| PROSPECTUS |
|
|
|
Filed
Pursuant to Rule 424(b)(4)
Registration
No. 333-275380
|
1,279,880
Shares of Common Stock
Enveric
Biosciences, Inc.
This
prospectus relates to the offer and resale of up to 1,279,880 shares of our common stock, par value $0.01 per share, by Lincoln Park
Capital Fund, LLC, which we refer to in this prospectus as Lincoln Park or the selling stockholder.
The
shares of common stock being offered by the selling stockholder consist of:
| |
● |
up
to 1,140,477 shares of common stock that we may elect to issue and sell to Lincoln Park, in our sole discretion from time to time
after the date of this prospectus (the “Purchase Shares”), pursuant to a purchase agreement, dated as of November 3,
2023, that we entered into with Lincoln Park, which we refer to in this prospectus as the Purchase Agreement, providing for up
to $10,000,000 of gross proceeds; and |
| |
● |
139,403
shares of our common stock that we have issued to Lincoln Park on November 3, 2023 as consideration for its irrevocable commitment
to purchase our common stock under the Purchase Agreement (the “Commitment Shares”). |
See
“The Lincoln Park Transaction” for descriptions of the Purchase Agreement and “Selling Stockholder” for additional
information regarding Lincoln Park.
We
may receive gross proceeds of up to $10,000,000 from the sale of our common stock to Lincoln Park under the Purchase Agreement, from
time to time, in our discretion after the date of the registration statement of which this prospectus is a part is declared effective
and after satisfaction of other conditions in the Purchase Agreement. We are not selling any securities under this prospectus and will
not receive any of the proceeds from the sale of the shares by the selling stockholder.
Lincoln
Park may sell the shares of our common stock described in this prospectus in a number of different ways and at varying prices. The price
that Lincoln Park will pay for the shares to be resold pursuant to this prospectus will depend upon the timing of sales and will fluctuate
based on the trading price of our common stock. Lincoln Park is an “underwriter” within the meaning of Section 2(a)(11) of
the Securities Act of 1933, as amended (the “Securities Act”).
The
purchase price for the Purchase Shares will be based upon formulae set forth in the Purchase Agreement and described in this prospectus
depending on the type of purchase notice we submit to Lincoln Park from time to time. We will pay the expenses incurred in registering
the shares of our common stock, including legal and accounting fees. See “Plan of Distribution” on page 21 for more information
about how Lincoln Park may sell the shares of common stock being registered pursuant to this prospectus.
Our
common stock is listed on the Nasdaq Capital Market LLC (“Nasdaq”) under the symbol “ENVB”. The last reported
sale price of our common stock on Nasdaq on November 30, 2023 was $1.48 per share.
We
are a “smaller reporting company” under applicable Securities and Exchange Commission rules and will be subject to reduced
public company reporting requirements.
Investing
in our securities is highly speculative and involves a high degree of risk. See “Risk Factors” beginning on page 7 of this
prospectus and in the documents incorporated by reference into this prospectus for a discussion of information that should be considered
in connection with an investment in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is December 6, 2023.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus forms part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, and that includes
exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits
filed with the SEC, together with the additional information described under the headings “Where You Can Find More Information”
and “Incorporation of Certain Information by Reference” before making your investment decision.
You
should rely only on the information provided in this prospectus or any free writing prospectuses or amendments thereto. Neither we, nor
the selling stockholder, have authorized anyone else to provide you with different information. If anyone provides you with different
or inconsistent information, you should not rely on it. You should assume that the information in this prospectus is accurate only as
of the date hereof. Our business, financial condition, results of operations and prospects may have changed since that date.
Neither
we, nor the selling stockholder, are offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer
or sale is not permitted. We have not done anything that would permit this offering or possession or distribution of this prospectus
in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who
come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities
as to distribution of the prospectus outside of the United States.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider
before making your investment decision. Before investing in our securities, you should carefully read this entire prospectus and the
documents incorporated by reference herein, including the “Risk Factors” section in this prospectus and under similar captions
in the documents incorporated by reference into this prospectus. If any of the risks materialize, our business, financial condition,
operating results, and prospects could be materially and adversely affected. In that event, the price of our securities could decline,
and you could lose part or all of your investment. Unless we state otherwise or the context otherwise requires, the terms “we,”
“us,” “our,” “our business,” “the Company” and “Enveric” refer to and similar
references refer to Enveric Biosciences Inc. and its consolidated subsidiaries.
Overview
Enveric
Biosciences is a biotechnology company dedicated to the development of novel neuroplastogenic small-molecule therapeutics for the treatment
of depression, anxiety, and addiction disorders. Leveraging its unique discovery and development platform, The Psybrary™, Enveric
has created a robust Intellectual Property portfolio of New Chemical Entities for specific mental health indications. Enveric’s
lead program, the EVM201 Series, comprises next generation synthetic prodrugs of the active metabolite, psilocin. Enveric is developing
the first product from the EVM201 Series – EB-373 – for the treatment of psychiatric disorders. Enveric is also advancing
its second program, the EVM301 Series, expected to offer a first-in-class, new approach to the treatment of difficult-to-address mental
health disorders, mediated by the promotion of neuroplasticity without also inducing hallucinations in the patient.
Corporate
Information
We
were incorporated under the laws of the State of Delaware in February 1994 as Spatializer Audio Laboratories, Inc., which was a shell
company immediately prior to the completion of a “reverse merger” transaction on May 26, 2015, whereby Ameri100 Acquisition,
Inc., a Delaware corporation and newly created, wholly owned subsidiary, was merged with and into Ameri and Partners Inc., a Delaware
corporation (the “2015 Merger”). In connection with the 2015 Merger, we changed our name to AMERI Holdings, Inc.
The
Ameri business ceased to be part of the Company on December 30, 2020, pursuant to a spin-off transaction. On December 30, 2020, we completed
a tender offer to purchase all of the outstanding common shares of Jay Pharma Inc., a Canada corporation, for shares of Company common
stock or certain preferred stock, and changed our name to “Enveric Biosciences, Inc.” Our principal corporate office is located
at Enveric Biosciences, Inc., 4851 Tamiami Trail N, Suite 200, Naples, Florida 34103, telephone (239) 302-1707. Our internet address
is https://www.enveric.com/. The information contained on, or that can be accessed through, our website is not a part of this prospectus.
Our trademarks and trade names include, but may not be limited to, “Enveric,” and the Enveric logo.
On
May 24, 2021, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C. Ltd., a
corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company (“HoldCo”),
1306436 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of HoldCo
(“Purchaser”), and MagicMed Industries Inc., a corporation existing under the laws of the Province of British Columbia (“MagicMed”),
pursuant to which, among other things, the Company, indirectly through Purchaser, acquired all of the outstanding securities of MagicMed
in exchange for securities of the Company by way of an amalgamation under the British Columbia Business Corporations Act, upon the terms
and conditions set forth in the Amalgamation Agreement, such that, upon completion of the Amalgamation, the amalgamated corporation (“Amalco”)
will be an indirect wholly-owned subsidiary of the Company. The Amalgamation was completed on September 16, 2021.
Psychedelics
Following
our amalgamation with MagicMed completed in September 2021 (the “Amalgamation”), we have continued to pursue the development
of MagicMed’s proprietary psychedelic derivatives library, the Psybrary™ which we believe will help us to identify and develop
the right drug candidates needed to address mental health challenges, including anxiety. We synthesize novel versions of classic psychedelics,
such as psilocybin, N-dimethyltryptamine (DMT), mescaline and MDMA, using a mixture of chemistry and synthetic biology, resulting in
the expansion of the Psybrary™, which includes 15 patent families with over a million potential variations and hundreds of synthesized
molecules. Within the Psybrary™ we have three different types of molecules, Generation 1 (classic psychedelics), Generation 2 (pro-drugs),
and Generation 3 (new chemical entities). The Company is working to add novel psychedelic molecular compounds and derivatives (“Psychedelic
Derivatives”) on a regular basis through our work at Enveric Labs in Calgary, Alberta, Canada, where we have a team of PhD scientists
with expertise in synthetic biology and chemistry. To date we have created over 500 molecules that are housed in the Psybrary™.
We
screen newly synthesized molecules in the Psybrary™ through PsyAI™, a proprietary artificial intelligence (AI) tool. Leveraging
AI systems is expected to reduce the time and cost of pre-clinical, clinical, and commercial development. We believe it streamlines pharmaceutical
design by predicting ideal binding structures of molecules, manufacturing capabilities, and pharmacological effects to help determine
ideal drug candidates, tailored to each indication. Each of these molecules that we believe are patentable can then be further screened
to see how changes to its makeup alter its effects in order to synthesize additional new molecules. New compounds of sufficient purity
are undergoing pharmacological screening, including non-clinical (receptors/cell lines), preclinical (animal), and ultimately clinical
(human) evaluations. We intend to utilize our Psybrary™ and the AI tool to categorize and characterize the Psybrary™ substituents
to focus on bringing more psychedelics-inspired molecules from discovery to the clinical phase.
Product
Candidates
Our
pipeline of product candidates and key ongoing development programs are shown in the tables below:
| Product
Candidates |
|
Targeted
Indications |
|
Partner(s) |
|
Status |
|
Expected
Next Steps |
EVB-373
Second-generation
psychedelic asset: prodrug of psilocin |
|
Anxiety |
|
|
|
Research & Development,
Pre-clinical studies |
|
Filing of HREC for FIH
study in Australia |
| |
|
|
|
|
|
|
|
|
EVM-301
Third-generation
psychedelic-inspired new chemical entity |
|
Mental health indication |
|
|
|
Research & Development,
Hit-to-Lead Generation |
|
Lead Candidate Selection |
Reverse
Stock Split
On
July 14, 2022, the Company effected a 1-for-50 reverse stock split. All historical share and per share amounts reflected in this prospectus
have been adjusted to reflect the reverse stock split, however, the historical share and per share amounts reflected in the accompanying
base prospectus have not been adjusted to reflect the reverse stock split.
The
Lincoln Park Equity-Line
On
November 3, 2023, we entered into a Purchase Agreement with Lincoln Park, pursuant to which,
subject to the terms and conditions set forth therein, we may sell to Lincoln Park up to an aggregate of $10.0 million of our common
stock from time to time over the term of the Purchase Agreement. Pursuant to the Purchase Agreement, we issued 139,403 Commitment Shares
to Lincoln Park as a fee for making its irrevocable commitment to purchase our common stock under the Purchase Agreement.
On
November 3, 2023, we entered into a registration rights agreement with Lincoln Park, which we refer to in this prospectus as the
Registration Rights Agreement, pursuant to which we filed with the SEC the registration statement that includes this prospectus to register
for resale under the Securities Act, the shares of our common stock that have been or may be issued to Lincoln Park under the Purchase
Agreement.
This
prospectus covers the resale by the selling stockholder of up to 1,279,880 shares of our common stock, comprised of: (i) up to 1,140,477
shares of our common stock that we have reserved for sale to Lincoln Park under the Purchase Agreement from time to time after the date
of this prospectus, if and when we determine to sell additional shares of our common stock to Lincoln Park under the Purchase Agreement
and (ii) 139,403 Commitment Shares that we have already issued to Lincoln Park in lieu of a cash fee for making its irrevocable commitment
to purchase our common stock under the Purchase Agreement.
Such
sales of common stock by the Company, if any, will be subject to certain limitations set forth in the Purchase Agreement, and 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 the registration statement that includes
this prospectus is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC (the date on which all
of such conditions are satisfied, the “Commencement Date”). From and after the Commencement Date, we may, from time to time
and at our sole discretion for a period of 24-months, on any business day that we select, direct Lincoln Park to purchase up to 25,000
shares of our common stock if the price is not below $0.10, up to 30,000 shares if not below $5.00, and up to 35,000 if the price is
not below $10.00, subject to a maximum commitment of $500,000 per purchase, which we refer to in this prospectus as “Regular Purchases.”
The purchase price per share of common stock sold in each such Regular Purchase, if any, will be equal to the lesser of (i) the lowest
sale of the common stock during the Purchase Date or (ii) the average of the three (3) lowest sale prices of the common stock during
the ten (10) business days prior to the Purchase Date.
In
addition to Regular Purchases, provided that we have directed Lincoln Park to purchase the maximum amount of shares that we are then
able to sell to Lincoln Park in a Regular Purchase, we may, in our sole discretion, also direct Lincoln Park to purchase additional shares
of common stock in “accelerated purchases,” and “additional accelerated purchases” as set forth in the Purchase
Agreement, provided that all shares of common stock subject to all prior Regular Purchases, accelerated purchases and additional accelerated
purchases (as applicable) that we have effected under the Purchase Agreement have been received by Lincoln Park before we deliver notice
to Lincoln Park for the applicable accelerated purchase or additional accelerated purchase in accordance with the Purchase Agreement.
We
will control the timing and amount of any sales of our common stock to Lincoln Park. The purchase price of the shares of our common stock
that may be sold to Lincoln Park in Regular Purchases, accelerated purchases, and additional accelerated purchases under the Purchase
Agreement will be based on the market price of our common stock immediately preceding the time of sale as computed under the Purchase
Agreement. The purchase price per share will be equitably adjusted as provided in the Purchase Agreement for any reorganization, recapitalization,
non-cash dividend, stock split, or other similar transaction as set forth in the Purchase Agreement. We may at any time in our sole discretion
terminate the Purchase Agreement without fee, penalty or cost upon one business day notice. In the event of bankruptcy proceedings by
or against us, the Purchase Agreement will automatically terminate without action of any party. No termination of the Purchase Agreement
will be effective during the pendency of any Regular Purchase, accelerated purchase or additional accelerated purchase that has not then
fully settled in accordance with the Purchase Agreement.
There
are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase
Agreement or Registration Rights Agreement, except the Company is prohibited (with certain specified exceptions set forth in the Purchase
Agreement) from effecting or entering into an agreement to effect an “equity line of credit” or other continuous offering
or similar offering in which the Company may issue and sell common stock, from time to time over a certain period of time, at future
determined prices based on the market prices of the common stock at the time of each such issuance and sale. Lincoln Park has represented
to us that at no time prior to the time of execution of the Purchase Agreement has Lincoln Park or its agents, representatives or affiliates
engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation
SHO under the Exchange Act) of our Common Stock or any hedging transaction, which establishes a net short position with respect to our
Common Stock. Lincoln Park agreed that during the term of the Purchase Agreement, it, its agents, representatives or affiliates will
not enter into or effect, directly or indirectly, any of the foregoing transactions.
As
of November 30, 2023, there were 2,321,315 shares of our common stock outstanding, which includes the Commitment Shares. Although
the Purchase Agreement provides that we may sell up to an aggregate of $10.0 million of our common stock to Lincoln Park, only 1,279,880
shares of our common stock are being registered for resale under this prospectus, which includes the 139,403 Commitment Shares that we
already issued to Lincoln Park as a fee for making its irrevocable commitment to purchase our common stock under the Purchase Agreement.
Depending on the market prices of our common stock at the time we elect to issue and sell shares of our common stock to Lincoln Park
under the Purchase Agreement, we may need to register for resale under the Securities Act additional shares of our common stock in order
to receive aggregate gross proceeds equal to the $10.0 million total commitment available to us under the Purchase Agreement. If we elect
to issue and sell to Lincoln Park under the Purchase Agreement more than the 1,140,477 shares of our common stock being registered for
resale by Lincoln Park under this prospectus, which we have the right, but not the obligation, to do, we must first register for resale
under the Securities Act any such additional shares of our common stock, which could cause additional substantial dilution to our stockholders.
The number of shares of our common stock ultimately offered for resale by Lincoln Park is dependent upon the number of shares of our
common stock we ultimately decide to sell to Lincoln Park under the Purchase Agreement.
In no event may we issue
or sell to Lincoln Park under the Purchase Agreement shares of our common stock in excess of 7,692,308 shares (including the Commitment
Shares), which represents the amount approved by our stockholders at the Company’s Annual Meeting of Stockholders on November
2, 2023 pursuant to Nasdaq Marketplace Rules 5635(a), (b), and (d), which limitation we refer to as the Stockholder Approved
Exchange Cap, unless we obtain further stockholder approval to issue shares of our common stock in excess of the Stockholder
Approved Exchange Cap.
The
Purchase Agreement prohibits us from directing Lincoln Park to purchase any shares of our common stock if those shares of our common
stock, when aggregated with all other shares of our common stock then beneficially owned by Lincoln Park and its affiliates, would result
in Lincoln Park having beneficial ownership, at any single point in time, of more than 9.99% of the then total outstanding shares of
our common stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and
Rule 13d-3 thereunder, which limitation we refer to as the Beneficial Ownership Cap.
Issuances
of our common stock to Lincoln Park under the Purchase Agreement will not affect the rights or privileges of our existing stockholders,
except that the economic and voting interests of each of our existing stockholders will be diluted as a result of any such issuance.
Although the number of shares of our common stock that our existing stockholders own will not decrease, the shares of our common stock
owned by our existing stockholders will represent a smaller percentage of our total outstanding shares of our common stock after any
such issuance of shares of our common stock to Lincoln Park under the Purchase Agreement. There are substantial risks to our stockholders
as a result of the sale and issuance of common stock to Lincoln Park under the Purchase Agreement. See “Risk Factors.”
Corporate
Information
Our
primary executive offices are located at 4851 Tamiami Trail N, Suite 200 Naples, FL 34103and our telephone number is (239) 302-1707.
Our website address is www.enveric.com. The information contained on, or that can be accessed through, our website is not part
of this prospectus and should not be considered as part of this prospectus or in deciding whether to purchase our securities.
Psybrary,
PsyAI and our logo are some of our trademarks used in this prospectus. This prospectus also includes trademarks, tradenames and service
marks that are the property of other organizations. Solely for convenience, our trademarks and tradenames referred to in this prospectus
may appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert,
to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and tradenames.
Implications
of Being a Smaller Reporting Company
We
are a smaller reporting company as defined in the Exchange Act, and we will remain a smaller reporting company until the fiscal year
following:
| |
● |
The
determination that our voting and non-voting common stock held by non-affiliates is more than $250 million measured on the last business
day of our second fiscal quarter; or |
| |
|
|
| |
● |
Our
annual revenue is more than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held
by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter. |
Smaller
reporting companies are able to provide simplified executive compensation disclosure and have certain other reduced disclosure obligations,
including, among other things, being required to provide only two years of audited financial statements and not being required to provide
selected financial data, supplemental financial information or risk factors.
Further,
as a non-accelerated filer, we will not be required to provide an auditor attestation of management’s assessment of internal control
over financial reporting, which is generally required for SEC reporting companies under Sarbanes-Oxley Act Section 404(b), and, in contrast
to other reporting companies, we’ll have more time to file our annual and periodic reports.
THE
OFFERING
| Shares
of our common stock offered by the selling stockholder |
|
Up
to 1,279,880 shares of common stock consisting of:
●
up to 1,140,477 shares of our common stock that we may issue and sell to Lincoln Park from time to time under the Purchase Agreement
from and after the commencement; and
●
139,403 Commitment Shares issued to Lincoln Park as a fee for making its irrevocable commitment to purchase our common stock under
the Purchase Agreement |
| |
|
|
| Selling stockholder |
|
Lincoln
Park Capital Fund, LLC. See “Selling Stockholder” on page 17 of this prospectus. |
| |
|
|
Common
stock outstanding prior to this offering
|
|
2,321,315
shares, which includes the Commitment Shares.
|
| Common stock outstanding
immediately after this offering |
|
3,461,792
shares, assuming the sale of 1,140,477 shares. The actual number of shares issued will vary depending on the sales prices in this
offering. |
| |
|
|
| Use of Proceeds |
|
We
will receive no proceeds from the sale of shares of our common stock by Lincoln Park pursuant to this prospectus. We may receive
up to $10.0 million aggregate gross proceeds under the Purchase Agreement from any sales of shares of our common stock we make to
Lincoln Park pursuant to the Purchase Agreement after the commencement, assuming that we sell the full amount of our common stock
that we have the right, but not the obligation to sell to Lincoln Park under the Purchase Agreement. Any proceeds that we receive
from sales of shares of our common stock to Lincoln Park under the Purchase Agreement will be used for general corporate purposes.
See “Use of Proceeds.” |
| |
|
|
| Nasdaq Capital Markets
Symbols |
|
Our
common stock is listed on Nasdaq under the symbol “ENVB”. |
| |
|
|
| Risk Factors |
|
Investment
in our securities involves a high degree of risk and could result in a loss of your entire investment. See “Risk Factors”
beginning on page 7, and the other information included and incorporated by reference in this prospectus for a discussion of the
factors you should consider carefully before deciding to invest in our securities. |
The
number of shares of our common stock to be outstanding immediately after this offering is based on 2,321,315 shares of our common
stock outstanding as of November 30, 2023, including the 139,403 Commitment Shares issued to Lincoln Park Capital on November
3, 2023, and excludes, as of such date, the following:
| ● | 31,616
shares
of our Common Stock issuable upon exercise of outstanding options granted under our equity
incentive plans at a weighted average exercise price of $53.37 per share; |
| ● | 60,793
shares
of our Common Stock available for issuance or future grant pursuant to our equity incentive
plan; |
| ● | 169,098
shares
of our Common Stock issuable upon vesting of restricted stock units granted, inclusive of
20,847 shares previously vested and unissued, under our equity incentive plans; and |
| ● | 609,893
shares
of our Common Stock issuable upon exercise of outstanding warrants at a weighted average
exercise price of $50.46 per share and 1,070,000 shares of our Common Stock issuable upon
exercise of outstanding investment options at a weighted average exercise price of $7.93
per share. |
| ● | 1,077,709
shares of our Common Stock registered as part of the prospectus supplement filed September
1, 2023. |
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before deciding whether to purchase our securities, including the shares
of common stock offered by this prospectus, you should carefully consider the risks and uncertainties described under “Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, any subsequent Quarterly Report on Form 10-Q and our other
filings with the SEC, all of which are incorporated by reference herein. If any of these risks actually occur, our business, financial
condition and results of operations could be materially and adversely affected and we may not be able to achieve our goals, the value
of our securities could decline and you could lose some or all of your investment. Additional risks not presently known to us or that
we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business,
results of operations or financial condition and prospects could be harmed. In that event, the market price of our common stock, and
you could lose all or part of your investment.
It
is not possible to predict the actual number of shares of common stock we may sell to Lincoln Park under the Purchase Agreement, or the
actual gross proceeds resulting from those sales.
Because
the purchase price per share to be paid by Lincoln Park for the shares of common stock that we may elect to sell to Lincoln Park under
the Purchase Agreement, if any, will fluctuate based on the market prices of our common stock at the time we elect to sell shares to
Lincoln Park pursuant to the Purchase Agreement, if any, it is not possible for us to predict, as of the date of this prospectus and
prior to any such sales, the number of shares of common stock that we will sell to Lincoln Park under the Purchase Agreement, the purchase
price per share that Lincoln Park will pay for shares purchased from us under the Purchase Agreement, or the aggregate gross proceeds
that we will receive from those purchases by Lincoln Park under the Purchase Agreement.
Lincoln
Park may sell the shares of our common stock described in this prospectus in a number of different ways and at varying prices. The number
of shares of our common stock ultimately offered for sale by Lincoln Park is dependent upon the number of shares of common stock, if
any, we ultimately sell to Lincoln Park under the Purchase Agreement.
The
terms of the Purchase Agreement limit the amount of shares of common stock we may issue to Lincoln Park, which may limit our ability
to utilize the arrangement to enhance our cash resources.
The
Purchase Agreement includes restrictions on our ability to sell shares of common stock to Lincoln Park, including, subject to specified
limitations, if a sale would cause Lincoln Park and its affiliates to exceed the Beneficial Ownership Cap.
Accordingly,
we cannot guarantee that we will be able to sell all 1,140,477 Purchase Shares in this offering. If we cannot sell the full amount of
the shares of common stock that Lincoln Park has committed to purchase because of these limitations, we may be required to utilize more
costly and time-consuming means of accessing the capital markets, which could materially adversely affect our liquidity and cash position.
If we choose to sell more shares of common stock than are offered under this prospectus, we must first register for resale under the
Securities Act such additional shares of common stock.
Investors
who buy shares at different times will likely pay different prices.
Pursuant
to the Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold
to Lincoln Park. If and when we do elect to sell shares of our common stock to Lincoln Park pursuant to the Purchase Agreement, after
Lincoln Park has acquired such shares, Lincoln Park may resell all, some or none of such shares at any time or from time to time in its
discretion and at different prices. As a result, investors who purchase shares from Lincoln Park in this offering at different times
will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution
and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from
Lincoln Park in this offering as a result of future sales made by us to Lincoln Park at prices lower than the prices such investors paid
for their shares in this offering.
The
sale or issuance of our common stock to Lincoln Park may cause dilution and the sale of the shares of common stock by Lincoln Park that
it acquires pursuant to the Purchase Agreement, or the perception that such sales may occur, could cause the price of our common stock
to decrease.
On
November 3, 2023, we entered into the Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has committed to purchase
up to $10.0 million of our common stock. Upon the execution of the Purchase Agreement, we issued 139,403 Commitment Shares to Lincoln
Park as a fee for its commitment to purchase shares of our common stock under the Purchase Agreement. The shares of our common stock
that may be issued under the Purchase Agreement may be sold by us to Lincoln Park at our sole discretion from time to time over a 24-month
period commencing after the satisfaction of certain conditions set forth in the Purchase Agreement. The purchase price for the shares
that we may sell to Lincoln Park under the Purchase Agreement will fluctuate based on the trading price of our common stock. Depending
on market liquidity at the time, sales of such shares may cause the trading price of our common stock to decrease. We generally have
the right to control the timing and amount of any future sales of our shares to Lincoln Park. Additional sales of our common stock, if
any, to Lincoln Park will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to
Lincoln Park all, some or none of the additional shares of our common stock that may be available for us to sell pursuant to the Purchase
Agreement. If and when we do sell shares to Lincoln Park, after Lincoln Park has acquired the shares, Lincoln Park may resell all, some
or none of those shares at any time or from time to time in its discretion. Therefore, sales to Lincoln Park by us could result in substantial
dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common
stock to Lincoln Park, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities
in the future at a time and at a price that we might otherwise wish to effect sales.
Our
management will have broad discretion over the use of the net proceeds from our sale of shares of common stock to Lincoln Park, you may
not agree with how we use the proceeds and the proceeds may not be invested successfully.
Our
management will have broad discretion as to the use of the net proceeds from our sale of shares of common stock to Lincoln Park, and
we could use them for purposes other than those contemplated at the time of commencement of this offering. Accordingly, you will be relying
on the judgment of our management with regard to the use of those net proceeds, and you will not have the opportunity, as part of your
investment decision, to assess whether the proceeds are being used appropriately. It is possible that, pending their use, we may invest
those net proceeds in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively
could have a material adverse effect on our business, financial condition, operating results and cash flows.
Because
we will not declare cash dividends on our common stock in the foreseeable future, stockholders must rely on appreciation of the value
of our common stock for any return on their investment.
We
have never declared or paid cash dividends on our common stock. We currently anticipate that we will retain any future earnings from
the development, operation and expansion of our business and will not declare or pay any cash dividends in the foreseeable future. As
a result, only appreciation of the price of our common stock, if any, will provide a return to investors in this offering.
In the event that we fail to regain compliance
with the listing requirements of Nasdaq or satisfy any of the listing requirements of Nasdaq, our common stock may be delisted, which
could affect our market price and liquidity.
Our common stock is listed
on Nasdaq. For continued listing on Nasdaq, we will be required to comply with the continued listing requirements, including the minimum
market capitalization standard, the stockholders’ equity requirement, the corporate governance requirements and the minimum closing
bid price requirement, among other requirements. On November 21, 2023, we received a letter from the Nasdaq staff indicating that, based
on our reported stockholders’ equity of $2,435,646 reported on Form 10-Q for the period ended September 30, 2023, we were not in
compliance with the stockholders’ equity requirement of at least $2,500,000 pursuant to Listing Rule 5550(b)(1). We intend to regain
compliance with Listing Rule 5550(b)(1).
In
the event that we fail to regain compliance with Listing Rule 5550(b)(1) or satisfy any of the listing requirements of Nasdaq, our common
stock may be delisted. If we are unable to list on Nasdaq, we would likely be more difficult to trade in or obtain accurate quotations
as to the market price of our common stock. If our common stock is delisted from trading on Nasdaq, and we are not able to list our common
stock on another exchange or to have it quoted on Nasdaq, our securities could be quoted on the OTC Bulletin Board or on the “pink
sheets.” As a result, we could face significant adverse consequences including, without limitation:
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a
limited availability of market quotations for our securities; |
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a
determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere
to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
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a
limited amount of news and analyst coverage for our Company; and |
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a
decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain
additional financing in the future). |
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
Except
for historical information, this prospectus and any documents we incorporate by reference contain forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Such forward-looking statements include, among others,
those statements including the words “believes,” “anticipates,” “expects,” “intends,”
“estimates,” “plans,” and words of similar import. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially
different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Forward-looking
statements are based on our current expectations and assumptions regarding our business, potential target businesses, the economy and
other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by
the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements
of historical fact or as guarantees or assurances of future performance. You should understand that many important factors, in addition
to those discussed in this prospectus, the accompanying prospectus and any documents we incorporate by reference, could cause our results
to differ materially from those expressed in the forward-looking statements. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include changes in local, regional, national, or global political, economic,
business, competitive, market (supply and demand) and regulatory conditions and the following:
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our dependence on the success of our prospective product candidates, which are in early stages of development and may not reach a particular stage in development, receive regulatory approval or be successfully commercialized; |
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potential difficulties that may delay, suspend, or scale back our efforts to advance additional early research programs through preclinical development and investigational new drug application filings and into clinical development; |
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the risk that the cost savings, synergies and growth from our combination with MagicMed Industries Inc. and the successful use of the rights and technologies acquired in the combination may not be fully realized or may take longer to realize than expected; |
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the impact of the novel coronavirus (COVID-19) on our business, including our 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; |
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the limited study on the effects of medical cannabinoids and psychedelics, and the chance that future clinical research studies may lead to conclusions that dispute or conflict with our understanding and belief regarding the medical benefits, viability, safety, efficacy, dosing, and social acceptance of cannabinoids or psychedelics; |
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the expensive, time-consuming, and uncertain nature of clinical trials, which are susceptible to change, delays, termination, and differing interpretations; |
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the ability to establish that potential products are efficacious or safe in preclinical or clinical trials; |
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the fact that our current and future preclinical and clinical studies may be conducted outside the United States, and the United States Food and Drug Administration may not accept data from such studies to support any new drug applications we may submit after completing the applicable developmental and regulatory prerequisites; |
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our ability to effectively and efficiently build, maintain and legally protect our molecular derivatives library so that it can be an essential building block from which those in the biotech industry can develop new patented products; |
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our ability to establish or maintain collaborations on the development of therapeutic candidates; |
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our ability to obtain appropriate or necessary governmental approvals to market potential products; |
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our ability to manufacture product candidates on a commercial scale or in collaborations with third parties; |
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our significant and increasing liquidity needs and potential requirements for additional funding; |
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our ability to obtain future funding for developing products and working capital and to obtain such funding on commercially reasonable terms; |
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legislative changes related to and affecting the healthcare system, including, without limitation, changes and proposed changes to the Patient Protection and Affordable Care Act; |
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the intense competition we face, often from companies with greater resources and experience than us; |
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our ability to retain key executives and scientists; |
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the ability to secure and enforce legal rights related to our products, including intellectual property rights and patent protection; |
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political, economic, and military instability in Israel which may impede our development programs; as well as |
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our ability to successfully spin off our cannabinoid assets. |
Other
sections of this prospectus and any documents we incorporate by reference describe additional risk factors that could adversely impact
our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from
time to time, and it is not possible for our management to predict all risk factors and uncertainties, nor are we able to assess the
impact of all of these risk factors on our business or the extent to which any risk factor, or combination of risk factors, may cause
actual results to differ materially from those contained in any forward-looking statements. These risks and others described under the
section “Risk Factors” in this prospectus and any documents we incorporate by reference are not exhaustive.
Given
these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to
update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein
to reflect future events or developments.
THE
LINCOLN PARK TRANSACTION
This
prospectus covers the resale by the selling stockholder of up to 1,279,880 shares of our common stock, comprised of: (i) up to 1,140,477
shares of our common stock that we have reserved for sale to Lincoln Park under the Purchase Agreement from time to time after the date
of this prospectus, if and when we determine to sell additional shares of our common stock to Lincoln Park under the Purchase Agreement
and (ii) 139,403 Commitment Shares that we have already issued to Lincoln Park as a fee for making its irrevocable commitment to purchase
our common stock under the Purchase Agreement.
General
On
November 3, 2023, we entered into the Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park has agreed to purchase
from us up to an aggregate of $10.0 million of our common stock (subject to certain limitations) from time to time over the term of the
Purchase Agreement. Pursuant to the Purchase Agreement we issued 139,403 Commitment Shares to Lincoln Park as a fee for making its irrevocable
commitment to purchase our common stock under the Purchase Agreement. Capitalized terms used herein that are not otherwise defined have
the meaning assigned in the Purchase Agreement.
On
November 3, 2023, we entered into the Registration Rights Agreement, pursuant to which we filed with the SEC the registration
statement that includes this prospectus to register for resale under the Securities Act, the shares of our common stock that have been
or may be issued to Lincoln Park under the Purchase Agreement.
We
do not have the right to commence any sales of our common stock to Lincoln Park under the Purchase Agreement until all of the conditions
set forth in the Purchase Agreement have been satisfied, including that the SEC has declared effective the registration statement that
includes this prospectus registering the shares of our common stock that have been and may be issued and sold to Lincoln Park under the
Purchase Agreement, which we refer to in this prospectus as the commencement, or Commencement Date. From and after the commencement,
we may, from time to time and at our sole discretion for a period of 24-months, on any business day that we select, direct Lincoln Park
to purchase up to 25,000 shares of our common stock, which amount may be increased depending on the market price of our common stock
at the time of sale, subject to a maximum commitment of $500,000 per purchase, which we refer to in this prospectus as “Regular
Purchases.” In addition, at our discretion, Lincoln Park has committed to purchase other “accelerated amounts” and/or
“additional accelerated amounts” under certain circumstances.
We
will control the timing and amount of any sales of our common stock to Lincoln Park. The purchase price of the shares of our common stock
that may be sold to Lincoln Park in Regular Purchases, accelerated purchases, and additional accelerated purchases under the Purchase
Agreement will be based on the market price of our common stock immediately preceding the time of sale as computed under the Purchase
Agreement. The purchase price per share will be equitably adjusted as provided in the Purchase Agreement for any reorganization, recapitalization,
non-cash dividend, stock split, or other similar transaction as set forth in the Purchase Agreement. We may at any time in our sole discretion
terminate the Purchase Agreement without fee, penalty or cost upon one business day notice. Actual sales of shares of common stock by
the Company to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time
to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the
appropriate sources of funding for the Company and its operations.
As
of November 30, 2023, there were 2,321,315 shares of our common stock outstanding, which includes the Commitment Shares. Although
the Purchase Agreement provides that we may sell up to an aggregate of $10.0 million of our common stock to Lincoln Park, only 1,279,880
shares of our common stock are being registered for resale under this prospectus, which includes the 139,403 Commitment Shares that we
issued to Lincoln Park as a fee for making its irrevocable commitment to purchase our common stock under the Purchase Agreement. Depending
on the market prices of our common stock at the time we elect to issue and sell shares of our common stock to Lincoln Park under the
Purchase Agreement, we may need to register for resale under the Securities Act additional shares of our common stock in order to receive
aggregate gross proceeds equal to the $10.0 million total commitment available to us under the Purchase Agreement. If we elect to issue
and sell to Lincoln Park under the Purchase Agreement more than the 1,140,477 shares of our common stock being registered for resale
by Lincoln Park under this prospectus, which we have the right, but not the obligation, to do, we must first register for resale under
the Securities Act any such additional shares of our common stock, which could cause additional substantial dilution to our stockholders.
The number of shares of our common stock ultimately offered for resale by Lincoln Park is dependent upon the number of shares of our
common stock we ultimately decide to sell to Lincoln Park under the Purchase Agreement.
In no event may we issue or sell to Lincoln Park under the Purchase Agreement shares of our common stock
in excess of 7,692,308 shares (including the Commitment Shares), which represents the amount approved by our stockholders
at the Company’s Annual Meeting of Stockholders on November 2, 2023, pursuant to Nasdaq Marketplace Rules 5635(a), (b), and (d),
which limitation we refer to as the Stockholder Approved Exchange Cap, unless we obtain further stockholder approval
to issue shares of our common stock in excess of the Stockholder Approved Exchange Cap.
The
Purchase Agreement prohibits us from directing Lincoln Park to purchase any shares of our common stock if those shares of our common
stock, when aggregated with all other shares of our common stock then beneficially owned by Lincoln Park and its affiliates, would result
in Lincoln Park having beneficial ownership, at any single point in time, of more than 9.99% of the then total outstanding shares of
our common stock, as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and
Rule 13d-3 thereunder, which limitation we refer to as the Beneficial Ownership Cap.
Issuances
of our common stock to Lincoln Park under the Purchase Agreement will not affect the rights or privileges of our existing stockholders,
except that the economic and voting interests of each of our existing stockholders will be diluted as a result of any such issuance.
Although the number of shares of our common stock that our existing stockholders own will not decrease, the shares of our common stock
owned by our existing stockholders will represent a smaller percentage of our total outstanding shares of our common stock after any
such issuance of shares of our common stock to Lincoln Park under the Purchase Agreement. There are substantial risks to our stockholders
as a result of the sale and issuance of common stock to Lincoln Park under the Purchase Agreement. See “Risk Factors.”
Purchase
of Shares of our Common Stock Under the Purchase Agreement
Regular
Purchases
From
and after the Commencement Date, on any business day selected by the Company (and provided all shares of common stock subject to all
prior Regular Purchases have been properly delivered to Lincoln Park in accordance with the Purchase Agreement), the Company may, by
written notice delivered by us to Lincoln Park, direct Lincoln Park to purchase up to 25,000 shares of our common stock on such business
day in a Regular Purchase, provided that the closing sale price per share is not below $0.10, however, that the maximum number of shares
we may sell to Lincoln Park in a Regular Purchase may be increased to up to (i) 30,000 shares of our common stock, provided that the
closing sale price of our common stock is not below $5.00 on the purchase date, and (ii) 35,000 shares of our common stock, provided
that the closing sale price of our common stock is not below $10.00 on the purchase date (such share amount limitation, the “Regular
Purchase Share Limit”). In each case, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $500,000.
The
purchase price per share for each such Regular Purchase will be equal to the lower of:
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the
lowest sale price for our common stock on the purchase date for such shares of our common stock; and |
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the
arithmetic average of the three lowest closing sale prices for our common stock during the 10 consecutive business days ending on
the business day immediately preceding the purchase date of such shares of our common stock. |
A
purchase notice for a Regular Purchase may only be issued after the markets have closed (i.e., after 4:00 pm Eastern time), which ensures
that the purchase price is always known and fixed at the time the purchase notice is issued.
Accelerated
Purchases
In
addition to Regular Purchases described above, we may also direct Lincoln Park, on any Purchase Date for a Regular Purchase on which
we have properly submitted a Regular Purchase notice directing Lincoln Park to purchase the maximum number of shares of our common stock
that we are then permitted to include in a single Regular Purchase notice (and provided all shares of common stock subject to all prior
Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases effected prior to such Purchase Date have been properly
delivered to Lincoln Park in accordance with the Purchase Agreement), to purchase an additional amount of our common stock, which we
refer to as an Accelerated Purchase, on the next business day following such Purchase Date for such corresponding Regular Purchase, which
we refer to as the Accelerated Purchase Date, not to exceed the lesser of:
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30%
of the aggregate number of shares of our common stock traded during all or, if certain trading volume or market price thresholds
specified in the Purchase Agreement are crossed on the applicable Accelerated Purchase Date, the portion of the normal trading hours
on the applicable Accelerated Purchase Date prior to such time that any one of such thresholds is crossed, which period of time on
the applicable Accelerated Purchase Date we refer to as the Accelerated Purchase Measurement Period; and |
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300%
of the number of Purchase Shares directed by the Company to be purchased by Lincoln Park pursuant to the Regular Purchase Notice
for the corresponding Regular Purchase to the Accelerated Purchase effected on such same Accelerated Purchase Date (subject to the
Purchase Share limitations, an amount equal to (A) the Accelerated Purchase Share Percentage multiplied by (B) the total number (or
volume) of shares of Common Stock traded on the Principal Market during the period on the applicable Accelerated Purchase date beginning
at the Accelerated Purchase Commencement Time for such Accelerated Purchase and ending at the Accelerated Purchase Termination Time
for such Accelerated Purchase. |
The
purchase price per share for the shares subject to an Accelerated Purchase will be equal to 94% of the lower of:
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the
volume weighted average price of our common stock during the Accelerated Purchase Measurement Period on the applicable Accelerated
Purchase Date; and |
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the
closing sale price of our common stock on the applicable Accelerated Purchase Date. |
Additional
Accelerated Purchases
We
may also direct Lincoln Park, by written notice delivered to Lincoln Park, not later than 1:00 p.m., Eastern Time, on the same Accelerated
Purchase Date on which an Accelerated Purchase Measurement Period for an Accelerated Purchase has ended prior to such time (and provided
all shares of common stock subject to all prior Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases, including
those prior Accelerated Purchases and Additional Accelerated Purchases effected on the same Accelerated Purchase Date as the applicable
Additional Accelerated Purchase have been properly delivered to Lincoln Park in accordance with the Purchase Agreement prior to such
time), to purchase an additional amount of our common stock on such same Accelerated Purchase Date, which we refer to as an Additional
Accelerated Purchase, of up to the lesser of:
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30%
of the aggregate number of shares of our common stock traded during the portion of the normal trading hours on the applicable Accelerated
Purchase Date determined in accordance with the Purchase Agreement, which period of time on the applicable Accelerated Purchase Date
we refer to as the Additional Accelerated Purchase Measurement Period; and |
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300%
of the number of Purchase Shares directed by the Company to be purchased by Lincoln Park pursuant to the Regular Purchase Notice
for the corresponding Regular Purchase to the Additional Accelerated Purchase effected on such same Additional Accelerated Purchase
Date (subject to the Purchase Share limitations, an amount equal to (A) the Additional Accelerated Purchase Share Percentage multiplied
by (B) the total number (or volume) of shares of Common Stock traded on the Principal Market during the period on the applicable
Additional Accelerated Purchase date beginning at the Additional Accelerated Purchase Commencement Time for such Additional Accelerated
Purchase and ending at the Additional Accelerated Purchase Termination Time for such Additional Accelerated Purchase. |
The
purchase price per share for the shares subject to an Additional Accelerated Purchase will be equal to 94% of the lower of:
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the
volume weighted average price of our common stock during the applicable Additional Accelerated Purchase Measurement Period for such
Additional Accelerated Purchase; and |
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the
closing sale price of our common stock on the applicable same Accelerated Purchase Date. |
We
may, in our sole discretion, submit multiple Additional Accelerated Purchase notices to Lincoln Park prior to 1:00 p.m., Eastern Time,
on a single Accelerated Purchase Date, again provided all shares of common stock subject to all prior Regular Purchases, Accelerated
Purchases and Additional Accelerated Purchases, including those prior Accelerated Purchases and Additional Accelerated Purchases effected
on the same Accelerated Purchase Date as the applicable Additional Accelerated Purchase have been properly delivered to Lincoln Park
in accordance with the Purchase Agreement prior to such time.
In
the case of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases, the purchase price per share will be equitably
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring
during the business days used to compute the purchase price.
Other
than as described above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the
timing and amount of any sales of our common stock to Lincoln Park.
Minimum
Share Price
Under
the Purchase Agreement, we and Lincoln Park may not effect any sales of shares of our common stock under the Purchase Agreement on any
purchase date that the closing sale price of our common stock is less than the floor price of $0.10 per share of common stock, which
will be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction.
Events
of Default
The
events of default under the Purchase Agreement include the following:
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the
effectiveness of the registration statement of which this prospectus forms a part lapses for any reason (including, without limitation,
the issuance of a stop order), or any required prospectus are unavailable for the resale by Lincoln Park of our common stock offered
hereby, and such lapse or unavailability continues for a period of 10 consecutive business days or for more than an aggregate of
30 business days in any 365-day period; |
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suspension
by our principal market of our common stock from trading for a period of one business day; |
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the
delisting of our common stock from Nasdaq, our principal market, provided our common stock is not immediately thereafter trading
on the New York Stock Exchange, Nasdaq, the Nasdaq Global Market, the Nasdaq Global Select Market, the NYSE American, the NYSE Arca,
or the OTCQX Best Market or the OTCQB Venture Market operated by OTC Markets Group Inc. (or any nationally recognized successor thereto); |
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the
failure of our transfer agent to issue to Lincoln Park shares of our common stock within two business days after the applicable date
on which Lincoln Park is entitled to receive such shares of our common stock; |
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any
breach of the representations or warranties or covenants contained in the Purchase Agreement or Registration Rights Agreement that
has or could have a material adverse effect on us and, in the case of a breach of a covenant that is reasonably curable, that is
not cured within five business days; |
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any
voluntary or involuntary participation or threatened participation in insolvency or bankruptcy proceedings by or against us; or |
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if
at any time we are not eligible to transfer our common stock electronically. |
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In
addition to any other rights and remedies under applicable law and the Purchase Agreement, so long as (i) an Event of Default has occurred
and is continuing, or if any event that, after notice and/or lapse of time, would reasonably be expected to become an Event of Default,
has occurred and is continuing or (ii) if at any time after the Commencement Date, the Stockholder Approved Exchange Cap is reached
(to the extent the Stockholder Approved Exchange Cap is applicable pursuant to Section 2(d) hereof), the Company shall not deliver
to Lincoln Park any Regular Purchase Notice, Accelerated Purchase Notice or Additional Accelerated Purchase Notice.
Our
Termination Rights
We
have the unconditional right, at any time, for any reason and without any payment or liability to us, to terminate the Purchase Agreement
upon one business day’s prior written notice to Lincoln Park. In the event of any voluntary or involuntary bankruptcy proceedings
by or against the Company, the Purchase Agreement would automatically terminate without any action of the Company or Lincoln Park. No
termination of the Purchase Agreement will be effective during the pendency of any Regular Purchase, Accelerated Purchase or Additional
Accelerated Purchase that has not then fully settled in accordance with the Purchase Agreement.
No
Short-Selling or Hedging by Lincoln Park
Lincoln
Park has represented to us that at no time prior to the time of execution of the Purchase Agreement has Lincoln Park or its agents, representatives
or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule
200 of Regulation SHO under the Exchange Act) of our common stock or any hedging transaction, which establishes a net short position
with respect to our Common Stock. Lincoln Park agreed that during the term of the Purchase Agreement, it, its agents, representatives
or affiliates will not enter into or effect, directly or indirectly, any of the foregoing transactions.
Prohibitions
on Certain Transactions
There
are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase
Agreement or Registration Rights Agreement, except the Company is prohibited (with certain specified exceptions set forth in the Purchase
Agreement) from effecting or entering into an agreement to effect an “equity line of credit” or other continuous offering
or similar offering in which the Company may issue and sell common stock, from time to time over a certain period of time, at future
determined prices based on the market prices of the common stock at the time of each such issuance and sale.
Effect
of Performance of the Purchase Agreement on Our Stockholders
All
of the shares of our common stock being registered for resale hereunder which have been or may be issued or sold by us to Lincoln Park
under the Purchase Agreement are expected to be freely tradable. It is anticipated that shares registered in this offering will be sold
from time to time over a period of up to 24-months commencing on the date that the registration statement including this prospectus becomes
effective. The sale by Lincoln Park of a significant amount of shares of our common stock registered in this offering at any given time
could cause the market price of our common stock to decline and to be highly volatile. Sales of our common stock to Lincoln Park, if
any, will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Lincoln Park all,
some or none of the additional shares of our common stock that may be available for us to sell pursuant to the Purchase Agreement. If
and when we do sell additional shares of our common stock to Lincoln Park, after Lincoln Park has acquired the shares of our common stock,
Lincoln Park may resell all, some or none of those shares of our common stock at any time or from time to time in its discretion. Therefore,
sales to Lincoln Park by us under the Purchase Agreement may result in substantial dilution to the interests of other holders of our
common stock. In addition, if we sell a substantial number of shares of our common stock to Lincoln Park under the Purchase Agreement,
or if investors expect that we will do so, the actual sales of shares of our common stock or the mere existence of our arrangement with
Lincoln Park may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that
we might otherwise wish to effect such sales. However, we have the right to control the timing and amount of any additional sales of
our common stock to Lincoln Park and the Purchase Agreement may be terminated by us at any time at our discretion without any cost to
us.
Pursuant
to the terms of the Purchase Agreement, from and after commencement, we have the right, but not the obligation, from time to time to
direct Lincoln Park to purchase up to $10.0 million of our common stock. Depending on the price per share at which we sell our common
stock to Lincoln Park pursuant to the Purchase Agreement, we may need to sell to Lincoln Park under the Purchase Agreement more shares
of our common stock than are being offered under this prospectus in order to receive aggregate gross proceeds equal to the $10.0 million
total commitment available to us under the Purchase Agreement. If we choose to do so, we must first register for resale under the Securities
Act such additional shares of our common stock, which could cause additional substantial dilution to our stockholders. The number of
shares of our common stock ultimately offered for resale by Lincoln Park under this prospectus is dependent upon the number of shares
of our common stock we direct Lincoln Park to purchase under the Purchase Agreement.
The
following table sets forth the amount of gross proceeds we would receive from Lincoln Park from our sale of common stock to Lincoln Park
under the Purchase Agreement at varying purchase prices:
| Assumed Average Purchase Price Per Share | | |
Number of Registered Shares of our Common Stock to be Issued if Full Purchase(1) | | |
Percentage of Outstanding Shares of our Common Stock After Giving Effect to the Issuance to Lincoln Park(2) | | |
Gross Proceeds from the Sale of Shares of our Common Stock to Lincoln Park Under the Purchase Agreement(1) | |
| $ | 1.00 | | |
| 1,140,477 |
| |
| 32.94 | % | |
$ | 1,140,477 | |
| $ | 1.48 | (3) | |
| 1,140,477 |
| |
| 32.94 | % | |
$ | 1,687,905 | |
| $ | 1.50 | | |
| 1,140,477 |
| |
| 32.94 | % | |
$ | 1,710,716 | |
| $ | 2.00 | | |
| 1,140,477 |
| |
| 32.94 | % | |
$ | 2,280,954 | |
| $ | 2.50 | | |
| 1,140,477 |
| |
| 32.94 | % | |
$ | 2,851,193 | |
| $ | 3.00 | | |
| 1,140,477 |
| |
| 32.94 | % | |
$ | 3,421,431 | |
| (1) |
Although
the Purchase Agreement provides that we may sell up to $10.0 million of our common stock to Lincoln Park, we are only registering
1,279,880 shares of our common stock for resale under this prospectus, including 139,403 Commitment Shares that we have already issued
to Lincoln Park as a fee for making its irrevocable commitment to purchase our common stock under the Purchase Agreement, which may
or may not cover all the shares of our common stock we ultimately sell to Lincoln Park under the Purchase Agreement, depending on
the purchase price per share. |
| (2) |
The
denominator is based on 3,461,792 shares of our common stock outstanding as of November 30, 2023 (including the 139,403 Commitment
Shares), adjusted to include the number of shares of our common stock set forth in the adjacent column which we would have sold to
Lincoln Park, assuming the purchase price in the adjacent column. The numerator is based on the number of shares of our common stock
issuable under the Purchase Agreement at the corresponding assumed purchase price set forth in the adjacent column, without giving
effect to the Beneficial Ownership Cap. |
| (3) |
The
closing sale price per share of our common stock on November 30, 2023. |
USE
OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold from time to time by Lincoln Park. We will receive no proceeds
from the sale of shares of common stock by Lincoln Park in this offering. We may receive up to $10.0 million in gross proceeds under
the Purchase Agreement from any sales we make to Lincoln Park pursuant to the Purchase Agreement after the date of this prospectus. We
estimate that the net proceeds to us from the sale of our common stock to Lincoln Park pursuant to the Purchase Agreement would be up
to approximately $9.9 million over an approximately 24-month period, assuming that we sell the full amount of our common stock that we
have the right, but not the obligation, to sell to Lincoln Park under the Purchase Agreement, and after other estimated fees and expenses.
See “Plan of Distribution” elsewhere in this prospectus for more information.
We
currently expect to use the net proceeds, if any, from the sale of Common Stock offered hereby for general corporate purposes, which
may include funding research and development, increasing working capital, reducing indebtedness, acquisitions or investments in businesses,
products or technologies that are complementary to their own, and capital expenditures. The amounts and timing of these expenditures
will depend on a number of factors, such as the timing and progress of our research and development efforts, regulatory actions affecting
our product candidates and our business, technological advances and the competitive environment for our product candidates. As we are
unable to predict the timing or amount of potential issuances of all of the additional shares issuable to the Purchase Agreement, we
cannot specify with certainty all of the particular uses for the net proceeds that we will have from the sale of such additional shares.
Accordingly, our management will have broad discretion in the application of the net proceeds. We may also use a portion of the net proceeds
to acquire or invest in complementary businesses, technologies, product candidates or other intellectual property, although we have no
present commitments or agreements to do so. We may use the proceeds for purposes that are not contemplated at the time of this offering.
Pending use of the net proceeds as described above, we expect to invest the net proceeds in short- and intermediate-term, interest-bearing
obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. It is
possible that no additional shares will be issued under the Purchase Agreement.
DILUTION
The
sale of common stock to Lincoln Park pursuant to the Purchase Agreement will have a dilutive impact on our stockholders. In addition,
the lower the price of our common stock is at the time we exercise our right to sell shares to Lincoln Park, the more shares of our common
stock we will issue to raise our desired amount of proceeds from the sale, and the greater the dilution to our existing shareholders.
The
price that Lincoln Park will pay for our common stock to be resold pursuant to this prospectus will depend upon the timing of sales and
will fluctuate based on the trading price of common stock.
As
of September 30, 2023, we had a net tangible book value of $2,182,526, or $1.00 per share of common stock. Our net
tangible book value per share represents total tangible assets less total liabilities, divided by the number of shares of our common
stock outstanding as of September 30, 2023.
After
giving effect to (i) the sale of 1,140,477 shares of common stock to Lincoln Park pursuant to the Purchase Agreement at an assumed price
of $1.48 per share, the closing price of our common stock on Nasdaq on November 30, 2023, (ii) the issuance of 139,403
Commitment Shares and (iii) deducting estimated offering expenses of $115,000 payable by us, and without giving effect to the Beneficial
Ownership Cap under the Purchase Agreement, our as adjusted net tangible book value as of September 30, 2023, would have been
approximately $3,755,432, or $1.08 per share. This represents an immediate increase in net tangible book value of
$0.08 per share to existing stockholders and an immediate dilution of $0.40 per share to new investors.
The
following table illustrates this dilution on a per share basis:
| Assumed public offering price per share | |
| | | |
$ | 1.48 | |
| Net tangible book value per share of common stock as of September 30, 2023 | |
$ | 1.00 | | |
| | |
| Increase in net tangible book value per share attributable to this offering | |
$ | 0.08 | | |
| | |
| As adjusted, net tangible book value per share after this offering | |
| | | |
$ | 1.08 | |
| Dilution per share to new investors purchasing shares in this offering | |
| | | |
$ | 0.40 | |
The
foregoing table is based on 2,181,912 shares of our Common Stock outstanding as of September 30, 2023, and excludes, as
of such date, the following:
| ● | 31,852
shares
of our Common Stock issuable upon exercise of outstanding options granted under our equity
incentive plans at a weighted average exercise price of $53.18 per share; |
| ● | 60,637
shares
of our Common Stock available for issuance or future grant pursuant to our equity incentive
plan; |
| ● | 169,098
shares
of our Common Stock issuable upon vesting of restricted stock units inclusive of 20,847
previously vested and unissued units, granted under
our equity incentive plans; and |
| ● | 609,893
shares
of our Common Stock issuable upon exercise of outstanding warrants at a weighted average
exercise price of $50.46 per share and 1,070,000 shares of our Common Stock issuable
upon exercise of outstanding investment options at a weighted average exercise price of $7.93
per share. |
SELLING
STOCKHOLDER
This
prospectus relates to the possible resale by the selling stockholder, Lincoln Park, of shares of our common stock that have been and
may be issued to Lincoln Park pursuant to the Purchase Agreement. We are filing the registration statement of which this prospectus is
a part pursuant to the provisions of the Registration Rights Agreements, which we entered into with Lincoln Park on November 3,
2023 concurrently with our execution of the Purchase Agreement, in which we agreed to provide certain registration rights with respect
to sales by Lincoln Park of the shares of our common stock that have been and may be issued to Lincoln Park under the Purchase Agreement.
Lincoln
Park, as the selling stockholder, may, from time to time, offer and sell pursuant to this prospectus up to 1,279,880 shares of our
common stock that we have issued or may issue to Lincoln Park (including the Commitment Shares). The selling stockholder may
sell some, all or none of the shares of common stock. We do not know how long the selling stockholder will hold the shares of our
common stock before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholder
regarding the sale of any of the shares of common stock. See “Plan of Distribution.”
The
table below sets forth, to our knowledge, information concerning the beneficial ownership of shares of our common stock by the selling
stockholder as of November 30, 2023. The percentages of shares owned before and after the offering are based on 2,321,315 shares
of common stock outstanding as of November 30, 2023, which includes the 139,403 Commitment Shares. The information in the table
below with respect to the selling stockholder has been obtained from the selling stockholder.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares. Unless
otherwise indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their
shares of common stock. The inclusion of any shares in this table does not constitute an admission of beneficial ownership for the person
named below.
Throughout
this prospectus, when we refer to the shares of common stock being offered for resale by the selling stockholder through this prospectus,
we are referring to the shares of common stock that have been and may be issued and sold by us to Lincoln Park pursuant to the Purchase
Agreement, unless otherwise indicated.
| Name of Selling Stockholder | |
Number of Shares of common stock Owned Prior to Offering(2) | | |
Maximum Number of Shares of common stock to be Offered Pursuant to this Prospectus(3) | | |
Number of Shares of common stock Owned After Offering(4) | |
| | |
Number | | |
Percent | | |
| | |
Number | | |
Percent | |
| Lincoln Park Capital Fund, LLC(1) | |
| 139,403 | | |
| 6.0 | % | |
| 1,279,880 | | |
| 1,279,880 | | |
| 37.0 | % |
(1)
Josh Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, the manager of Lincoln Park Capital Fund, LLC,
are deemed to be beneficial owners of all of the shares of common stock owned directly by Lincoln Park Capital Fund, LLC. Messrs. Cope
and Scheinfeld have shared voting and investment power over the shares of common stock being offered under the registration statement
filed with the SEC in connection with the transactions contemplated under the Purchase Agreement and the Registration Rights Agreement.
Neither Lincoln Park Capital, LLC nor Lincoln Park Capital Fund, LLC is a licensed broker dealer or an affiliate of a licensed broker
dealer.
(2)
Represents the 139,403 Commitment Shares already issued to Lincoln Park. In accordance with Rule 13d-3(d) under the Exchange Act, we
have excluded from the number of shares of our common stock beneficially owned prior to the offering all of the 1,140,477 shares of our
common stock that we may issue and sell to Lincoln Park pursuant to the Purchase Agreement from and after commencement that are being
registered for resale under the registration statement that includes this prospectus, because the issuance and sale of such shares to
Lincoln Park under the Purchase Agreement is solely at our discretion and is subject to certain conditions, the satisfaction of all of
which are outside of Lincoln Park’s control, including the registration statement that includes this prospectus becoming and remaining
effective under the Securities Act. Furthermore, under the terms of the Purchase Agreement, issuances and sales of shares of our common
stock to Lincoln Park under the Purchase Agreement are subject to certain limitations on the amounts we may sell to Lincoln Park at any
time, including the Beneficial Ownership Cap.
(3)
Although the Purchase Agreement provides that we may sell up to $10,000,000 of our common stock to Lincoln Park, we are only registering
1,279,880 shares of our common stock for resale under this prospectus, including the 139,403 Commitment Shares. Therefore, only 1,140,477
of such shares represent shares that we may issue and sell to Lincoln Park for cash consideration in purchases under the Purchase Agreement
from time to time, at our sole discretion, during the 24-month period commencing on the Commencement Date. Depending on the price per
share at which we sell our common stock to Lincoln Park pursuant to the Purchase Agreement, we may need to sell to Lincoln Park under
the Purchase Agreement more shares of our common stock than are offered under this prospectus in order to receive aggregate gross proceeds
equal to the full $10.0 million available to us under the Purchase Agreement. If we choose to do so, we must first register for resale
under the Securities Act such additional shares. The number of shares ultimately offered for resale by Lincoln Park is dependent upon
the number of shares we sell to Lincoln Park under the Purchase Agreement. Additionally, in no event may
we issue or sell to Lincoln Park under the Purchase Agreement shares of our common stock in excess of 7,692,308 shares (including
the Commitment Shares), which represents the amount approved by our stockholders at the Company’s Annual Meeting of Stockholders
on November 2, 2023, pursuant to Nasdaq Marketplace Rules 5635(a), (b), and (d), which limitation we refer to as the Stockholder Approved
Exchange Cap, unless we obtain further stockholder approval to issue shares of our common stock in excess of the Stockholder Approved
Exchange Cap.
(4)
Assumes the sale of all shares of our common stock registered for resale by the selling stockholder pursuant to the registration statement
that includes this prospectus, although the selling stockholder is under no obligation known to us to sell any shares of common stock
at any particular time.
DESCRIPTION
OF SECURITIES
The
following description summarizes the most important terms of our securities. Because it is only a summary, it does not contain all the
information that may be important to you. For a complete description, you should refer to our amended and restated certificate of incorporation
and restated bylaws, each as amended, copies of which are filed as exhibits to the registration statement of which this prospectus forms
a part, which are incorporated by reference herein.
Capital
Stock
Enveric
has authorized 120,000,000 shares of capital stock, par value $0.01 per share, of which 100,000,000 are shares of common stock and 20,000,000
are shares of “blank check” preferred stock. As of November 30, 2023, there were 2,181,912 shares of Enveric common
stock issued and outstanding, excluding the Commitment Shares, no shares of Series B preferred stock issued and outstanding, 31,883 shares
of our Common Stock issuable upon exercise of outstanding options granted under our equity incentive plans at a weighted average exercise
price of $53.13 per share, 609,892 shares of common stock issuable upon exercise of warrants at a weighted average exercise price of
$50.46 per share, and 1,070,000 shares of common stock issuable upon exercise of preferred investment options at a weighted average exercise
price of $7.93 per share. Each of the warrants and the preferred investment options are exercisable for a period of five one and half
years from July 26, 2022. The authorized and unissued shares of common stock and the authorized and undesignated shares of preferred
stock are available for issuance without further action by our stockholders, unless such action is required by applicable law or the
rules of any stock exchange on which our securities may be listed. Unless approval of our stockholders is so required, our board of directors
does not intend to seek stockholder approval for the issuance and sale of our common stock or preferred stock.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and have no cumulative
voting rights. Holders of our common stock are entitled to receive ratably dividends as may be declared by our board of directors out
of funds legally available for that purpose, subject to any preferential dividend or other rights of any then outstanding preferred stock.
We have never paid cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future but intend
to retain our capital resources for reinvestment in our business. Any future disposition of dividends will be at the discretion of our
board of directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements,
and other factors.
Holders
of our common stock do not have preemptive or conversion rights or other subscription rights. Upon liquidation, dissolution or winding-up,
holders of our common stock are entitled to share in all assets remaining after payment of all liabilities and the liquidation preferences
of any of our outstanding shares of preferred stock. The rights, preferences and privileges of holders of common stock are subject to
and may be adversely affected by the rights of the holders of shares of any series of our preferred stock that is currently outstanding
or that we may designate and issue in the future.
Except
as otherwise provided by law, our amended and restated certificate of incorporation or our amended and restated bylaws, each as amended,
in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in
person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. In addition,
except as otherwise provided by law, our amended and restated certificate of incorporation, as amended, or our amended and restated bylaws,
directors are elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled
to vote on the election of directors.
Preferred
Stock
Holders
of our Series B preferred stock are not entitled to voting unless required by applicable law. Each share of Series B preferred stock
will be convertible into one share of common stock (subject to adjustment) at any time at the option of the holders, provided that each
holder would be prohibited from converting Series B preferred stock into shares of common stock if, as a result of such conversion, any
such holder, together with its affiliates, would own more than 9.99% of the total number of shares of common stock then issued and outstanding.
This limitation may be waived with respect to a holder upon such holder’s provision of not less than 61 days’ prior written
notice to the Company.
Shares
of Series B preferred stock are not entitled to receive any dividends, unless and until specifically declared by the board of directors.
However, holders of Series B preferred stock are entitled to receive dividends on shares of Series B preferred stock equal (on an as-if-converted-to-common-stock
basis) to and in the same form as dividends actually paid on shares of common stock when such dividends are specifically declared by
the board of directors. The Company will have no right to require a holder to surrender its Series B preferred stock for redemption.
Shares of Series B preferred stock will not otherwise be entitled to any redemption rights, or mandatory sinking fund or analogous fund
provisions.
Transfer
Agent and Registrar
The
Transfer Agent and Registrar for our common stock is Equiniti Trust Company.
Anti-Takeover
Effects of Certain Provisions of Delaware Law, our Certificate of Incorporation and Bylaws
Delaware
Law
We
are subject to Section 203 of the DGCL. Section 203 generally prohibits a public Delaware corporation from engaging in a “business
combination” with an “interested stockholder” for a period of three years after the date of the transaction in which
the person became an interested stockholder, unless:
| |
● |
prior
to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder; |
| |
|
|
| |
● |
Upon
consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes
of determining the number of shares outstanding (i) shares owned by persons who are directors and also officers and (ii) shares owned
by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer; or |
| |
|
|
| |
● |
on
or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder. |
Section
203 defines a business combination to include:
| |
● |
any
merger or consolidation involving the corporation and the interested stockholder; |
| |
|
|
| |
● |
any
sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; |
| |
|
|
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● |
subject
to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the
interested stockholder; or |
| |
|
|
| |
● |
the
receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided
by or through the corporation. |
In
general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with, or controlling, or controlled by, the entity or person. The
term “owner” is broadly defined to include any person that, individually, with or through that person’s affiliates
or associates, among other things, beneficially owns the stock, or has the right to acquire the stock, whether or not the right is immediately
exercisable, under any agreement or understanding or upon the exercise of warrants or options or otherwise or has the right to vote the
stock under any agreement or understanding, or has an agreement or understanding with the beneficial owner of the stock for the purpose
of acquiring, holding, voting or disposing of the stock.
The
restrictions in Section 203 do not apply to corporations that have elected, in the manner provided in Section 203, not to be subject
to Section 203 of the DGCL or, with certain exceptions, which do not have a class of voting stock that is listed on a national securities
exchange or held of record by more than 2,000 stockholders. Our amended and restated certificate of incorporation, as amended, and amended
and restated bylaws do not opt out of Section 203.
Section
203 could delay or prohibit mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage
attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above
the prevailing market price.
Certificate
of Incorporation and Bylaws
Provisions
of our amended and restated certificate of incorporation, as amended, and amended and restated bylaws, as amended, may delay or discourage
transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders
might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests.
Therefore, these provisions could adversely affect the price of our common stock. Among other things, our amended and restated certificate
of incorporation, as amended, and amended and restated bylaws, as amended:
| |
● |
permit
our board of directors to issue up to 20,000,000 shares of preferred stock, without further action by the stockholders, with any
rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change in control; |
| |
|
|
| |
● |
provide
that the authorized number of directors may be changed only by a resolution adopted by the entire board of directors; |
| |
|
|
| |
● |
do
not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to
vote in any election of directors to elect all of the directors standing for election, if they should so choose); and |
| |
● |
provide
advance notice provisions with which a stockholder who wishes to nominate a director or propose other business to be considered at
a stockholder meeting must comply. |
Potential
Effects of Authorized but Unissued Stock
We
have shares of common stock and preferred stock available for future issuance without stockholder approval. We may utilize these additional
shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions
or payment as a dividend on the capital stock.
The
existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons friendly
to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to
obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of the
Company’s management. In addition, our board of directors has the discretion to determine designations, rights, preferences, privileges
and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each
series of preferred stock, all to the fullest extent permissible under the DGCL and subject to any limitations set forth in our amended
and restated certificate of incorporation, as amended. The purpose of authorizing our board of directors to issue preferred stock and
to determine the rights and preferences applicable to such preferred stock is to eliminate delays associated with a stockholder vote
on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible financings,
acquisitions and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage
a third party from acquiring, a majority of our outstanding voting stock.
PLAN
OF DISTRIBUTION
The
shares of our common stock offered by this prospectus are being offered by the selling stockholder, Lincoln Park Capital Fund, LLC. The
shares may be sold or distributed from time to time by the selling stockholder directly to one or more purchasers or through brokers,
dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing
market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of our common stock offered by this prospectus
could be effected in one or more of the following methods:
| |
● |
ordinary
brokers’ transactions; |
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|
|
| |
● |
transactions
involving cross or block trades; |
| |
|
|
| |
● |
through
brokers, dealers, or underwriters who may act solely as agents; |
| |
|
|
| |
● |
“at
the market” into an existing market for the shares of our common stock; |
| |
|
|
| |
● |
in
other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through
agents; |
| |
|
|
| |
● |
in
privately negotiated transactions; or |
| |
|
|
| |
● |
any
combination of the foregoing. |
In
order to comply with the securities laws of certain states, if applicable, the shares of our common stock offered by this prospectus
may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares of our common stock offered
by this prospectus may not be sold unless they have been registered or qualified for sale in the state or an exemption from the state’s
registration or qualification requirement is available and complied with.
Lincoln
Park is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.
Lincoln
Park has informed us that it intends to use an unaffiliated broker-dealer to effectuate all sales, if any, of our common stock that it
has acquired and may in the future acquire from us pursuant to the Purchase Agreement. Such sales will be made at prices and at terms
then prevailing or at prices related to the then current market price. Each such unaffiliated broker-dealer will be an underwriter within
the meaning of Section 2(a)(11) of the Securities Act. Lincoln Park has informed us that each such broker-dealer will receive commissions
from Lincoln Park that will not exceed customary brokerage commissions.
Brokers,
dealers, underwriters or agents participating in the distribution of the shares of our common stock offered by this prospectus may receive
compensation in the form of commissions, discounts, or concessions from the selling stockholder and/or the purchasers, for whom the broker-dealers
may act as agent. The compensation paid to any such particular broker-dealer may be less than or in excess of customary commissions.
Neither we nor Lincoln Park can presently estimate the amount of compensation that any agent will receive from the selling stockholder
or from any purchasers of shares of our common stock sold by Lincoln Park.
We
know of no existing arrangements between Lincoln Park or any other stockholder, broker, dealer, underwriter or agent relating to the
sale or distribution of the shares of our common stock offered by this prospectus.
We
may from time to time file with the SEC one or more supplements to this prospectus or amendments to the registration statement that includes
this prospectus to amend, supplement or update information contained in this prospectus, including, if and when required under the Securities
Act, to disclose certain information relating to a particular sale of shares of our common stock offered by this prospectus by the selling
stockholder, including the names of any brokers, dealers, underwriters or agents participating in the distribution of such shares of
our common stock by the selling stockholder, any compensation paid by Lincoln Park to any such brokers, dealers, underwriters or agents,
and any other required information.
We
will pay the expenses incident to the registration under the Securities Act of the offer and sale of the shares of our common stock included
in this prospectus by Lincoln Park. We estimate that the total expenses for the offering will be approximately $115,000. We have agreed
to indemnify Lincoln Park and certain other persons against certain liabilities in connection with the offering of shares of our common
stock offered by this prospectus, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute
amounts required to be paid in respect of such liabilities. Lincoln Park has agreed to indemnify us against liabilities under the Securities
Act that may arise from certain written information furnished to us by Lincoln Park specifically for use in this prospectus or, if such
indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.
Lincoln
Park has represented to us that at no time prior to the Purchase Agreement has Lincoln Park or its agents, representatives or affiliates
engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation
SHO of the Exchange Act) of our common stock or any hedging transaction, which establishes a net short position with respect to our common
stock. Lincoln Park agreed that during the term of the Purchase Agreement, it, its agents, representatives or affiliates will not enter
into or effect, directly or indirectly, any of the foregoing transactions.
We
have advised Lincoln Park that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions,
Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in
the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the
subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order
to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability
of the securities offered by this prospectus.
This
offering will terminate on the earlier of (i) the first day of the month immediately following the twenty-four (24) month anniversary
of the Commencement Date, and (ii) the date that all shares offered by this prospectus have been sold by Lincoln Park.
Our
common stock is listed on Nasdaq under the symbol “ENVB”.
LEGAL
MATTERS
The
validity of the shares of common stock offered by this prospectus will be passed upon for us by Dickinson Wright PLLC, Phoenix, Arizona.
EXPERTS
The
consolidated financial statements as of and for the year ended December 31, 2022 incorporated by reference in this prospectus have been
audited by Marcum LLP, an independent registered public accounting firm, as stated in their report (the report on the consolidated financial
statements contains an explanatory paragraph regarding the Company’s ability to continue as a going concern). Such financial statements
are incorporated by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The
consolidated financial statements as of and for the year ended December 31, 2021 incorporated by reference in this prospectus have been
audited by Friedman LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are incorporated
by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
following documents filed with the SEC are incorporated by reference into this prospectus:
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● |
our
Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 31, 2023 (“Annual Report”), and an amendment
to the Annual Report filed on June 9, 2023; |
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|
|
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● |
our
Quarterly Reports on Form 10-Q for the quarters ended March
31, 2023, June
30, 2023, and September 30, 2023, filed with the SEC on May 15, 2023, August 11, 2023, and November 13, 2023,
respectively; |
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|
|
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● |
our
Current Reports on Form 8-K, filed on February
28, 2023, May
24, 2023, September
1, 2023, November
2, 2023, November
6, 2023, and November
22, 2023, (other than any portions thereof deemed furnished and not filed); and |
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the
description of our common stock contained in our Form 8-A12B, filed with the Commission on November 9, 2017 (File No. 001-38286),
amended and supplemented by the description of our common stock contained in Exhibit 4.1 to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023, and any amendment or report filed with the Commission
for purposes of updating such description. |
We
also incorporate by reference any future filings (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits
filed on such form that are related to such items unless such Form 8-K expressly provides to the contrary) made with the SEC pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including those made (i) on or after the date of the initial filing of the
registration statement of which this prospectus forms a part and prior to effectiveness of such registration statement, and (ii) on or
after the date of this prospectus but prior to the termination of the offering (i.e., until the earlier of the date on which all of the
securities registered hereunder have been sold or the registration statement of which this prospectus forms a part has been withdrawn).
Information in such future filings updates and supplements the information provided in this prospectus. Any statements in any such future
filings will automatically be deemed to modify and supersede any information in any document we previously filed with the SEC that is
incorporated or deemed to be incorporated herein by reference to the extent that statements in the later filed document modify or replace
such earlier statements.
We
will furnish without charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request,
a copy of any or all of the documents incorporated by reference into this prospectus but not delivered with the prospectus, including
exhibits that are specifically incorporated by reference into such documents. You should direct any requests for documents to:
Enveric
Biosciences, Inc.
4851
Tamiami Trail N,
Suite
200 Naples, FL
Telephone
(239) 302-1707
Attention:
Corporate Secretary
You
may also access these documents, free of charge, on the SEC’s website at www.sec.gov or on our website at https://www.enveric.com/investors/filings/.
The information contained in, or that can be accessed through, our website is not incorporated by reference in, and is not part of, this
prospectus or any accompanying prospectus supplement.
In
accordance with Rule 412 of the Securities Act, any statement contained in a document incorporated by reference herein shall be deemed
modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such statement.
You
should rely only on information contained in, or incorporated by reference into, this prospectus and any prospectus supplement. We have
not authorized anyone to provide you with information different from that contained in this prospectus or incorporated by reference into
this prospectus. We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such an
offer or solicitation.
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our
directors and officers are indemnified to the fullest extent permitted under Delaware law. We also maintain insurance which protects
our officers and directors against any liabilities incurred in connection with their service in such a capacity.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons
pursuant to the foregoing, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by us of expenses incurred or paid by a director, officer or controlling person of ours in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities
we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the
registration statement. You should rely only on the information contained in this prospectus or incorporated by reference into this prospectus.
We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should assume that the information contained in this prospectus, or any document incorporated by
reference in this prospectus, is accurate only as of the date of those respective documents, regardless of the time of delivery of this
prospectus or any sale of our securities.
We
are subject to the informational requirements of the Exchange Act and in accordance therewith we file annual, quarterly, and other reports,
proxy statements and other information with the Commission under the Exchange Act. Such reports, proxy statements and other information,
including the Registration Statement, and exhibits and schedules thereto, are available to the public through the Commission’s
website at www.sec.gov.
We
make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended, as soon as reasonably practicable after we electronically file such material with or otherwise furnish it to the Commission.
The registration statement and the documents referred to under “Incorporation of Certain Information by Reference”
are also available on our website enveric.com.
We
have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be a part of
this prospectus.
1,279,880
Shares of common stock
PROSPECTUS
December
6, 2023
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