Enveric Biosciences prices $5 million public offering at $3.00 per share

Enveric Biosciences, Inc. priced a public offering of 1,666,666 shares of common stock, or pre-funded warrants in place of shares, at a combined public offering price of $3.00 per share, the company said in a press release dated January 30, 2025. The release expects gross proceeds of approximately $5 million before the placement agent's fees and other expenses. The prospectus puts the total public offering price at $4,999,954.27.

Warrant terms and share count

Each share or pre-funded warrant comes with a Series A warrant and a Series B warrant, each covering up to 1,666,666 shares. All of the warrants carry an exercise price of $3.00 and can be exercised immediately. The Series A warrants expire five years after issuance. The Series B warrants expire eighteen months after issuance.

The offering includes 1,229,330 shares of common stock and pre-funded warrants to purchase 437,336 shares. The prospectus says 3,770,668 shares could be issued under all the warrants and pre-funded warrants. Before the offering, 692,580 shares were outstanding. Afterward, the prospectus says, 2,359,246 would be outstanding, assuming every pre-funded warrant is exercised and no other warrant is. Directors and executive officers agreed to a 60-day lock-up after closing.

Placement agent and fees

H.C. Wainwright & Co., LLC is the exclusive placement agent. It works on a reasonable best efforts basis, does not buy the securities itself and need not sell any particular amount. The prospectus sets no minimum amount that must be raised before closing and describes no escrow, so investors could pay in while the company falls short of its goals.

Enveric agreed to pay a cash fee of 7.0% of gross proceeds and a management fee of 1.0%. The fee table puts placement agent fees at $349,999.86. The agent also receives warrants to purchase up to 116,666 shares. The prospectus does not name legal counsel for the company or for the placement agent.

Cash, going concern and the science ahead

The prospectus says cash and cash equivalents were $2.2 million as of December 31, 2024, not enough to fund planned operations without new equity. Net proceeds of approximately $4.28 million would cover capital needs for less than a year.

The auditor, Marcum LLP, issued a report dated March 25, 2024 on the 2023 financial statements. It includes an explanatory paragraph on substantial doubt about the company's ability to continue as a going concern, citing recurring losses, cash used in operations and the need to raise funds. The prospectus also cites a letter from Nasdaq's Listing Qualifications Department dated November 21, 2023.

Management has broad discretion over the proceeds, which will fund EB-003 development, working capital and general corporate purposes. The prospectus says investors will rely on management's judgment with limited information about specific uses.

Enveric describes itself as a biotechnology company developing neuroplastogen small molecules for depression, anxiety, addiction and other psychiatric disorders. Its lead molecule, EB-003, is described as a potential first-in-class neuroplastogen. The company says it is focused on advancing EB-003 toward clinical trials. The prospectus lists preclinical studies, clinical trials and FDA filings as steps still to come. The company also holds a platform it calls the Psybrary, which it plans to out-license to third parties. The release lists among its risks whether Enveric can out-license those candidates and submit its IND filing to the FDA.

The offering was expected to close on or about February 3, 2025. It would end on February 13, 2025 unless Enveric ended it earlier. The Form S-1 registration statement, File No. 333-284277, was declared effective on January 30, 2025. The stock trades on the Nasdaq Capital Market as ENVB.

Report an error

Companies in this story

ENVBEnveric Biosciences, Inc.NASDAQ · United StatesOpen the starter desk