On September 1, 2023, Enveric Biosciences, Inc. (the "Company") reported to have entered into an Equity Distribution Agreement (the "Distribution Agreement"), with Canaccord Genuity LLC ("Canaccord"), pursuant to which the Company may offer and sell from time to time, through Canaccord as sales agent and/or principal, shares of common stock of the Company, par value $0.01 per share (the "Common Stock"), having an aggregate offering price of up to $10.0 million (Filing, 8-K, Enveric Biosciences, SEP 1, 2023, View Source [SID1234634836]). Due to the offering limitations applicable to the Company under General Instruction I.B.6. of Form S-3 and the Company’s public float as of September 1, 2023 and in accordance with the terms of the Distribution Agreement, the Company may offer Common Stock having an aggregate gross sales price of up to $2,392,514 pursuant to the prospectus supplement dated September 1, 2023 (the "Prospectus Supplement").
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The Common Stock will be offered and sold pursuant to an existing shelf registration statement on Form S-3 (File No. 333-257690) filed by the Company with the Securities and Exchange Commission ("SEC"), which was declared effective on July 9, 2021 by the SEC. The Prospectus Supplement relating to the offer and sale of the Common Stock pursuant to the Distribution Agreement also has been filed with the SEC.
Subject to the terms and conditions of the Distribution Agreement, Canaccord may sell the Common Stock by any method permitted by law deemed to be an "at-the-market offering" as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the "Securities Act"). Canaccord will use commercially reasonable efforts to sell the Common Stock from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company will pay Canaccord a commission equal to 3.0% of the gross sales price of the Common Stock sold through Canaccord under the Distribution Agreement and has also agreed to reimburse Canaccord for certain expenses. The Company may also sell Common Stock to Canaccord as principal for Canaccord’s own account at a price agreed upon at the time of sale. Any sale of Common Stock to Canaccord as principal would be pursuant to the terms of a separate terms agreement between the Company and Canaccord.
The Distribution Agreement contains customary representations and warranties of the parties and indemnification and contribution provisions under which the Company and Canaccord have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act. The Company expects to use the net proceeds from any sales of Common Stock under the Distribution Agreement 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 foregoing description of the Distribution Agreement is not complete and is qualified in its entirety by reference to the full text of the Distribution Agreement, a copy of which is filed herewith as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference.
A copy of the legal opinion and consent of Dickinson Wright PLLC relating to the legality of the Common Stock that may be issued pursuant to the Distribution Agreement is attached as Exhibit 5.1 to this Current Report on Form 8-K.