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Enveric Biosciences (NASDAQ: ENVB) reported financial results for the fourth quarter of 2023 and the fiscal year ending December 31, 2023. The company has no revenue to report as of yet. Enveric did deliver a net loss of $3.44 million for the quarter, including $1.48 million in net non-cash expenses.

This translated to a basic and diluted loss per share of $1.46, as compared to a net loss of $8.80 million, including $4.48 million in net non-cash expense, with a basic and diluted loss per share of $4.89 for the quarter ending December 31, 2022.

“The fourth quarter of 2023 and early 2024 was a significant period for Enveric, highlighted by the selection of EB-003 as our lead development candidate. We believe EB-003 is a groundbreaking, neuroplastogen drug candidate that offers the potential to treat severe mental health disorders without the hallucinogenic effect typically associated with psychedelic-based molecules,” said Joseph Tucker, Ph.D., Director and CEO of Enveric. “Based on numerous discussions with large pharmaceutical companies, mental health professionals, and leading researchers, we believe it is evident that widespread market acceptance of psychedelic-inspired drugs will ultimately be determined by the ability to administer such medications in an outpatient setting. We believe minimizing the hallucinatory effect will be key to seizing this opportunity and was critical in our decision to select EB-003 as our lead product candidate of the EVM301 series. We now look forward to advancing preclinical activities in early 2024 in support of filing an IND for EB-003 as we seek to introduce a new treatment paradigm for depression and anxiety disorders.”

Running low on funds

It’s a race against time for Enveric, as the company noted in its annual report that it is running low on cash. At the end of 2023, the company had cash of $2,287,977 and working capital of $1,238,027. The company said this won’t last the next 12 months.

The company reported it has incurred a loss since inception resulting in an accumulated deficit of $96,499,518 as of December 31, 2023. The company said it expects more losses.

Enveric had operating cash outflows of $14,094,411  and a loss from operations of $16,448,440 for 2023. The company’s operations have been funded principally through the issuance of debt and equity. The annual report read, “These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of these financial statements.”

Management said it plans to reduce the company’s rate of spend, manage its cash flow, advance its programs, and raise additional working capital through public or private equity or debt financings or other sources, which includes the Equity Distribution Agreement with Canaccord for proceeds of up to $2.4 million, the Purchase Agreement with Lincoln Park, and the Inducement Letters and resulting sales of common stock under the Existing Warrants for net cash proceeds of $1.5 million received in January 2024, and the exercise of warrants to purchase 1,954,000 shares of common stock for gross cash proceeds of approximately $2.7 million in February 2024, and may include collaborations with additional third parties as well as disciplined cash spending, to increase the company’s cash runway.

On December 28, 2023, Enveric completed a warrant inducement transaction with two investors in which existing warrants were repriced and exercised, and new warrants were issued to the investors. The cash proceeds from that transaction were received on January 4, 2024. Subsequently, on February 29, 2024, approximately 90% of the new warrants were also exercised. The gross proceeds to the company from the two warrant exercises totaled approximately $4.5 million.

Looking ahead

Enveric has its hopes pinned on some new deals. It signed three non-binding term sheets with an undisclosed biotechnology company to pursue the out-licensing of three classes of compounds; future development and sales milestone payments and execution fees for the three licenses could total up to $200 million. It also signed two non-binding term sheets with a second undisclosed biotechnology company to pursue the out-licensing of cannabinoid conjugate compounds for pharmaceutical and non-pharmaceutical applications for the treatment of joint diseases; future development and sales milestone payments and execution fees for the two licenses could total up to $61 million.

Dr. Tucker concluded, “During the fourth quarter, we also continued to progress IND-enabling preclinical work for EB-002, completing important repeat-dose toxicology studies, genotoxicity studies, as well as cardiac, respiratory markers, and CNS safety pharmacology studies. We expect to finalize all preclinical activities for EB-002 soon, making the asset Phase 1 ready in 2024.”

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Debra Borchardt, KahliBuds, 420GrowLife