Enveric Biosciences (ENVB) risk factors, FY2025 10-K

Other

1. 01Business and Financial ConditionNew

Risks Related to Our Business and Financial Condition

1. 02Our management and independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern as of December 31, 2025. We will be unable to continue to operate for the foreseeable future without additional capital
2. 03We are dependent on the success of our prospective product candidates, which are in early stages of development, and there can be no assurances that any such prospects will reach a particular stage in development, receive regulatory approval or be successfully commercialized
3. 04We may encounter difficulties that may delay, suspend or scale back our efforts to advance additional early research programs through preclinical development and IND application filings and into clinical development
4. 05Catastrophic events could have a material adverse effect on our business, including current plans for product development, as well as any currently ongoing preclinical studies and clinical trials and any future studies or other development or commercialization activities
5. 06In the event Artificial Intelligence (“AI”) is used to better effect by our competitors it could lead to countervailing discoveries that may undermine our current pipeline. The use of AI could also lead to potential security risks and breachesNew
6. 07We have significant and increasing liquidity needs and may require additional funding29% rewritten
7. 08We depend on our current key personnel53% rewritten
8. 09Our limited resources have lead us to focus on a particular product candidate. As a result, we may fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of medical and commercial success43% rewritten
9. 10We expect to face intense competition, often from companies with greater resources and experience than us25% rewritten
10. 11Our current and future preclinical and clinical studies may be conducted outside the United States, and the FDA may not accept data from such studies to support any NDAs we may submit after completing the applicable developmental and regulatory prerequisites
11. 12Because the results of preclinical studies and earlier clinical trials are not necessarily predictive of future results, we may not have favorable results in our planned and future clinical trials
12. 13Regulatory approval is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated, and we may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved or “off-label” uses
13. 14Business interruptions could delay us in the process of developing our product candidates
14. 15Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and legal requirements
15. 16Our proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches
16. 17Failure of our information technology systems, including cybersecurity attacks or other data security incidents, could significantly disrupt the operation of our business
17. 18Security breaches, loss of data and other disruptions could compromise sensitive information related to our business, prevent it from accessing critical information or expose it to liability, which could adversely affect our business and its reputation
18. 19Our operating results may vary significantly in future periods
19. 20Significant ongoing costs and obligations
20. 21We may rely on third parties to plan and conduct preclinical studies and clinical trials
21. 22Our reliance on third-party contract manufacturers26% rewritten
22. 23Termination or non-renewal of key licenses and agreements45% rewritten
23. 24Negative results from clinical trials or studies of others and adverse safety events involving our drug candidates
24. 25Clinical trials of our drug candidates may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or not otherwise produce positive results
25. 26Use of raw materials requires regulatory approval
26. 27Possible increase in costs beyond what is currently expected as a result of regulatory review
27. 28We have never been profitable, have no products approved for commercial sale, and to date have not generated any revenue
28. 29We have no licensing, marketing or distribution experience and will have to invest significant resources to develop those capabilities or enter into acceptable third-party sales and marketing transactions
29. 30We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights
30. 31Changes in patent law and its interpretation could diminish the value of patents in general, thereby impairing our ability to protect our drug candidates
31. 32Insurance and uninsured risks
32. 33The psychedelic- inspired medicines industry and market are relatively new in this industry and the market may not continue to exist or grow as anticipated
33. 34The psychedelics-inspired medicines industry and market are relatively new, and the industry may not succeed in the long term
34. 35Our psychedelic-inspired drug candidates may generate public controversy. Adverse publicity or public perception regarding the psychedelic-inspired APIs we intend to utilize may negatively influence our success and that of our prospective investigational therapies
35. 36The expansion of the use of psychedelic-inspired medicines in the medical industry may require new clinical research into effective medical therapies
36. 37The psychedelic-inspired medicine industry is difficult to quantify and investors will be reliant on their own estimates of the accuracy of market data
37. 38The psychedelic-inspired medicine and biotechnology industries are experiencing rapid growth and increased competition
38. 39Changes in legislation, regulations and guidelines

Risks Related to Regulatory Matters

1. 40Our current and prospective product candidates, and the development thereof, are or will be subject to the various federal and state laws and regulations relating to the safety and efficacy of health products, such as prescription drugs
2. 41We are in the process of developing investigational new drugs for which we intend to pursue FDA approval via the NDA process. In these product candidates and synthetic molecules based on psychedelics, such as psilocybin, mescaline and MDMA, will be the APIs
3. 42FDA approval is also a prerequisite to commercialization, and the controlled-substance status, currently undetermined, of our psychedelic-inspired APIs may negatively impact the FDA’s decision regarding whether to approve the applicable product candidates
4. 43Our prospective products will be subject to the various federal and state laws and regulations relating to health and safety39% rewritten
5. 44Clinical trials are expensive, time-consuming, uncertain and susceptible to change, delay or termination. The results of clinical trials are open to differing interpretations
6. 45Certain third-parties we rely on to conduct our operations are subject to regulatory requirements
7. 46Difficulty or delays in enrolling patients in clinical trials may result in delay or prevention of necessary regulatory approvals50% rewritten
8. 47Any failure by us to comply with existing regulations could harm our reputation and operating results
9. 48We may be subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect our business and results of operations
10. 49We may face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products. In addition, the importation of foreign products may compete with any future product that we may market, which could negatively impact our profitability
11. 50There is a high rate of failure for drug candidates proceeding through clinical trials
12. 51Regulatory risks related to psychedelic-inspired drug candidates
13. 52Our management will be required to devote a substantial time to comply with public company regulations
14. 53We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate the material weakness, or if we experience additional material weaknesses in the future, our business may be harmed

Risks Related to Our Intellectual Property

1. 54We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position
2. 55Our success depends on our ability to obtain additional intellectual property and operate without infringing the proprietary rights of others. Infringement claims by third parties may result in liability for damages or prevent or delay our developmental and commercialization efforts
3. 56We may be unsuccessful in licensing additional intellectual property to develop new product candidates
4. 57If third parties claim that intellectual property used by us infringes upon their intellectual property, our operating profits could be adversely affected
5. 58If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished
6. 59We may not be able to protect our intellectual property rights effectively outside of the United States

Risks Related to the Ownership of Our Common Stock

1. 60Our common stock could be delisted from The Nasdaq Capital Market
2. 61The market price of our common stock may be subject to significant fluctuations and volatility, and our stockholders may be unable to resell their shares at a profit and incur losses
3. 62We may issue additional equity securities in the future, which may result in dilution to existing investors
4. 63Certain stockholders could attempt to influence changes within the Company which could adversely affect our operations, financial condition and the value of our common stock
5. 64If securities analysts do not publish research or reports about our business, or if they publish negative evaluations, the price of our common stock could decline
6. 65Anti-takeover provisions under Delaware corporate law may make it difficult for our stockholders to replace or remove our board of directors and could deter or delay third parties from acquiring our Company, which may be beneficial to our stockholders
7. 66We do not anticipate paying any cash dividends in the foreseeable future
8. 67We may not be able to maintain an active trading market for our common stock
9. 68We maintain our cash at financial institutions, often in balances that exceed federally insured limits49% rewritten
10. 69We may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions