statements.

November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220):

Reporting Comprehensive Income - Expense Disaggregation

Disclosures, Disaggregation of Income Statement Expenses , that requires public companies to disclose, in interim and reporting periods,

additional information about certain expenses in the financial statements.

The impact of ASU 2023-09 on the Company’s

consolidated financial statements is reflected in Note 10 - Income Taxes.

In November 2024, the FASB

issued ASU 2024-03, Income Statement (Topic 220):

Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation

of Income Statement Expenses, that requires public companies to disclose, in interim and reporting periods, additional information about

certain expenses in the financial statements.

In January 2025, the FASB issued ASU No.

2025-01, Income

Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

2025-01, Income Statement - Reporting Comprehensive

Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective.

2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026 and interim reporting periods

beginning after December 15, 2027.

Early adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is currently assessing the potential impacts of ASU 2024-03.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

of December 31, 2024 and 2023, the prepaid expenses and other current assets of the Company consisted of the following:

ASU 2024-03, as clarified by ASU 2025-01, is

effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is currently assessing the potential

impacts of ASU 2024-03.

In December 2025, the FASB

issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which provides clarity about current interim disclosure

requirements and adds a disclosure principle that requires entities to disclose events since the end of the last annual reporting period

that have a material impact on the entity.

The amendments are effective for interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and the amendments should be applied either prospectively to financial statements issued for reporting periods

after the adoption date or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently

assessing the potential impacts of ASU 2025-11.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

PREPAID EXPENSES AND OTHER

CURRENT ASSETS

As of December 31, 2025

and 2024, the prepaid expenses and other current assets of the Company consisted of the following:

SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid value-added taxes

Prepaid other

December 31, 2025

December 31, 2024

Prepaid insurance

Prepaid research and development

Deferred offering costs (see Note 8)

Franchise tax receivable

R&D tax incentive receivable

Prepaid other

Prepaid product development

Deferred offering costs

Prepaid value-added taxes

Total prepaid expenses and other current assets

INTANGIBLE ASSETS

of December 31, 2024 and 2023, the Company’s intangible assets, which are located in the United States, consisted of:

SCHEDULE OF INTANGIBLE ASSETS

Definite lived intangible assets

Balance at January 1, 2023

Balance at December 31, 2023

Balance at December 31, 2024

identified definite lived intangible assets, there was no impairment expense during the years ended December 31, 2024 and 2023.

For identified

definite lived intangible assets, amortization expense amounted to $ 168,750 and $ 168,754 during the years ended December 31, 2024 and

2023, respectively.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company amortizes definite lived intangible assets on a straight-line basis over their estimated useful lives.

Amortization expense

of identified intangible assets based on the carrying amount as of December 31, 2024 is as follows:

OF FINITE LIVED INTANGIBLE ASSETS AMORTIZATION EXPENSE

Year ending December 31,

Finite lived assets amortization

PROPERTY AND EQUIPMENT

and equipment consists of the following assets which are located in Calgary, Canada, with all amounts translated into U.S.

OF PROPERTY AND EQUIPMENT NET OF ACCUMULATED DEPRECIATION

AND EQUIPMENT

Property and equipment consists

of the following assets which are located in Calgary, Canada, with all amounts translated into U.S.

SCHEDULE OF PROPERTY AND EQUIPMENT NET OF ACCUMULATED DEPRECIATION

December 31, 2025

December 31, 2024

Lab equipment

3 unchanged sentences

Property and equipment, net of accumulated depreciation

expense was $ 168,739 and $ 175,228 for the years ended December 31, 2024 and 2023, respectively.

ACCRUED LIABILITIES

of December 31, 2024 and December 31, 2023, the accrued liabilities of the Company consisted of the following:

Depreciation expense was $ 158,676

and $ 168,739 for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025

and December 31, 2024, the accrued liabilities of the Company consisted of the following:

SCHEDULE OF ACCRUED LIABILITIES

Product development

Accrued salaries, wages, and bonuses

December 31, 2025

December 31, 2024

Professional fees

Accrued restructuring costs

Accrued franchise taxes

Total accrued expenses

Product development

Total accrued liabilities

RELATED PARTY TRANSACTIONS

of December 31, 2024, there was $ 232,891 due to related parties.

This balance is related to payments due to board members of the Company.

Board member Sheila DeWitt has provided research and development services as an advisory consultant to the Company since May 2022.

services are provided as needed on an hourly basis.

During the year ended December 31, 2024, the Company incurred $ 189,125 in service

fees related to these services.

Of these fees, $ 176,125 has been paid and $ 13,000 is included in due to related parties on the consolidated

As of December 31, 2025 and

2024, the Company had current liabilities of $ 99,875 and $ 232,891 , respectively, due to related parties.

This balance is related to board

compensation payments due to members of the Board of the Company.

Board member Sheila DeWitt

has provided research and development services as an advisory consultant to the Company since May 2022.

These services are provided as

needed on an hourly basis.

During the year ended December 31, 2025, the Company incurred $ 3,250 in service fees related to these

Of these fees, $ 3,250 has been paid and there is no balance outstanding included in due to related parties on the consolidated

balance sheet as of December 31, 2025.

There was no balance outstanding at December 31, 2023.

SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS

holders of the Company’s common stock are entitled to one vote per share.

Holders of common stock are entitled to receive ratably

such dividends, if any, as may be declared by the Board of Directors out of legally available funds.

Upon the liquidation, dissolution,

or winding up of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available

for distribution.

As of December 31, 2024 and December 31, 2023, 100,000,000 shares of common stock and 20,000,000 shares of Preferred

Stock were authorized under the Company’s articles of incorporation.

Distribution Agreement

September 1, 2023, the Company entered into the Equity Distribution Agreement (the “Distribution Agreement”), with Canaccord,

Genuity LLC (“Canaccord”) pursuant to which the Company may offer and sell from time to time, through Canaccord as sales

agent and/or principal, shares of common stock of the Company having an aggregate offering price of up to $ 10.0 million.

Due to the offering

limitations applicable to the Company and in accordance with the terms of the Distribution Agreement, the Company may offer Common Stock

having an aggregate gross sales price of up to $ 2,392,514 pursuant to the prospectus supplement dated September 1, 2023 (the “Prospectus

Supplement”).

Subject to the terms and conditions of the Distribution Agreement, Canaccord may sell the Common Stock by any method

permitted by law deemed to be an “at-the-market offering”.

The Company will pay Canaccord a commission equal to 3.0 % of the

gross sales price of the Common Stock sold through Canaccord under the Distribution Agreement and has also agreed to reimburse Canaccord

for certain expenses.

The Company may also sell Common Stock to Canaccord as principal for Canaccord’s own account at a price agreed

upon at the time of sale.

Any sale of Common Stock to Canaccord as principal would be pursuant to the terms of a separate terms agreement

between the Company and Canaccord.

BIOSCIENCES, INC.

During the year ended December 31, 2024, the Company incurred $ 189,125 in service fees related

to these services.

Of these fees, $ 176,125 has been paid and $ 13,000 is included in due to related parties on the consolidated balance

sheet as of December 31, 2024.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain

holders (the “Holders”) of the warrants that were modified in July 2022 (the “February 2022 Post-Modification Warrants”)

and registered direct (“RD”) and the private investment in public equity (“PIPE”) preferred investment options

to purchase shares of the Company’s common stock (the “Existing Warrants and Investment Options”) pursuant to which

the Holders agreed to exercise for cash their Existing Warrants and Investment Options to purchase 74,800 shares of the Company’s

common stock, in the aggregate, at a reduced exercised price of $ 20.55 per share (from an original exercise price of $ 116.70 per share),

in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) to purchase up to 149,600

shares of the Company’s common stock (the “Inducement Warrant Shares”), and the Holders to make a cash payment of $ 1.88

per Inducement Warrant share for total proceeds of $ 280,500 .

In January 2024, the Company received aggregate gross proceeds of $ 1,817,640

from the exercise of the Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants.

Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants that exercised on December 28, 2023 and

unsettled until January 2024, the proceeds are included in the consolidated balance sheet as a subscription receivable as of December

As of December 31, 2023, 27,867 shares of the Existing Warrants and Investment Options exercised were considered issued as

the Company had the enforceable right to obtain the cash proceeds, which were in-transit, and the Holders were no longer able to rescind

the exercise election.

Due to the beneficial ownership limitation provisions, 46,934 shares of the Existing Warrants and Investment Options

exercised were initially unissued and held in abeyance for the benefit of the Holder until notice is received from the Holder that the

shares may be issued in compliance with such limitation.

During the year ended December 31, 2024, the Company issued all 46,934 shares

of common stock of the 46,934 shares of Existing Warrants and Investment Options exercised that were held in abeyance due to the beneficial

ownership limitation provisions.

December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain

holders of warrants and preferred investment options.

The Inducement Letters prohibit the Company from entering into any variable rate

transaction as defined in the Inducement Letters, including the issuance of (1) any variable priced debt or equity securities or (2)

transactions whereby the Company may issue securities at a future determined price, such as through an at-the-market offering or an equity

line of credit.

The variable rate transaction restriction would have expired after six-months from the closing date of December 28, 2023

for the Inducement Letters for an issuance through an at-the-market offering, and one-year for the remaining variable rate transactions,

however the restriction was waived for the at-the-market offering on March 8, 2024 and the equity line on May 3, 2024.

March 8, 2024, the Company entered into a series of common stock purchase agreements for the issuance in a registered direct offering

of 15,246 shares of the Company’s common stock to the Holders of the Inducement Warrants.

The issuance was made in exchange for

the permanent and irrevocable waiver of the variable rate transaction limitation solely with respect to the entry into and/or issuance

of shares of common stock in an at the market offering contained in the Inducement Letters.

The fair value of the shares issued for consideration

of waiving the variable rate transaction limitation was $ 322,453 and was charged to additional paid in capital, as it is direct and incremental

to the Distribution Agreement, on the consolidated balance sheet as an offering cost related to the Distribution Agreement.

the year ended December 31, 2024, the Company issued 111,200 shares of common stock for gross proceeds of $ 2,392,502 under the Distribution

Agreement, and charged offering costs of $ 583,713 to additional paid in capital on the consolidated balance sheet.

NOTES TO CONSOLIDATED FINANCIAL

CAPITAL AND OTHER EQUITY INSTRUMENTS

Authorized Capital

The holders of the Company’s

common stock are entitled to one vote per share.

Holders of common stock are entitled to receive ratably such dividends, if any, as may

be declared by the Board out of legally available funds.

Upon the liquidation, dissolution, or winding up of the Company, holders of common

stock are entitled to share ratably in all assets of the Company that are legally available for distribution.

As of December 31,

2024 and December 31, 2023, there were deferred offering costs related to the Distribution Agreement of $ 0 and $ 171,944 , respectively.

2025 and December 31, 2024, 100,000,000 shares of common stock and 20,000,000 shares of Preferred Stock were authorized under the

Company’s articles of incorporation.

On December 11, 2025, the Company’s stockholders authorized an amendment to the Company’s

Amended and Restated Certificate of Incorporation, as amended, to increase the authorized shares of Common Stock from 100,000,000 to 5,000,000,000 .

As of the date of the filing of this Annual Report on Form 10-K, the Company has not effected such amendment, and the authorized shares

of Common Stock remains 100,000,000 .

As approved by its stockholders, the Company may choose to effect the amendment at its sole discretion.

Equity Distribution Agreement

On September 1, 2023, the

Company entered into the Equity Distribution Agreement (the “Distribution Agreement”), with Canaccord, Genuity LLC (“Canaccord”)

pursuant to which the Company may offer and sell from time to time, through Canaccord as sales agent and/or principal, shares of common

stock of the Company having an aggregate offering price of up to $ 10.0 million.

Due to the offering limitations applicable to the Company

and in accordance with the terms of the Distribution Agreement, the Company may offer Common Stock having an aggregate gross sales price

of up to $ 2,392,514 pursuant to the prospectus supplement dated September 1, 2023 (the “Prospectus Supplement”).

the terms and conditions of the Distribution Agreement, Canaccord may sell the Common Stock by any method permitted by law deemed to be

an “at-the-market offering”.

The Company will pay Canaccord a commission equal to 3.0 % of the gross sales price of the Common

Stock sold through Canaccord under the Distribution Agreement and has also agreed to reimburse Canaccord for certain expenses.

may also sell Common Stock to Canaccord as principal for Canaccord’s own account at a price agreed upon at the time of sale.

sale of Common Stock to Canaccord as principal would be pursuant to the terms of a separate terms agreement between the Company and Canaccord.

On December 28, 2023, the

Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders (the “Holders”)

of the warrants that were modified in July 2022 (the “February 2022 Post-Modification Warrants”) and registered direct (“RD”)

and the private investment in public equity (“PIPE”) preferred investment options to purchase shares of the Company’s

common stock (the “Existing Warrants and Investment Options”) pursuant to which the Holders agreed to exercise for cash their

Existing Warrants and Investment Options to purchase 6,234 shares of the Company’s common stock, in the aggregate, at a reduced

exercised price of $ 246.60 per share (from an original exercise price of $ 1,400.40 per share), in exchange for the Company’s agreement

to issue new warrants (the “Inducement Warrants”) to purchase up to 12,467 shares of the Company’s common stock (the

“Inducement Warrant Shares”), and the Holders to make a cash payment of $ 22.56 per Inducement Warrant share for total proceeds

of $ 280,500 .

In January 2024, the Company received aggregate gross proceeds of $ 1,817,640 from the exercise of the Existing Warrants and

Investment Options by the Holders and the sale of the Inducement Warrants.

Because the Existing Warrants and Investment Options by the

Holders and the sale of the Inducement Warrants that exercised on December 28, 2023 and unsettled until January 2024, the proceeds are

included in the consolidated balance sheet as a subscription receivable as of December 31, 2023.

As of December 31, 2023, 2,322 shares

of the Existing Warrants and Investment Options exercised were considered issued as the Company had the enforceable right to obtain the

cash proceeds, which were in-transit, and the Holders were no longer able to rescind the exercise election.

Due to the beneficial ownership

limitation provisions, 3,912 shares of the Existing Warrants and Investment Options exercised were initially unissued and held in abeyance

for the benefit of the Holder until notice is received from the Holder that the shares may be issued in compliance with such limitation.

During the year ended December 31, 2024, the Company issued all 3,912 shares of common stock of the 3,912 shares of Existing Warrants

and Investment Options exercised that were held in abeyance due to the beneficial ownership limitation provisions.

On March 8, 2024, the Company

entered into a series of common stock purchase agreements for the issuance in a registered direct offering of 1,271 shares of the Company’s

common stock to the Holders of the Inducement Warrants.

The issuance was made in exchange for the permanent and irrevocable waiver of

the variable rate transaction limitation solely with respect to the entry into and/or issuance of shares of common stock in an at the

market offering contained in the Inducement Letters.

The fair value of the shares issued for consideration of waiving the variable rate

transaction limitation was $ 322,453 and was charged to additional paid in capital, as it is direct and incremental to the Distribution

Agreement, on the consolidated balance sheet as an offering cost related to the Distribution Agreement.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

During the year ended December

31, 2024, the Company issued 9,267 shares of common stock for gross proceeds of $ 2,392,502 under the Distribution Agreement, and charged

offering costs of $ 583,713 , of which $ 171,943 were previously deferred, to additional paid in capital on the consolidated balance sheet.

As of December 31, 2025 and December 31, 2024, there were no deferred offering costs related to the Distribution Agreement.

As of December 31, 2025, there is $ 0 available under the Distribution Agreement.

Park Equity Line

November 3, 2023, the Company entered into a Purchase Agreement (the “Purchase Agreement”) and a registration rights agreement

(the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which

Lincoln Park has committed to purchase up to $ 10.0 million of the Company’s common stock, subject to certain limitations and satisfaction

of the conditions set forth in the Purchase Agreement.

BIOSCIENCES, INC.

Lincoln Park Equity Line

On November 3, 2023, the Company

entered into a Purchase Agreement (the “Purchase Agreement”) and a registration rights agreement (the “Registration Rights

Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park has committed to purchase

up to $ 10.0 million of the Company’s common stock, subject to certain limitations and satisfaction of the conditions set forth in

the Purchase Agreement.

Under the terms and subject

to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park

is obligated to purchase up to $ 10.0 million of the Company’s Common Stock (the “Purchase Shares”).

However, such sales

of Common Stock by the Company, if any, will be subject to important limitations set forth in the Purchase Agreement, including limitations

on number of shares that may be sold.

Sales may occur from time to time, at the Company’s sole discretion, over the 24-month period

commencing on the date that the conditions to Lincoln Park’s purchase obligation set forth in the Purchase Agreement are satisfied,

including that a registration statement on Form S-1 covering the resale of the shares of the Company’s Common Stock that have been

and may be issued to Lincoln Park under the Purchase Agreement, which the Company has filed with the SEC pursuant to the Registration

Rights Agreement, is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC.

As required under the

Purchase Agreement, the Company registered a resale of 6,336 shares of the Company’s common stock, plus the 775 commitment shares, by

Lincoln Park on a registration statement on Form S-1 dated November 8, 2023, which was declared effective by the SEC on December 5, 2023.

As of July 30, 2024, there were no remaining shares available to be issued in connection with this registration statement.

4, 2024, the Company filed an amended Form S-1, which was declared effective by the SEC on September 11, 2024.

The amended Form S-1 registered

an additional 27,223 shares of common stock that are available to be issued to Lincoln Park in connection with this agreement.

Because the purchase price

per share to be paid by Lincoln Park for the shares of Common Stock that the Company may elect to sell to Lincoln Park under the Purchase

Agreement, if any, will fluctuate based on the market prices of the Company’s Common Stock at the time the Company elects to sell

shares to Lincoln Park pursuant to the Purchase Agreement, if any, it is not possible for the Company to predict the number of shares

of Common Stock that the Company will sell to Lincoln Park under the Purchase Agreement, the purchase price per share that Lincoln Park

will pay for shares purchased from the Company under the Purchase Agreement, or the aggregate gross proceeds that the Company will receive

from those purchases by Lincoln Park under the Purchase Agreement.

On May 3, 2024, the Company

entered into a series of common stock purchase agreements for the issuance in a registered direct offering of an aggregate of 2,545 shares

of the Company’s common stock, to certain institutional investors.

The issuance was made in exchange for the permanent and irrevocable

waiver of the variable rate transaction limitation with respect to any existing or future agreement by the Company to effect any issuance

of shares and issue such shares thereunder, as contained in those certain Inducement Offer Letters, dated December 28, 2023, between the

Company and those certain institutional investors.

The Company will not receive any net proceeds in connection with the offering.

fair value of the shares issued for consideration of waiving the variable rate transaction limitation was $ 448,840 and was recorded as

deferred offering costs, as direct and incremental to the Purchase Agreement, within prepaid expenses and other current assets on the

consolidated balance sheet related to the Purchase Agreement.

The common stock purchase

agreements contain customary representations and warranties and certain indemnification obligations of the Company.

The common stock purchase

agreements also restrict the Company from issuing, entering into any agreement to issue, or announcing the issuance of the Company’s

common stock from the date of the common stock purchase agreements until the earlier of 30 days after entering into the agreements or

at such time as one million ( 1,000,000 ) shares of the Company’s common stock have traded in the open market.

The closing of the

issuance of the Shares pursuant to the common stock purchase agreements closed on May 3, 2024.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

the terms and subject to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln

Park, and Lincoln Park is obligated to purchase up to $ 10.0 million of the Company’s Common Stock (the “Purchase Shares”).

However, such sales of Common Stock by the Company, if any, will be subject to important limitations set forth in the Purchase Agreement,

including limitations on number of shares that may be sold.

Sales may occur from time to time, at the Company’s sole discretion,

over the 24-month period commencing on the date that the conditions to Lincoln Park’s purchase obligation set forth in the Purchase

Agreement are satisfied, including that a registration statement on Form S-1 covering the resale of the shares of the Company’s

Common Stock that have been and may be issued to Lincoln Park under the Purchase Agreement, which the Company has filed with the SEC

pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus relating thereto is filed with

As required under the Purchase Agreement, the Company registered a resale of 76,032 shares of the Company’s common stock,

plus the 9,294 commitment shares, by Lincoln Park on a registration statement on Form S-1 dated November 8, 2023, which was declared

effective by the SEC on December 5, 2023.

As of July 30, 2024, there were no remaining shares available to be issued in connection with

this registration statement.

On September 4, 2024, the Company filed an amended Form S-1, which was declared effective by the SEC on

September 11, 2024.

The amended Form S-1 registered an additional 326,667 shares of common stock that are available to be issued to Lincoln

Park in connection with this agreement.

the purchase price per share to be paid by Lincoln Park for the shares of Common Stock that the Company may elect to sell to Lincoln

Park under the Purchase Agreement, if any, will fluctuate based on the market prices of the Company’s Common Stock at the time

the Company elects to sell shares to Lincoln Park pursuant to the Purchase Agreement, if any, it is not possible for the Company to predict

the number of shares of Common Stock that the Company will sell to Lincoln Park under the Purchase Agreement, the purchase price per

share that Lincoln Park will pay for shares purchased from the Company under the Purchase Agreement, or the aggregate gross proceeds

that the Company will receive from those purchases by Lincoln Park under the Purchase Agreement.

May 3, 2024, the Company entered into a series of common stock purchase agreements for the issuance in a registered direct offering of

an aggregate of 30,534 shares of the Company’s common stock, to certain institutional investors.

The issuance was made in exchange

for the permanent and irrevocable waiver of the variable rate transaction limitation with respect to any existing or future agreement

by the Company to effect any issuance of shares and issue such shares thereunder, as contained in those certain Inducement Offer Letters,

dated December 28, 2023, between the Company and those certain institutional investors.

The Company will not receive any net proceeds

in connection with the offering.

The fair value of the shares issued for consideration of waiving the variable rate transaction limitation

was $ 448,840 and was recorded as deferred offering costs, as direct and incremental to the Purchase Agreement, within prepaid expenses

and other current assets on the consolidated balance sheet related to the Purchase Agreement.

common stock purchase agreements contain customary representations and warranties and certain indemnification obligations of the Company.

The common stock purchase agreements also restrict the Company from issuing, entering into any agreement to issue, or announcing the

issuance of the Company’s common stock from the date of the common stock purchase agreements until the earlier of 30 days after

entering into the agreements or at such time as one million ( 1,000,000 ) shares of the Company’s common stock have traded in the

The closing of the issuance of the Shares pursuant to the common stock purchase agreements closed on May 3, 2024.

the year ended December 31, 2024, the Company had issued 159,366 shares of common stock, through the Purchase Agreement for gross cash

proceeds of $ 1,083,709 .

During the year ended December 31, 2024, the Company charged offering costs of $ 471,756 to additional paid in

capital on the consolidated balance sheet.

As of December 31, 2024 and 2023, the Company has capitalized deferred offering costs of $ 0

and $ 395,660 , respectively.

As of December 31, 2024, there were 243,334 shares available to be issued in connection with the Purchase

The Company engaged in a best efforts public offering in the first quarter of 2025 (described below), which restricts the

use of the Lincoln Park Equity Line for a period of one year from February 3, 2025.

Stock Activity

the year ended December 31, 2024 a total of 1,830 shares of common stock were issued pursuant to the vesting of restricted stock units.

During the year ended December 31, 2023 a total of 6,910 shares of common stock were issued pursuant to the vesting of restricted stock

to 2020 Long-Term Incentive Plan

May 3, 2022, the board of directors (“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 9,739 shares to a total of 13,334 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) 13,334 shares, and (y) 15% of the total number of shares of the Company’s common stock outstanding as of such issuance date

(the “Evergreen Provision”).

The Plan Amendment was approved by the Company’s shareholders at a special meeting of

the Company’s shareholders held on July 14, 2022.

BIOSCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL

During the year ended December

31, 2024, the Company had issued 13,278 shares of common stock, through the Purchase Agreement for gross cash proceeds of $ 1,083,709 .

During the year ended December 31, 2023, approximately $ 396,000 in offering costs was deferred.

During the year ended December 31, 2024,

an additional $ 494,000 in offering costs was incurred, of which the Company charged offering costs of $ 471,756 to additional paid in capital

on the consolidated balance sheet and the remaining $ 418,200 was expensed.

As of December 31, 2025 and 2024, the Company has capitalized

deferred offering costs of $ 0 .

The Company engaged in a best efforts public offering in the first quarter of 2025 (described below), which

restricted the use of the Lincoln Park Equity Line for a period of one year from February 3, 2025.

The Purchase Agreement expired on January

Public Offering

On January 30, 2025, the Company

commenced a best efforts public offering (the “Offering”) of an aggregate of (i) 102,444 shares (the “Shares”)

of Common Stock of the Company, (ii) 36,444 pre-funded warrants (the “Pre-Funded Warrants”) to purchase 36,444 shares of Common

Stock (the “Pre-Funded Warrant Shares”), (iii) 138,889 Series A warrants (the “Series A Warrants”) to purchase

138,889 shares of Common Stock (the “Series A Warrant Shares”), and (iv) 138,889 Series B warrants (the “Series B Warrants,”

and together with the Series A Warrants, the “Warrants”) to purchase 138,889 shares of Common Stock (the “Series B Warrant

Each Share or Pre-Funded Warrant was sold together with one Series A Warrant to purchase one share of Common Stock and

one Series B Warrant to purchase one share of Common Stock.

The offering price for each Share and accompanying Warrants was $ 36.00 , and

the offering price for each Pre-Funded Warrant and accompanying Warrants was $ 35.9988 .

The Pre-Funded Warrants have an exercise price

of $ 0.0012 per share, are exercisable immediately and will expire when exercised in full.

Each Warrant has an exercise price of $ 36.00

per share and will be exercisable immediately upon issuance (“Initial Exercise Date”).

The Series A Warrants expire on the

five-year anniversary of the Initial Exercise Date.

The Series B Warrants expire on the 18-month anniversary of the Initial Exercise Date.

The Offering closed on February

The net proceeds of the Offering, after deducting the fees and expenses of the Placement Agent (as defined below), described

in more detail below, and other offering expenses payable by the Company, but excluding the net proceeds from the exercise of the Warrants,

is $ 4,244,467 .

of the Warrants issued in connection with the Offering were determined to be equity classified in accordance with the guidance

at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.

In connection with the

Offering, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a certain

institutional investor.

Pursuant to the Securities Purchase Agreement, the Company agreed not to issue, enter into any agreement to

issue or announce the issuance or proposed issuance of any shares of Common Stock or any securities convertible into or exercisable

or exchangeable for shares of Common Stock or file any registration statement or prospectus, or any amendment or supplement thereto

for 60 days after the closing date of the Offering, subject to certain exceptions.

In addition, the Company has agreed not to effect

or enter into an agreement to effect any issuance of Common Stock or any securities convertible into or exercisable or exchangeable

for shares of Common Stock involving a variable rate transaction (as defined in the Securities Purchase Agreement) until the

one-year anniversary of the closing date of the Offering, subject to an exception.

A holder will not have the

right to exercise any portion of the Warrants or Pre-Funded Warrants if the holder (together with its affiliates) would beneficially own

in excess of 4.99% or 9.99%, as applicable, of the number of shares of Common Stock outstanding immediately after giving effect to the

exercise, as such percentage ownership is determined in accordance with the terms of the Warrants or the Pre-Funded Warrants, respectively.

Pursuant to an engagement

agreement, as amended, (the “Engagement Agreement”) with H.C.

Wainwright & Co., LLC (the “Placement Agent”),

the Company agreed to pay the Placement Agent in connection with the Offering (i) a cash fee equal to 7.0% of the aggregate gross proceeds

received in the Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds received in the Offering, (iii) a non-accountable

expense allowance of $ 25,000 , (iv) reimbursement of up to $100,000 for legal fees and expenses and other out of pocket expenses and (v)

up to $ 15,950 for the clearing expenses.

Also pursuant to the Engagement

Agreement, the Company, in connection with the Offering, agreed to issue to the Placement Agent or its designees warrants (the “Placement

Agent Warrants”) to purchase up to an aggregate of 9,723 shares of Common Stock (the “Placement Agent Warrant Shares”)

(which represents 7.0 % of the Shares and Pre-Funded Warrants sold in the Offering).

The Placement Agent Warrants have an exercise price

of $ 45.00 per share (which represents 125 % of the public offering price per Share and accompanying Warrants), expire on February 3, 2030 ,

and are exercisable following the Initial Exercise Date.

The grant date fair value of the Placement Agent Warrants were $ 148,000 on February

3, 2025 and were recorded as offering costs .

The measurement of fair value of Placement Agent Warrants were determined utilizing

a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $ 21.72 , exercise price

of $ 45.00 , term of five years , volatility of 106 %, risk-free rate of 4.4 %, and expected dividend rate of 0 %).

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

November 2, 2023, the stockholders approved the amendments to the 2020 Long-Term Incentive Plan, which was approved by the Board on August

8, 2023 (the “Amended Incentive Plan”).

The Amended Incentive Plan (i) increased the number of authorized shares reserved

for issuance under the Amended Incentive Plan to a maximum of 23,334 , subject to equitable adjustment, and (ii) removed the Evergreen

Provision implemented in the Plan Amendment.

During the first quarter of 2024, the Board approved an equitable adjustment to increase

the number of shares available under the Plan by 8,986 shares.

Effective October 9, 2024, the Board approved an equitable adjustment

to increase the number of shares available under the Incentive Plan by 64,402 shares, which increased the total number of authorized

shares under the Incentive Plan to 96,721 shares.

As of December 31, 2024, the total number of shares available for grant under the Incentive

Plan was 25,659 .

summary of the stock option activity under the Company’s incentive plan for the years ended December 31, 2024 and 2023 is presented

SCHEDULE OF STOCK OPTION

Number of Shares

Weighted Average Exercise Price

Weighted Average Grant Date Fair Value

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value

Outstanding at January 1, 2023

Outstanding at December 31, 2023

Outstanding at December 31, 2024

Exercisable at December 31, 2024

Company’s stock based compensation expense, recorded within general and administrative expense in the consolidated statement of

operations and comprehensive loss, related to stock options for the years ended December 31, 2024 and 2023 was $( 5,441 ) and $ 156,075 ,

NOTES TO CONSOLIDATED FINANCIAL

As of December 31, 2025,

a total of 36,444 shares of Common Stock have been issued due to exercises of the Pre-Funded Warrants.

Prior to the inducement warrant

transaction discussed below, 2,084 shares of Common Stock have been issued due to exercises of the Series B Warrants for cash proceeds

of $ 75,044 .

Inducement Warrant Transactions

On September 17, 2025, the

Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders of the Company’s

Series A Warrants and Series B Warrants originally issued in February 2025 (collectively, the “Existing Warrants”), which

closed on September 18, 2025.

Pursuant to the Inducement Letters, the holders agreed to exercise for cash their Existing Warrants to purchase

202,083 shares of the Company’s Common Stock, in the aggregate, at a reduced exercise price of $ 10.98 per share (from an original

exercise price of $ 36.00 per share), in exchange for the Company’s agreement to issue new warrants (the “Series C Warrants”

and “Series D Warrants,” collectively, the “Inducement Warrants”) to purchase up to 404,166 shares of the Company’s

Common Stock under each series (the “Inducement Warrant Shares”).

Pursuant to Nasdaq Listing Rule 5635(d), the Company is

required to obtain approval from the Company’s stockholders before issuing any underlying Inducement Warrant Shares upon exercise

of the Inducement Warrants (“Stockholder Approval”).

Stockholder Approval was received on December 11, 2025.

The Series C Warrants have

an exercise price of $ 10.98 per share and expire five years from the date Stockholder Approval was received.

The Series D Warrants have

the same exercise price and expire eighteen months from the date Stockholder Approval was received.

The inducement warrant transaction

closed on September 18, 2025.

The Company received aggregate gross proceeds of $ 2,218,873 from the exercise of the Existing Warrants by

of the Inducement Warrants issued in connection with the inducement warrant transaction were determined to be equity classified in accordance

with the guidance at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.

The Company engaged the Placement

Agent to act as its exclusive placement agent in connection with the transactions summarized above and agreed to pay the Placement Agent

a cash fee equal to 7.0% of the gross proceeds as well as a management fee equal to 1.0% of the aggregate gross proceeds from the exercise

of the Existing Warrants, plus reimbursement for certain expenses and the issuance of 14,146 placement agent warrants.

The placement agent

warrants have the same terms as the Series C Warrants, except the placement agent warrants have an exercise price of $ 13.7256 per share.

The grant date fair value of these placement agent warrants was estimated to be $ 90,000 on September 18, 2025 and was charged to additional

paid-in capital as issuance costs.

The fair value was determined utilizing a Black-Scholes model considering all relevant assumptions

current at the date of issuance (i.e., (1) risk-free interest rate of 3.6 %;

(2) expected life in years of 5.23 ;

(3) expected stock volatility

and (4) expected dividend yields of 0 %).

The Company also incurred legal and other offering-related fees of $ 334,659 , which

were similarly charged to additional paid-in capital.

The Company agreed to file

a registration statement on Form S-3 covering the resale of the Inducement Warrant Shares issued or issuable upon the exercise of the

Inducement Warrants within 10 days of entering into the Inducement Letters.

Pursuant to the Inducement Letters, the Company agreed not

to issue any shares of Common Stock or Common Stock equivalents or to file any other registration statement with the SEC (in each case,

subject to certain exceptions) for a period ending on October 2, 2025.

The Company also agreed not to effect or agree to effect any variable

rate transaction (as defined in the Inducement Letters) until September 17, 2026.

In connection with this inducement

warrant transaction, the Company determined the fair value of the Existing Warrants immediately prior to the Inducement Letters and the

intrinsic value of the Existing Warrants immediately after the modification.

The fair value of the Existing Warrants immediately prior

to the Inducement Letters was $ 636,662 and was determined utilizing a Black-Scholes model considering all relevant assumptions current

at the date of issuance (i.e., (1) risk-free interest rate of 3.6 %;

(2) expected life in years of 4.38 and 0.88 for the Series A Warrants

and Series B Warrants, respectively (3) expected stock volatility of 129.0 % and 134.0 % for the Series A Warrants and Series B Warrants,

respectively;

of December 31, 2024, the Company had $ 1,932 in unamortized stock option expense, which will be recognized over a weighted average period

of 1.15 years.

of Restricted Stock Units

Company’s activity in restricted stock units was as follows for the year ended December 31, 2024:

and (4) expected dividend yields of 0 %).

The reduced Existing Warrants were exercisable at market price and therefore had

no fair value.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

The measurement of fair value

of the Inducement Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of

issuance (i.e., (1) risk-free interest rates of 3.6 % and 3.5 % for the Series C Warrants and Series D Warrants, respectively;

life in years of 5.23 and 1.73 for the Series C Warrants and Series D Warrants, respectively;

(3) expected stock volatility of 126.0 %

and 125.0 % for the Series C Warrants and Series D Warrants, respectively;

and (4) expected dividend yields of 0 %).

The grant date fair

value of these Inducement Warrants was estimated to be $ 2,150,111 on September 18, 2025 and is reflected within additional paid-in capital

as of December 31, 2025.

The deemed dividend, calculated as the difference between the fair value of all securities and other consideration

transferred in the transaction in excess of the fair value of securities issuable pursuant to the original warrant terms, was $ 1,513,449 .

In accordance with ASC 260, earnings per share, the deemed dividend was also recorded as an increase in net loss available to common stockholders

for purposes of calculating net loss per share.

On December 11, 2025, the

Company entered into warrant exercise inducement offer letters (the “December Inducement Letters”) with certain holders of

the Company’s outstanding common stock purchase warrants originally issued in February 2025 and September 2025 (the “Existing

Series A, B, C, and D Warrant”).

Pursuant to the December Inducement Letters, the holders agreed to exercise for cash their Existing

Warrants to purchase 426,390 shares of the Company’s common stock, in the aggregate, at a reduced exercise price of $ 7.05 per share

(from original exercise prices of $ 36.00 and $ 10.98 per share) and pay a purchase price of $ 0.125 per share, in exchange for the Company’s

agreement to issue new warrants (the “Series E Warrants” and “Series F Warrants,” collectively, the “December

Inducement Warrants”) to purchase up to 426,390 shares of the Company’s common stock under each series (the “December

Inducement Warrant Shares”).

The closing of the transactions contemplated pursuant to the Inducement Letters was December 12, 2025

(the “Closing Date”)

The Series E Warrants have

an exercise price of $ 7.05 per share and expire five years following the effective date of the resale registration statement covering

the shares issuable upon exercise.

The Series F Warrants have the same exercise price and expire eighteen months following the effective

date of the resale registration statement.

The Company received aggregate gross proceeds of $ 3,112,647 from the exercise of the Existing

Warrants by the holders.

All of the December Inducement

Warrants issued in connection with the inducement warrant transaction were determined to be equity classified in accordance with the guidance

at ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging.

The Company engaged the Placement

Agent to act as its exclusive placement agent in connection with the transactions summarized above and agreed to pay Placement Agent a

cash fee equal to 7.0 % of the gross proceeds, plus reimbursement for certain expenses and the issuance of 29,847 placement agent warrants.

The placement agent warrants have the same terms as the Series E Warrants, except the placement agent warrants have an exercise price

of $ 9.125 per share ( 125 % of the offering price).

The grant date fair value of these placement agent warrants was estimated to be $ 126,000

on December 11, 2025 and was charged to additional paid-in capital as issuance costs.

The fair value of the placement agent

warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., (1)

risk-free interest rate of 3.7 %;

(2) expected life in years of 5.21 ;

(3) expected stock volatility of 114.0 %;

and (4) expected dividend

yield of 0 %.)

The Company also incurred

legal and other offering-related fees of $ 438,252 , which were similarly charged to additional paid-in capital.

In connection with this inducement

warrant transaction, the Company determined the fair value of the Existing Warrants immediately prior to the December Inducement Letters

and the intrinsic value of the Existing Warrants immediately after the modification.

The fair value of the Existing Warrants immediately

prior to the Inducement Letters was $ 1,388,134 and was determined utilizing a Black-Scholes model considering all relevant assumptions

current at the date of issuance (i.e., (1) risk-free interest rate of 3.5 - 3.7 %;

(2) expected life in years of 0.64 - 5.00 ;

stock volatility of 116.0 % - 149.0 %;

and (4) expected dividend yields of 0 %).

The reduced Existing Warrants were exercisable at market

price and therefore had no fair value.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

The measurement of fair value

of the December Inducement Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the

date of issuance (i.e., (1) risk-free interest rates of 3.7 % and 3.5 % for the Series E Warrants and Series F Warrants, respectfully;

expected life in years of 5.21 and 1.70 for the Series E Warrants and Series F Warrants, respectfully (3) expected stock volatility of

114.0 % and 138.0 % for the Series E Warrants and Series F Warrants, respectfully;

and (4) expected dividend yields of 0 %.).

The grant date

fair value of these December Inducement Warrants was estimated to be $ 3,234,170 on December 12, 2025, and is reflected within additional

paid-in capital as of December 31, 2025.

The deemed dividend, calculated as the difference between the fair value of all securities and

other consideration transferred in the transaction in excess of the fair value of securities issuable pursuant to the original warrant

terms, was $ 1,846,036 .

In accordance with ASC 260, earnings per share, the deemed dividend was also recorded as an increase in net loss

available to common stockholders for purposes of calculating net loss per share.

At the Market Offering

The Company entered into an

at the market offering agreement, or the (“ATM Agreement”), with H.C.

Wainwright & Co., LLC, or (“Wainwright”),

acting as sales agent, on April 9, 2025, relating to shares of Common Stock.

Under the ATM Agreement, the Company may offer and sell shares

of Common Stock having an aggregate offering price of up to $ 1,854,151 from time to time through Wainwright.

Wainwright will receive 3%

of the gross sales price of the shares sold as a placement fee.

Because the purchase price

per share to be paid for the shares of Common Stock that the Company may elect to sell under the ATM Agreement, if any, will fluctuate

based on the market prices of the Company’s Common Stock at the time the Company elects to sell shares pursuant to the ATM Agreement,

if any, it is not possible for us to predict the number of shares of Common Stock that the Company will sell under the ATM Agreement,

the purchase price per share the buyer will pay for shares purchased from the Company under the ATM Agreement, or the aggregate gross

proceeds that the Company will receive from those purchases under the ATM Agreement.

As of December 31, 2025,

the Company has issued 110,242 shares under the ATM Agreement for net cash proceeds of $ 1,636,799 .

Common Stock Activity

During the year ended December 31,

2025 a total of 39,380 shares of common stock were issued pursuant to the vesting of restricted stock awards.

During the year ended December

31, 2024 a total of 153 shares of common stock were issued pursuant to the vesting of restricted stock units.

Stock Options

Amendment to 2020 Long-Term Incentive Plan

On November 2, 2023, the

stockholders approved the amendments to the 2020 Long-Term Incentive Plan, which was approved by the Board on August 8, 2023 (the “Amended

Incentive Plan”).

The Amended Incentive Plan (i) increased the number of authorized shares reserved for issuance under the Amended

Incentive Plan to a maximum of 1,945 ,

subject to equitable adjustment, and (ii) removed the evergreen provision implemented in the May 2022 Plan Amendment.

During the first

quarter of 2024, the Board approved an equitable adjustment to increase the number of shares available under the Plan by 749

Effective October 9, 2024, the Board approved an equitable adjustment to increase the number of shares available under the Incentive

Plan by 5,367

Effective March 21, 2025, the Board approved an equitable adjustment to increase the number of shares available under the Incentive

Plan by 24,978

Effective December 12, 2025, the Board approved an equitable adjustment to increase the number of shares available under the

Incentive Plan by 131,110

shares which increased the total number of authorized shares under the Incentive Plan to 164,148

As of December 31, 2025, there were no shares available for grant under the Incentive Plan.

The Company’s stock

based compensation expense, recorded within general and administrative expense in the consolidated statement of operations and comprehensive

loss, related to stock options for the years ended December 31, 2025 and 2024 was $ 1,656 and $( 5,441 ), respectively.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Issuance of Restricted Stock Units

The Company’s activity

in restricted stock units was as follows for the years ended December 31, 2025 and 2024:

SCHEDULE OF RESTRICTED STOCK UNITS

Number of shares

Weighted average fair value

Weighted average

Non-vested at January 1, 2024

1 unchanged sentence

Non-vested at December 31, 2025

the years ended December 31, 2024 and 2023, the Company recorded $ 1,475,947 and $ 1,994,085 , respectively, in stock-based compensation

expense related to restricted stock units, which is a component of both general and administrative and research and development expenses

in the consolidated statement of operations and comprehensive loss.

As of December 31, 2024, the Company had unamortized stock-based

compensation costs related to restricted stock units of $ 892,536 which will be recognized over a weighted average period of 1.91 years.

As of December 31, 2024, 1,369 restricted stock units are vested without shares of common stock being issued, with all of these shares

due as of December 31, 2024.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

following table summarizes the Company’s recognition of stock-based compensation for restricted stock units for the following periods:

For the years ended December

31, 2025 and 2024, the Company recorded $ 647,435 and $ 1,475,947 , respectively, in stock-based compensation expense related to restricted

stock units, which is a component of both general and administrative and research and development expenses in the consolidated statement

of operations and comprehensive loss.

As of December 31, 2025, the Company had unamortized stock-based compensation costs related

to restricted stock units of $ 1,012,614 which will be recognized over a weighted average period of 3.27 years.

As of December 31,

2025, 1,550 restricted stock units are vested without shares of common stock being issued, with all of these shares due as of December 31,

The following table summarizes

the Company’s recognition of stock-based compensation for restricted stock units for the following periods:

OF STOCK-BASED COMPENSATION FOR RESTRICTED STOCK UNITS

5 unchanged sentences

expense for RSUs

Company’s activity in restricted common stock was as follows for the years ended December 31, 2024:

Restricted Stock Awards

The Company’s activity

in restricted common stock was as follows for the years ended December 31, 2025 and 2024:

OF RESTRICTED STOCK UNITS

Number of shares

Weighted average fair value

Weighted average

Non-vested at January 1, 2024

Non-vested at December 31, 2024

the years ended December 31, 2024 and 2023, the Company recorded $ 91,886 and $ 0 , respectively, in stock-based compensation expense within

general and administrative expense, related to restricted stock awards.

As of December 31, 2024, there were no unamortized stock-based

compensation costs related to restricted share awards.

The balance of Common Shares related to the vested restricted stock awards as

of December 31, 2024 will be issued during the 2025 calendar year.

There are 14,586 vested and unissued shares of restricted stock awards

as of December 31, 2024.

These shares were issued during the first quarter of 2025.

and Preferred Investment Options

following table summarizes information about shares issuable under warrants outstanding at December 31, 2024 and 2023:

Non-vested at December 31, 2025

For the years ended December 31, 2025 and

2024, the Company recorded $ 178,232 and $ 91,886 , respectively, in stock-based compensation expense within general and administrative expense,

related to restricted stock awards.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

Warrants and Preferred Investment Options

The following table summarizes

information about shares issuable under warrants outstanding at December 31, 2025 and 2024:

SCHEDULE OF WARRANTS OUTSTANDING

7 unchanged sentences

Exercisable at December 31, 2025

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

following table summarizes information about investment options outstanding at December 31, 2024 and 2023:

The following table summarizes

information about investment options outstanding at December 31, 2025 and 2024:

SCHEDULE OF INVESTMENT OPTIONS

7 unchanged sentences

Exercisable at December 31, 2025

December 28, 2023, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain

holders (the “Holders”) of the February 2022 Post-Modification Warrant and RD and PIPE preferred investment options to purchase

shares of the Company’s common stock (the “Existing Warrants and Investment Options”) pursuant to which the Holders

agreed to exercise for cash their Existing Warrants and Investment Options to purchase 74,800 shares of the Company’s common stock,

in the aggregate, at a reduced exercised price of $ 20.55 per share (from an original exercise price of $ 116.70 per share), in exchange

for the Company’s agreement to issue new warrants (the “Inducement Warrants”) to purchase up to 149,600 shares of the

Company’s common stock (the “Inducement Warrant Shares”), and the Holders to make a cash payment of $ 1.88 per Inducement

Warrant share for total proceeds of $ 280,500 .

In January 2024, the Company received aggregate gross proceeds of $ 1,817,640 from the exercise

of the Existing Warrants and Investment Options by the Holders and the sale of the Inducement Warrants.

Because the Existing Warrants

and Investment Options by the Holders and the sale of the Inducement Warrants that exercised on December 28, 2023 and unsettled until

January 2024, the proceeds are included in the consolidated balance sheet as a subscription receivable as of December 31, 2023.

December 31, 2023, 27,867 shares of the Existing Warrants and Investment Options exercised were considered issued as the Company had

the enforceable right to the obtain the cash proceeds, which were in-transit, and the Holders were no longer able to rescind the exercise

Due to the beneficial ownership limitation provisions, 46,934 shares of the Existing Warrants and Investment Options exercised

were initially unissued and held in abeyance for the benefit of the Holder until notice is received from the Holder that the shares may

be issued in compliance with such limitation.

The Company engaged Roth Capital Partners, LLC (“Roth”) to act as its financial

advisor in connection with the transactions summarized above and has paid Roth approximately $144,000 for its services, in addition to

reimbursement for certain expenses.

Roth was also issued warrants to purchase up to 4,488 shares of common stock.

The Roth Warrants have

the same terms as the Inducement Warrants.

The grant date fair value of these Roth Warrants was estimated to be $77,991 on December 28,

2023 and were charged to additional paid in capital as issuance costs.

The Company also incurred legal fees of $17,254 related to the

transactions above that were charged to additional paid in capital as issuance costs.

Company also agreed to file a registration statement on Form S-3 covering the resale of the Inducement Warrant Shares issued or issuable

upon the exercise of the Inducement Warrants (the “Resale Registration Statement”) by January 8, 2024 (filed January 11,

In the Inducement Letters, the Company agreed not to issue any shares of common stock or common stock equivalents or to file any

other registration statement with the SEC (in each case, subject to certain exceptions) for a period ending on February 26, 2024.

Company also agreed not to effect or agree to effect any variable rate transaction (as defined in the Inducement Letters) until December

See the Equity Distribution Agreement section of this Note.

connection with this transaction, the Company determined the fair value of the Existing Warrants and Investment Options immediately prior

to the Inducement Letters and the fair value of the amended warrants and investment options immediately after the Inducement Letters.

The pre-modification measurement of fair value of the Existing Warrants and Investment Options were determined utilizing a Black-Scholes

model considering all relevant assumptions current at the date of modification (i.e.

for the Existing Warrants share price of $ 23.40 ,

exercise price of $ 116.70 , term of 3.6 years, volatility of 94 %, risk-free rate of 3.96 %, and expected dividend rate of 0 %, resulting

in a fair value per share of $ 8.10 and for the Investment Options share price of $ 23.40 , exercise price of $ 116.70 , term of 4.1 years,

volatility of 95 %, risk-free rate of 3.90 %, and expected dividend rate of 0 %, resulting in a fair value per share of $ 9.30 ).

fair value of the 8,134 Existing Warrants and 66,667 Investment Options was $ 65,349 and $ 618,648 , respectively.

The post-modification

fair value was determined using the intrinsic value of $ 2.85 due to the inducement and totaled $ 23,180 and $ 190,000 for the Existing

Warrants and Investment Options, respectively.

The change in fair value from the date of the modification prior to modification and the

fair value on the date of the modification after the modification, but prior to exercise was $ 470,817 , which was reflected as an inducement

gain, within other expenses on the Company’s consolidated statement of operations and comprehensive loss.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

grant date fair value of these Inducement Warrants was estimated to be $ 2,599,552 on December 28, 2023 and the proceeds of $ 280,500 ,

which were received on January 2, 2024, for the issuance of the Inducement Warrants is reflected as inducement expense, within other

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

Company established the initial fair value of its equity classified Inducement Warrants at the date of issuance on December 28, 2023.

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 valuation of the warrants are below:

OF BLACK SCHOLES VALUATION MODEL FOR VALUATION OF WARRANTS

Roth and Inducement Warrants

December 28, 2023

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of warrants

Value (per share)

C Preferred Shares

May 3, 2022, the Board of Directors (the “Board”) declared a dividend of one one-thousandth of a share of the Company’s

Series C Preferred Stock (“Series C Preferred Stock”) for each outstanding share of the Company’s common stock held

of record as of 5:00 p.m.

Eastern Time on May 13, 2022 (the “Record Date”).

This dividend was based on the number of outstanding

shares of common stock prior to the Reverse Stock Split.

The outstanding shares of Series C Preferred Stock were entitled to vote together

with the outstanding shares of the Company’s common stock, as a single class, exclusively with respect to a proposal giving the

Board the authority, as it determines appropriate, to implement a reverse stock split within twelve months following the approval of

such proposal by the Company’s stockholders (the “Reverse Stock Split Proposal”), as well as any proposal to adjourn

any meeting of stockholders called for the purpose of voting on the Reverse Stock Split Proposal (the “Adjournment Proposal”).

Company held a special meeting of stockholders on July 14, 2022 (the “Special Meeting”) for the purpose of voting on, among

other proposals, a Reverse Stock Split Proposal and an Adjournment Proposal.

All shares of Series C Preferred Stock that were not present

in person or by proxy at the Special Meeting were automatically redeemed by the Company immediately prior to the opening of the polls

at Special Meeting (the “Initial Redemption”).

All shares that were not redeemed pursuant to the Initial Redemption were

redeemed automatically upon the approval by the Company’s stockholders of the Reverse Stock Split Proposal at the Special Meeting

(the “Subsequent Redemption” and, together with the Initial Redemption, the “Redemption”).

Each share of Series

C Preferred Stock was entitled to receive $0.10 in cash for each 10 whole shares of Series C Preferred Stock immediately prior to the

As of June 30, 2022, there were 52,684.548 shares of Series C Preferred Stock issued and outstanding.

As of December 31,

2022, both the Initial Redemption and the Subsequent Redemption had occurred.

As a result, no shares of Series C Preferred Stock remain

As of December 31, 2024 and 2023, there are 100,000 shares of Series C Preferred Stock authorized for future issuances.

REDEEMABLE NON-CONTROLLING INTEREST

and Related Private Placement

connection with the Spin-Off, on May 5, 2022, Akos and the Company entered into into a Securities

Purchase Agreement (the “Akos Purchase Agreement”) with an accredited investor (the “Akos Investor”) ,

pursuant to which Akos agreed to sell up to an aggregate of 5,000 shares of Akos Series A Preferred Stock, at price of $ 1,000 per share,

and warrants (the “Akos Warrants”) to purchase shares of Akos’ common stock, par value $ 0.01 per share (the “Akos

Common Stock”), for an aggregate purchase price of up to $ 5,000,000 (the “ Akos

Private Placement ” ).

The Akos Purchase Agreement was guaranteed by the Company.

to the Akos Purchase Agreement, Akos 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.

The additional $ 4,000,000 was to be received on or immediately prior to the Spin-Off.

The issuance of the Akos Series

A Preferred Stock results in RNCI (see Note 2).

Palladium Capital Advisors, LLC (“Palladium”) acted as placement agent for

the Akos Private Placement.

Pursuant to the Akos Purchase Agreement, Akos had agreed to pay Palladium a fee equal to 9% of the aggregate

gross proceeds raised from the sale of the shares of the Akos Series A Preferred Stock and a non-accountable expense allowance of 1%

of the aggregate gross proceeds raised the sale of the Akos Series A Preferred Stock in the Akos Private Placement.

The fee due in connection

with the Akos Private Placement to be paid to Palladium in the form of convertible preferred stock and warrants was on similar terms

to the securities issued in the Akos Private Placement.

Palladium was also entitled to warrants to purchase Akos Common Stock in an amount

up to 8 % of the number of shares of Akos Common Stock underlying the shares issuable upon conversion of the Akos Series A Preferred Stock.

As of December 31, 2023, no accruals are required to be recorded for the fees or warrants since the Akos Series A Preferred Stock has

been redeemed.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

of Akos Series A Preferred Stock

the Certificate of the Designations, Preferences, and Rights of Series A Convertible Preferred Stock of Akos (the “Akos Series

A Preferred Certificate of Designations”), on or immediately prior to the completion of the spin-off of Akos into an independent,

separately traded public company listed on the Nasdaq Stock Market, the outstanding Akos Series A Preferred Stock automatically converted

into a number of shares of Akos Common Stock equal to 25 % of the then issued and outstanding Akos Common Stock, subject to the Beneficial

Ownership Limitation (as defined in the Akos Purchase Agreement).

Cumulative dividends on each share of Akos Series A Preferred Stock

accrue at the rate of 5 % annually.

Akos Series A Preferred Certificate of Designations provided that upon the earlier of (i) the one-year anniversary of May 5, 2022, and

only in the event that the Spin-Off has not occurred;

or (ii) such time that Akos and the Company have abandoned the Spin-Off or the

Company is no longer pursuing the Spin-Off in good faith, the holders of the Akos Series A Preferred Stock shall have the right (the

“Put Right”), but not the obligation, to cause Akos to purchase all or a portion of the Akos Series A Preferred Stock for

a purchase price equal to $ 1,000 per share, subject to certain adjustments as set forth in the Akos Series A Preferred Certificate of

Designations (the “Stated Value”), plus all the accrued but unpaid dividends per share.

In addition, after the one-year anniversary

of May 5, 2022, and only in the event that the Spin-Off has not occurred and Akos is not in material default of any of the transaction

documents, Akos may, at its option, at any time and from time to time, redeem the outstanding shares of Akos Series A Preferred Stock,

in whole or in part, for a purchase price equal to the aggregate Stated Value of the shares of Akos Series A Preferred Stock being redeemed

and the accrued and unpaid dividends on such shares.

Pursuant to the Akos Purchase Agreement, the Company has guaranteed the payment

of the purchase price for the shares purchased under the Put Right.

Akos Series A Preferred Certificate of Designations contains limitations that prevent the holder thereof from acquiring shares of Akos

Common Stock upon conversion of the Akos Series A Preferred Stock that would result in the number of shares of Akos Common Stock beneficially

owned by such holder and its affiliates exceeding 9.99% of the total number of shares of Akos Common Stock outstanding immediately after

giving effect to the conversion (the “Beneficial Ownership Limitation”), except that upon notice from the holder to Akos,

the holder may increase or decrease the limit of the amount of ownership of outstanding shares of Akos Common Stock after converting

the holder’s shares of Akos Series A Preferred Stock, provided that any change in the Beneficial Ownership Limitation shall not

be effective until 61 days following notice to Akos.

of Akos Series A Preferred Stock

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 $ 52,000 for a total of approximately $ 1,052,000 .

The Company had 20 days following the receipt

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

Upon redemption in May 2023, the Company revalued the

derivative liability and the Company recognized a change in fair value of the derivative liability on the Company’s consolidated

statement of operations during the second quarter of 2023 of $ 714,000 .

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

registration rights agreement in connection with the Akos Private Placement.

for Akos Series A Preferred Stock

the shares of Akos Series A Preferred Stock were redeemable at the option of the holder and the redemption is not solely in the control

of the Company, the shares of Akos Series A Preferred Stock were accounted for as a redeemable non-controlling interest and classified

within mezzanine equity in the Company’s consolidated balance sheets.

The redeemable non-controlling interest was initially measured

at fair value.

Dividends on the shares of Akos Series A Preferred Stock were recognized as preferred dividends attributable to redeemable

non-controlling interest in the Company’s consolidated statement of operations and comprehensive loss.

table below presents the reconciliation of changes in redeemable non-controlling interest:

SCHEDULE OF RECONCILIATION CHANGE IN REDEEMABLE NONCONTROLLING INTEREST

Balance at December 31, 2022

Preferred dividends attributable to redeemable non-controlling interest

Accretion of embedded derivative and transaction costs associated with Akos Series A Preferred Stock to redemption value

Redemption of Akos Series A Preferred Stock

( 1,052,057 )

Balance at December 31, 2023

May 2023, the Akos Series A Preferred Stock was redeemed for a total of $ 1,052,057 , and the balance of the redeemable non-controlling

interest is $ 0 as of December 31, 2023.

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

LICENSING AGREEMENTS

July 10, 2024, Akos entered into an Exclusive License Agreement (the “License Agreement”) with Aries Science and Technology,

LLC, an Ohio limited liability company (“Aries”), pursuant to which Akos granted Aries a license of Akos’s patented

radiation dermatitis topical product.

The license allows Akos to use the patented formulation to develop pharmaceutical or non-pharmaceutical

products for treating radiation dermatitis suitable for administration to humans or animals.

The license is exclusive (subject to certain

exceptions contained in the License Agreement), worldwide, royalty-bearing, and includes the right to sublicense.

Akos is entitled to

potential license payments, milestone payments and royalties based on net revenues of the Licensed Product on a licensed product-by-licensed

product and country-by-country basis pursuant to the terms of the Agreement.

Aries has the option during the license term, to purchase

the rights to each licensed product (on a licensed product-by-licensed product basis) in the form of an exclusive (as to the applicable

licensed product), fully paid, transferable right and license to the licensed product.

Company has not earned any revenue related to this agreement as of December 31, 2024.

November 7, 2024, the Company entered into an Out-Licensing Agreement (the “Agreement”) with MycoMedica Life Sciences, PBC,

a Delaware public benefit corporation (“MycoMedica”), pursuant to which the Company will out-license EB-002 and its EVM201

series to MycoMedica for further development and sales of the product in treatment of neuropsychiatric disorders.

MycoMedica will receive

an exclusive, global license to the formulations, drugs, method of use, and medical devices developed by Enveric to utilize the compound.

As part of the Agreement, the Company will receive a $ 20,000 upfront payment, and if certain conditions are met, will receive development

and sales milestone payments of up to $ 62 million and tiered single-digit royalties based on future sales.

MycoMedica has the option

during the license term to buyout its milestone and royalty payment obligations at a predetermined amount depending upon the stage of

product development and commercialization at the time of the buyout.

Further, MycoMedica has the right to purchase the licensed patents

at a nominal amount upon a change of control of the Company, although doing so does not relieve MycoMedica of any of its payment obligations.

During the year ended December 31, 2024, the Company received $ 20,000 from MycoMedica as a licensing fee, which is recorded as other

income in the consolidated statements of operations.

following table provides the financial liabilities measured on a recurring basis and reported at fair value on the balance sheet as of

December 31, 2024 and 2023, and indicates the fair value of the valuation inputs the Company utilized to determine such fair value of

warrant liabilities and investment options:

OF FAIR VALUE HIERARCHY OF VALUATION INPUTS ON RECURRING BASIS

December 31, 2024

December 31, 2023

Warrant liabilities - January 2021 Warrants

Warrant liabilities - February 2021 Warrants

Warrant liabilities - February 2022 Warrants

Fair value of warrant liability

December 31, 2024

December 31, 2023

Wainwright investment options

Fair value of investment option liability

warrant liabilities 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 within other income

(expense) on the consolidated statements of operations and comprehensive loss

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

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

Total Warrant Liabilities

Fair value as of December 31, 2022

Exercise of warrants

Change in fair value

Fair value as of December 31, 2023

Change in fair value

Fair value as of December 31, 2024

Total Derivative Liability

Fair value as of December 31, 2022

Change in fair value arising from redemption of Akos Series A Preferred Stock - See Note 9

Redemption of Series A Preferred Stock

Fair value as of December 31, 2023

was no activity related to the derivative liability during the year ended December 31, 2024.

Total Investment Options

Fair value as of December 31, 2022

Change in fair value

Exercise of investment options

Fair value of investment option liability as of December 31, 2023

Change in fair value

Fair value of investment option liability as of December 31, 2024

key inputs into the Black Scholes valuation model for the Level 3 valuations of the warrant liabilities as of December 31, 2024 are below:

OF BLACK SCHOLES VALUATION MODELS OF WARRANT LIABILITIES AND INVESTMENT OPTIONS

January 2021 Warrants

February 2021 Warrants

February 2022 Warrants

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of warrants

Value (per share)

BIOSCIENCES, INC.

Series C Preferred Shares

On May 3, 2022, the Board

declared a dividend of one one-thousandth of a share of the Company’s Series C Preferred Stock (“Series C Preferred Stock”)

for each outstanding share of the Company’s common stock held of record as of 5:00 p.m.

Eastern Time on May 13, 2022 (the “Record

This dividend was based on the number of outstanding shares of common stock prior to the Reverse Stock Split.

The outstanding

shares of Series C Preferred Stock were entitled to vote together with the outstanding shares of the Company’s common stock, as

a single class, exclusively with respect to a proposal giving the Board the authority, as it determines appropriate, to implement a reverse

stock split within twelve months following the approval of such proposal by the Company’s stockholders (the “Reverse Stock

Split Proposal”), as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Reverse

Stock Split Proposal (the “Adjournment Proposal”).

The Company held a special

meeting of stockholders on July 14, 2022 (the “Special Meeting”) for the purpose of voting on, among other proposals, a Reverse

Stock Split Proposal and an Adjournment Proposal.

All shares of Series C Preferred Stock that were not present in person or by proxy at

the Special Meeting were automatically redeemed by the Company immediately prior to the opening of the polls at Special Meeting (the “Initial

Redemption”).

All shares that were not redeemed pursuant to the Initial Redemption were redeemed automatically upon the approval

by the Company’s stockholders of the Reverse Stock Split Proposal at the Special Meeting (the “Subsequent Redemption”

and, together with the Initial Redemption, the “Redemption”).

Each share of Series C Preferred Stock was entitled to receive

$ 0.10 in cash for each 10 whole shares of Series C Preferred Stock immediately prior to the Redemption.

As of June 30, 2022, there were

52,684.548 shares of Series C Preferred Stock issued and outstanding.

As of December 31, 2022, both the Initial Redemption and the Subsequent

Redemption had occurred.

As a result, no shares of Series C Preferred Stock remain outstanding.

As of December 31, 2025 and 2024, there

are 100,000 shares of Series C Preferred Stock authorized for future issuances.

ENVERIC 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, 2023 are below:

January 2021 Warrants

February 2021 Warrants

February 2022 Warrants Unmodified

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of warrants

Value (per share)

key inputs into the Black Scholes valuation model for the Level 3 valuations of the investment options as of December 31, 2024 are below:

Wainwright & Co., LLC Options

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of investment options

Value (per share)

key inputs into the Black Scholes valuation model for the Level 3 valuations of the investment options as of December 31, 2023 are below:

Wainwright & Co., LLC Options

Exercise price

Dividend yield

Expected volatility

Risk free interest rate

Number of investment options

Value (per share)

BIOSCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL

On July 10, 2024, Akos entered

into an Exclusive License Agreement (the “License Agreement”) with Aries Science and Technology, LLC, an Ohio limited liability

company (“Aries”), pursuant to which Akos granted Aries a license of Akos’s patented radiation dermatitis topical product.

The license allows Akos to use the patented formulation to develop pharmaceutical or non-pharmaceutical products for treating radiation

dermatitis suitable for administration to humans or animals.

The license is exclusive (subject to certain exceptions contained in the

License Agreement), worldwide, royalty-bearing, and includes the right to sublicense.

Akos is entitled to potential license payments,

milestone payments and royalties based on net revenues of the Licensed Product on a licensed product-by-licensed product and country-by-country

basis pursuant to the terms of the Agreement.

Aries has the option during the license term, to purchase the rights to each licensed product

(on a licensed product-by-licensed product basis) in the form of an exclusive (as to the applicable licensed product), fully paid, transferable

right and license to the licensed product.

The Company has not earned

any revenue related to this agreement as of December 31, 2025 and 2024.

On November 7, 2024, the Company

entered into an Out-Licensing Agreement (the “Agreement”) with MycoMedica Life Sciences, PBC, a Delaware public benefit corporation

(“MycoMedica”), pursuant to which the Company will out-license EB-002 and its EVM201 series to MycoMedica for further development

and sales of the product in treatment of neuropsychiatric disorders.

MycoMedica will receive an exclusive, global license to the formulations,

drugs, method of use, and medical devices developed by Enveric to utilize the compound.

As part of the Agreement, the Company received

a $ 20,000 upfront payment in the fourth quarter of 2024, and if certain conditions are met, will receive development and sales milestone

payments of up to $ 62 million and tiered single-digit royalties based on future sales.

MycoMedica has the option during the license term

to buyout its milestone and royalty payment obligations at a predetermined amount depending upon the stage of product development and

commercialization at the time of the buyout.

Further, MycoMedica has the right to purchase the licensed patents at a nominal amount upon

a change of control of the Company, although doing so does not relieve MycoMedica of any of its payment obligations.

The Company has not earned

any revenue related to this agreement as of December 31, 2025.

During the year ended December 31, 2024, the Company received $ 20,000

from MycoMedica as a licensing fee, which is recorded as other income in the consolidated statements of operations.

On February 3, 2025, Akos

entered into two licensing agreements with Restoration Biologics LLC (“Restoration Biologics”), a biotechnology company focused

on the treatment of joint disease.

The companies have executed two licenses for Akos’ cannabinoid-COX-2 conjugate compounds, for

pharmaceutical and potential non-pharmaceutical applications.

The Company has not earned

any revenue related to this agreement as of December 31, 2025.

AND CONTINGENCIES

The Company is periodically

involved in legal proceedings, legal actions and claims arising in the normal course of business.

Management believes that the outcome

of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position,

results of operations or cash flows.

Australian Subsidiary Research and Development

On March 23, 2023, the Company

issued a press release announcing the selection of Australian CRO, Avance Clinical, in preparation for Phase 1 Study of EB-373, the Company’s

lead candidate targeting the treatment of anxiety disorders.

Under the agreement, Avance Clinical managed the Phase 1 clinical trial of

EB-373 in coordination with the Company’s newly established Australian subsidiary, Enveric Therapeutics Pty, Ltd.

The Phase 1 clinical

trial was designed as a multi-cohort, dose-ascending study to measure the safety and tolerability of EB-373.

EB-373, a next-generation

proprietary psilocin prodrug, has been recognized as a New Chemical Entity (NCE) by Australia’s Therapeutic Goods Administration

(TGA) and is currently in preclinical development targeting the treatment of anxiety disorder.

The total cost of the Avance Clinical contract

was approximately 3,400,000 AUD, which translated to approximately $ 2,114,000 USD as of December 31, 2024.

As of December 31, 2024, the

project was completed and the Company terminated the agreement as of December 31, 2024.

Total project costs were 3,300,000 AUD and the

Company did not incur additional costs associated with the agreement.

Accordingly, the Company had $ 0 recorded as prepaid assets within

prepaid and other current assets, accrued $ 0 recorded as accrued liabilities and $ 0 as accounts payable on the accompanying consolidated

balance sheet.

For the years ended December 31, 2025 and 2024, the Company expensed $ 0 and $ 495,465 , respectively, in research and development

expenses within the accompanying consolidated statement of operations.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business.

believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s

financial position, results of operations or cash flows.

Subsidiary Research and Development

March 23, 2023, the Company issued a press release announcing the selection of Australian CRO, Avance Clinical, in preparation for Phase

1 Study of EB-373, the Company’s lead candidate targeting the treatment of anxiety disorders.

Under the agreement, Avance Clinical

will manage the Phase 1 clinical trial of EB-373 in coordination with the Company’s newly established Australian subsidiary, Enveric

Therapeutics Pty, Ltd.

The Phase 1 clinical trial is designed as a multi-cohort, dose-ascending study to measure the safety and tolerability

EB-373, a next-generation proprietary psilocin prodrug, has been recognized as a New Chemical Entity (NCE) by Australia’s

Therapeutic Goods Administration (TGA) and is currently in preclinical development targeting the treatment of anxiety disorder.

cost of the Avance Clinical contract is approximately 3,400,000 AUD, which translates to approximately $ 2,114,000 USD as of December

The Company has terminated the agreement as of December 31, 2024.

Total project costs were 3,300,000 AUD and the Company will

not incur any future costs associated with the agreement.

Accordingly, the Company has $ 0 recorded as prepaid assets within prepaid and

other current assets, accrued $ 0 recorded as accrued liabilities and $ 0 as accounts payable on the accompanying consolidated balance

For the years ended December 31, 2024 and 2023, the Company has expensed $ 495,465 and $ 1,751,444 , respectively, in research and

development expenses within the accompanying consolidated statement of operations.

As of December 31, 2024, the project is completed.

to Australian tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in Australia for expenses

incurred in R&D subject to certain requirements.

The Company’s Australian subsidiary submits R&D tax credit requests annually

for research and development expenses incurred.

At December 31, 2024 and 2023, the Company had a research and development tax credit

receivable of $ 0 and $ 145,349 , respectively, for R&D expenses incurred in Australia, included in prepaid and other current assets

within the accompanying consolidated statement of operations.

The Company received the amount due in relation to the research and development

tax credit of $ 290,447 during the year ended December 31, 2024.

agreement with Prof.

Zvi Vogel and Dr.

December 26, 2017, Jay Pharma entered into a purchase agreement with Prof.

NOTES TO CONSOLIDATED FINANCIAL

According to Australian tax

law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in Australia for expenses incurred in R&D

subject to certain requirements.

The Company’s Australian subsidiary submits R&D tax credit requests annually for research and

development expenses incurred.

At December 31, 2025 and 2024, the Company had a research and development tax credit receivable of $ 0 for

R&D expenses incurred in Australia.

The Company received the amount due in relation to the research and development tax credit of

$ 290,447 during the year ended December 31, 2024.

Purchase agreement with Prof.

On December 26, 2017, Jay

Pharma entered into a purchase agreement with Prof.

Zvi Vogel and Dr.

Ilana Nathan (the “Vogel-Nathan Purchase

Agreement”), pursuant to which Jay Pharma was assigned ownership rights to certain patents, which were filed and unissued as of

the date of the Vogel-Nathan Purchase Agreement.

The patent portfolio acquired and developed under the Vogel-Nathan Purchase Agreement

was sold to undisclosed buyers for an amount not material to these financials in the first quarter of 2024.

No additional financial or

other obligations exist regarding the Vogel-Nathan Purchase Agreement.

Consulting and Vendor Agreements

Company has entered into a number of agreements and work orders for future consulting, clinical trial support, and testing services,

with terms ranging between one and 12 months.

These agreements, in aggregate, commit the Company to approximately $ 0.3 million in future

cash payments.

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 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 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.

Kanubaddi received salary

and benefits that is paid out in twelve monthly installments beginning in July 2023, was eligible for his 2023 performance bonus, which

was not achieved, and any outstanding restricted stock units retained their vesting conditions.

following table summarizes the Reduction in Force/Restructuring activity and ending balance at December 31, 2024 and 2023 for the remaining

severance payments included in accrued expenses in the consolidated balance sheet:

SCHEDULE OF REDUCTION IN FORCE/RESTRUCTURING ACTIVITY

Accrued Restructuring Costs

January 1, 2023 Beginning balance

Restructuring costs incurred

Restructuring costs paid

Restructuring costs reversed

December 31, 2023 ending balance

Restructuring costs paid

December 31, 2024 ending balance

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Company’s U.S.

and foreign loss before income taxes are set forth below:

Ilana Nathan (the “Vogel-Nathan Purchase Agreement”),

pursuant to which Jay Pharma was assigned ownership rights to certain patents, which were filed and unissued as of the date of the Vogel-Nathan

Purchase Agreement.

The patent portfolio acquired and developed under the Vogel-Nathan Purchase Agreement was sold to undisclosed buyers

for an amount not material to these financials in the first quarter of 2024.

No additional financial or other obligations exist regarding

the Vogel-Nathan Purchase Agreement.

Other Consulting and Vendor Agreements

The Company has entered into

a number of agreements and work orders for future consulting, clinical trial support, and testing services, with terms ranging between

one and 12 months.

These agreements, in aggregate, commit the Company to approximately $ 0.4 million in future cash payments.

The Company’s U.S.

loss before income taxes are set forth below:

SCHEDULE OF EARNING (LOSS) BEFORE INCOME

6 unchanged sentences

$ ( 9,566,057 )

the years ended December 31, 2024 and 2023, the Company recorded income tax expense of $ 8,930 and $ 28,913 , respectively.

The income tax

expense is as follows:

For the years ended December 31,

2025 and 2024, the Company recorded income tax expense of $ — and $ 8,930 , respectively.

The income tax expense is as follows:

OF INCOME TAX EXPENSE BENEFITS

2 unchanged sentences

Total income tax expense

Company’s deferred tax assets and deferred tax liabilities consist of the following:

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

The Company elected to prospectively

adopt the guidance in ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The following table

reconciles the U.S.

federal statutory income tax rate of 21 % to the Company’s effective income tax rate for the year ended December

31, 2025 in accordance with the guidance in ASU 2023-09:

OF EFFECTIVE STATUTORY INCOME TAX RATE

Income before provision for income taxes

$ ( 8,771,987 )

Federal Statutory Tax Rate at 21 %

( 1,842,117 )

Foreign tax rate differential

Non-deductible expenses

Deferred true-up

State and Local Income Taxes, Net of Federal Income Tax Effect *

State Changes in Valuation Allowances *

State Prior Year True Up *

State Change in Tax Rate *

State Taxes - Deferred, net of FBOS *

Foreign Tax Effects

Prior Year True Up

Changes in Valuation Allowances

Non-taxable or Non-deductible Items

Total Income Tax Provision

(*) State taxes in Florida and Massachusetts comprise the majority (greater

than 50%) of the tax effect in this category.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL

The reconciliation of the

statutory rate of 21 % to the Company’s effective tax rate for the year ended December 31, 2024 in accordance with the guidance

prior to the adoption of ASU 2023-09 is summarized as follows:

Federal income tax at the statutory rate

State income tax rate (net of federal)

Foreign tax rate differential

Non-deductible expenses

Deferred true-up

Change in valuation allowance

Effective income tax rate

The Company’s deferred tax

assets and deferred tax liabilities consist of the following:

OF DEFERRED TAX ASSETS AND LIABILITIES

8 unchanged sentences

Net deferred tax assets

Company had the following potentially utilizable net operating loss tax carryforwards:

The Company had the following

potentially utilizable net operating loss tax carryforwards:

OF OPERATING LOSS CARRY FORWARDS

Net operating loss tax carryforwards

BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

Tax Cuts and Jobs Act of 2017 (the “Act”) limits the net operating loss deduction to 80% of taxable income for losses arising

in tax years beginning after December 31, 2017.

As of December 31, 2024, the Company had federal net operating loss carryforwards of $ 30,086,333 which can be carried forward indefinitely, state net operating losses carryforwards

of $ 14,467,439 , of which $ 6,407,050 can be carried forward indefinitely and remainder can be carried 20 years and Canadian net operating

loss carryforwards of $ 17,543,639 , of which $ 16,215,951 will begin to expire in 2040 and the remainder is carried forward indefinitely.

Company’s effective tax rate varied from the statutory rate as follows:

OF EFFECTIVE STATUTORY INCOME TAX RATE

Federal income tax at the statutory rate

State income tax rate (net of federal)

Foreign tax rate differential

Non-deductible expenses

Deferred true-up

Change in valuation allowance

Effective income tax rate

assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all

of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of

future taxable income during the periods in which those temporary differences become deductible.

The valuation allowance increased by

$ 817,820 and $ 1,859,862 during the years ended December 31, 2024 and 2023, respectively.

Company files U.S.

federal and state returns.

The Tax Cuts and Jobs Act

of 2017 (the “TCJA”) limits the net operating loss deduction to 80% of taxable income for losses arising in tax years beginning

after December 31, 2017.

As of December 31, 2025, the Company had federal net operating loss carryforwards of $ 37,815,890 which can

be carried forward indefinitely, state net operating losses carryforwards of $ 16,861,207 , of which $ 10,405,652 can be carried forward

indefinitely and remainder can be carried 20 years and Canadian net operating loss carryforwards of $ 19,671,743 , of which $ 18,346,574

will begin to expire in 2040 and the remainder is carried forward indefinitely.

In assessing the realizability

of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will

not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the

periods in which those temporary differences become deductible.

The valuation allowance increased by $ 2,094,949 and $ 817,820 during the

years ended December 31, 2025 and 2024, respectively.

The Company files U.S.

and state returns.

The Company’s foreign subsidiary also files a local tax return in their local jurisdiction.

federal, state and Canadian perspective the years that remain open to examination are consistent with each jurisdiction’s

statute of limitations.

utilization of the Company’s net operating losses may be subject to a substantial limitation in the event of any significant future

changes in its ownership structure under Section 382 of the Internal Revenue Code and similar state provisions.

Such limitation may result

in the expiration of the net operating loss carryforwards before their utilization.

We have not conducted any studies to determine annual

limitations, if any, that could result from such changes in ownership.

in 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the option to deduct research and development expenditures

in the current year and requires taxpayers to amortize US expenses over five years and foreign expense over fifteen years pursuant to

IRC Section 174.

During the years ended December 31, 2024 and 2023, the Company has estimated and capitalized gross $ 202,147 and $ 463,696 ,

respectively, of research and development expenditures that will be amortized primarily over five years.

This did not have a material

impact on the Company’s tax liability for the years ended December 31, 2024 and 2023.

The Company will continue to evaluate the

impact of these tax law changes on the current and future periods.

SUBSEQUENT EVENTS

January 30, 2025, the Company commenced a best efforts public offering (the “Offering”) of an aggregate of (i) 1,229,330

shares (the “Shares”) of Common Stock of the Company, (ii) 437,336 pre-funded warrants (the “Pre-Funded Warrants”)

to purchase 437,336 shares of Common Stock (the “Pre-Funded Warrant Shares”), (iii) 1,666,666 Series A warrants (the “Series

A Warrants”) to purchase 1,666,666 shares of Common Stock (the “Series A Warrant Shares”), and (iv) 1,666,666 Series

B warrants (the “Series B Warrants,” and together with the Series A Warrants, the “Warrants”) to purchase 1,666,666

shares of Common Stock (the “Series B Warrant Shares”).

Each Share or Pre-Funded Warrant was sold together with one Series

A Warrant to purchase one share of Common Stock and one Series B Warrant to purchase one share of Common Stock.

The offering price for

each Share and accompanying Warrants was $ 3.00 , and the offering price for each Pre-Funded Warrant and accompanying Warrants was $ 2.9999 .

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable immediately and will expire when exercised in full.

Each Warrant has an exercise price of $ 3.00 per share and will be exercisable immediately upon issuance (“Initial Exercise Date”).

The Series A Warrants expire on the five-year anniversary of the Initial Exercise Date.

The Series B Warrants expire on the 18-month

anniversary of the Initial Exercise Date.

Offering closed on February 3, 2025.

The net proceeds of the Offering, after deducting the fees and expenses of the Placement Agent (as

defined below), described in more detail below, and other offering expenses payable by the Company, but excluding the net proceeds, if

any, from the exercise of the Warrants, is approximately $ 4.2 million.

The Company intends to use the net proceeds from the Offering

for working capital, EB-003 development, and general corporate purposes.

BIOSCIENCES, INC.

state and Canadian perspective the years that remain open to examination are consistent with each jurisdiction’s statute of limitations.

ENVERIC BIOSCIENCES, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

connection with the Offering, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a

certain institutional investor.

Pursuant to the Purchase Agreement, the Company agreed not to issue, enter into any agreement to issue

or announce the issuance or proposed issuance of any shares of Common Stock or any securities convertible into or exercisable or exchangeable

for shares of Common Stock or file any registration statement or prospectus, or any amendment or supplement thereto for 60 days after

the closing date of the Offering, subject to certain exceptions.

In addition, the Company has agreed not to effect or enter into an agreement

to effect any issuance of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock involving

a variable rate transaction (as defined in the Purchase Agreement) until the one-year anniversary of the closing date of the Offering,

subject to an exception.

holder will not have the right to exercise any portion of the Warrants or Pre-Funded Warrants if the holder (together with its affiliates)

would beneficially own in excess of 4.99% or 9.99%, as applicable, of the number of shares of Common Stock outstanding immediately after

giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants or the Pre-Funded

Warrants, respectively.

to an engagement agreement, as amended, (the “Engagement Agreement”) with H.C.

Wainwright & Co., LLC (the “Placement

Agent”), the Company agreed to pay the Placement Agent in connection with the Offering (i) a cash fee equal to 7.0% of the aggregate

gross proceeds received in the Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds received in the Offering,

(iii) a non-accountable expense allowance of $ 25,000 , (iv) reimbursement of up to $ 100,000 for legal fees and expenses and other out

of pocket expenses and (v) up to $ 15,950 for the clearing expenses.

pursuant to the Engagement Agreement, the Company, in connection with the Offering, agreed to issue to the Placement Agent or its designees

warrants (the “Placement Agent Warrants”) to purchase up to an aggregate of 116,666 shares of Common Stock (the “Placement

Agent Warrant Shares”) (which represents 7.0 % of the Shares and Pre-Funded Warrants sold in the Offering).

The Placement Agent

Warrants have an exercise price of $ 3.75 per share (which represents 125 % of the public offering price per Share and accompanying Warrants),

expire on January 30, 2030, and are exercisable following the Initial Exercise Date.

February 2025, a total of 437,336 shares of Common Stock have been issued due to exercises of the Pre-Funded Warrants and 25,000 shares

of Common Stock have been issued due to exercises of Series B Warrants.

February 3, 2025, Akos entered into two licensing agreements with Restoration Biologics LLC (“Restoration Biologics”), a

biotechnology company focused on the treatment of joint disease.

The companies have executed two licenses for Akos’ cannabinoid-COX-2

conjugate compounds, for pharmaceutical and potential non-pharmaceutical applications.

NOTES TO CONSOLIDATED FINANCIAL

The utilization of the Company’s

net operating losses may be subject to a substantial limitation in the event of any significant future changes in its ownership structure

under Section 382 of the Internal Revenue Code and similar state provisions.

Such limitation may result in the expiration of the net operating

loss carryforwards before their utilization.

The Company has not conducted any studies to determine annual limitations, if any, that could

result from such changes in ownership.

Beginning in 2022, the TCJA

eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to amortize US expenses

over five years and foreign expense over fifteen years pursuant to IRC Section 174.

During the years ended December 31, 2025 and 2024,

the Company has estimated and capitalized gross $ 49,422 and $ 202,147 , respectively, of research and development expenditures.

not have a material impact on the Company’s tax liability for the years ended December 31, 2025 and 2024.

The Company will continue to

evaluate the impact of these tax law changes on the current and future periods.

On July 4, 2025, the One Big

Beautiful Bill Act (“OBBBA”) was enacted, amending U.S.

tax law in several areas, including domestic research and development

deductibility and bonus depreciation.

The Company has included the estimated effect of provisions relevant to the current fiscal year

in its reported income tax expense as of December 31, 2025.

As a result of the OBBBA in the current period, the federal net operating

loss was further increased driven by the deductibility of pre-2025 R&D expenses.

There was little to no impact on the effective

Management is continuing to evaluate the OBBBA’s potential impact on future periods, particularly with respect to

deferred tax assets and liabilities, the effective tax rate, and cash tax obligations.

SUBSEQUENT EVENTS

On January 27, 2026, the Company,

entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors (each, an “Investor”),

pursuant to which the Company agreed to issue and sell to the Investors in a registered direct offering, an aggregate of 328,802 shares

of Common Stock, at a price of $ 4.41 per share (the “Registered Direct Offering”) for gross proceeds of approximately $ 1.5

million before the deduction of placement agent fees and offering expenses.

The closing of the Registered Direct Offering occurred on

January 28, 2026.

In a concurrent private placement

(the “Private Placement” and, together with the Registered Direct Offering, the “Offerings”), pursuant to the

terms of the Purchase Agreement, the Company also agreed to issue and sell unregistered Series G warrants to purchase up to 328,802 shares

of Common Stock (the “Series G Warrants”), and unregistered Series H warrants to purchase up to 328,802 shares of Common Stock

(the “Series H Warrants”, and collectively with the Series G Warrants, the “Common Warrants”).

The Common Warrants

have an exercise price of $ 4.16 per share (subject to customary adjustments as set forth in the Common Warrants) and are exercisable immediately.

The Series G Warrants will expire five years following the effective date of the Resale Registration Statement (defined below), and the

Series H Warrants will expire 18 months following the effective date of the Resale Registration Statement.

The Common Warrants contain

customary anti-dilution adjustments to the exercise price, including for share splits, share dividends, rights offering and pro rata distributions.

The Company has agreed to file a registration statement providing for the resale of the shares issuable upon the exercise of the Common

Warrants and warrants issued to its placement agent within thirty calendar days after the closing date (the “Resale Registration

The Company filed the Resale Registration Statement on February 10, 2026, which was declared effective by the SEC on

February 17, 2026.

On February 6, 2026, the Company

filed a prospectus supplement to increase the ATM Agreement’s capacity by an additional $ 1,346,000 under the Company’s existing

shelf registration statement.

Under this agreement, the Company issued 497,200 shares on February 19, 2026 for net cash proceeds of $ 1.3

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures