Filed
Pursuant to Rule 424(b)(5)
Registration
Nos. 333-233260 and 333-252880
PROSPECTUS
SUPPLEMENT
(To
prospectus dated November 19, 2019)
ENVERIC
BIOSCIENCES INC.
3,007,026
Shares of Common Stock
We
are offering 3,007,026 shares of our common stock pursuant to this prospectus supplement and accompanying prospectus to certain
institutional investors. Each share of common stock is being sold at a price per share equal to $4.27.
In
a concurrent private placement, we are also selling to such investors warrants to purchase up to 1,503,513 shares of our common
stock (the “Warrants”), exercisable for one share of our common stock at an exercise price of $4.90 per share, and
exercisable immediately upon issuance with a term of five (5) years from the date of issuance. The Warrants and the shares of
our common stock issuable upon the exercise of the Warrants (the “Warrant Shares”) are being offered pursuant to the
exemptions provided in Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”) and Rule
506(b) promulgated thereunder, and they are not being offered pursuant to this prospectus supplement and the accompanying prospectus.
Palladium
Capital Group, LLC (“Palladium”) acted as an advisor in connection with this offering and is entitled to an advisory
fee equal to 8.0% of the gross proceeds raised in the offering from the sale of common stock and payment of non-accountable expenses
equal to 1.0% of the gross proceeds raised in the offering from the sale of common stock, totaling approximately $1.2 million,
and a warrant to purchase 210,492 shares of our common stock (which equals 7% of the aggregate number of shares sold in this offering)
at an exercise price of $4.90 per share (the “Palladium Warrant”). The Palladium Warrant will have terms identical
in all material respects to the Warrants.
There
is no established public trading market for the Warrants and we do not expect a market to develop. In addition, we do not intend
to list the Warrants on The Nasdaq Capital Market, any other national securities exchange or any other nationally recognized trading
system.
Our
common stock is traded on The Nasdaq Capital Market under the symbol “ENVB.” On February 8, 2021, the closing sale
price of our common stock on The Nasdaq Capital Market was $4.45 per share.
This
investment involves a high degree of risk. See “Risk Factors” on page S-9 of this prospectus supplement
and any similar section contained in the accompanying prospectus and in the documents that are incorporated by reference herein
and therein.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus supplement is truthful or complete. Any representation to the contrary is
a criminal offense.
Delivery
of the shares of common stock to investors is expected to occur on or about February 11, 2021, subject to satisfaction of customary
closing conditions.
Effective
as of 4:02 pm Eastern Time on December 30, 2020, we filed an amendment to our Amended and Restated Certificate of Incorporation
to effect a reverse stock split of the issued and outstanding shares of our common stock, at a ratio of one share for four shares.
The net result of the reverse stock split was
a 1-for-4 reverse stock split. All share and per share prices in this prospectus supplement
have been adjusted to reflect the reverse stock split.
The
date of this prospectus supplement is February 9, 2021.
TABLE
OF CONTENTS
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ABOUT
THIS PROSPECTUS SUPPLEMENT
This
document is part of the registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a
“shelf” registration process and consists of two parts. The first part is this prospectus supplement, including the
documents incorporated by reference, which describes the specific terms of this offering. The second part, the accompanying prospectus,
including the documents incorporated by reference, gives more general information, some of which may not apply to this offering.
Generally, when we refer only to the “prospectus,” we are referring to both parts combined. This prospectus supplement
may add to, update or change information in the accompanying prospectus and the documents incorporated by reference into this
prospectus supplement or the accompanying prospectus.
If
information in this prospectus supplement is inconsistent with the accompanying prospectus or with any document incorporated by
reference that was filed with the SEC before the date of this prospectus supplement, you should rely on this prospectus supplement.
This prospectus supplement, the accompanying prospectus and the documents incorporated into each by reference include important
information about us, the securities being offered and other information you should know before investing in our securities. You
should also read and consider information in the documents we have referred you to in the section of this prospectus supplement
and the accompanying prospectus entitled “Incorporation by Reference” and “Where You Can Find More Information”
as well as any free writing prospectus provided in connection with this offering.
You
should rely only on this prospectus supplement, the accompanying prospectus, and any free writing prospectus provided in connection
with this offering and the information incorporated or deemed to be incorporated by reference in this prospectus supplement and
the accompanying prospectus. We have not authorized anyone to provide you with information that is in addition to or different
from that contained or incorporated by reference in this prospectus supplement, the accompanying prospectus, and any free writing
prospectus provided in connection with this offering. If anyone provides you with different or inconsistent information, you should
not rely on it. We are not offering to sell these securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information contained or incorporated by reference in this prospectus supplement, the accompanying
prospectus, or any free writing prospectus provided in connection with this offering is accurate as of any date other than as
of the date of this prospectus supplement, the accompanying prospectus, or such free writing prospectus, as the case may be, or
in the case of the documents incorporated by reference, the date of such documents regardless of the time of delivery of this
prospectus supplement and the accompanying prospectus or any sale of our securities. Our business, financial condition, liquidity,
results of operations and prospects may have changed since those dates.
Unless
the context otherwise indicates, references in this prospectus to “Enveric”, “we”, “our”,
“us” and “the Company” refer, collectively, to Enveric Biosciences, Inc. and its subsidiaries.
No
action is being taken in any jurisdiction outside the United States to permit a public offering of the securities or possession
or distribution of this prospectus supplement, the accompanying prospectus, or any free writing prospectus provided in connection
with this offering in that jurisdiction. Persons who come into possession of this prospectus supplement, the accompanying prospectus,
or any free writing prospectus provided in connection with this offering in jurisdictions outside the United States are required
to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus supplement,
the accompanying prospectus, or any free writing prospectus provided in connection with this offering applicable to that jurisdiction.
This prospectus supplement and the accompanying prospectus do not constitute, and may not be used in connection with, an offer
to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement and the accompanying prospectus
by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and the accompanying prospectus, including the documents that we incorporate by reference herein and therein,
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations,
beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These
statements are often, but are not always, made through the use of words or phrases such as “anticipate,” “believe,”
“contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” “seek,”
“should,” “target,” “will,” “would,” and similar expressions, or the negative
of these terms, or similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties which could
cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their
entirety by reference to the factors discussed throughout this prospectus supplement and the accompanying prospectus, and in particular
those factors referenced in the sections entitled “Risk Factors.”
This
prospectus supplement and the accompanying prospectus contain forward-looking statements that are based on our management’s
belief and assumptions and on information currently available to our management. These statements relate to future events or our
future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results,
levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking statements. Numerous factors could cause our actual results to differ
materially from those described in forward-looking statements, including, among other things:
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the
impact of the novel coronavirus (COVID-19) on our ongoing and planned clinical trials;
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the
geographic, social and economic impact of COVID-19 on our ability to conduct our business and raise capital in the future
when needed;
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delays
in planned clinical trials; the ability to establish that potential products are efficacious or safe in preclinical or clinical
trials;
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the
ability to establish or maintain collaborations on the development of therapeutic candidates;
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the
ability to obtain appropriate or necessary governmental approvals to market potential products;
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the
ability to obtain future funding for developmental products and working capital and to obtain such funding on commercially
reasonable terms;
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our
ability to manufacture product candidates on a commercial scale or in collaborations with third parties; changes in the size
and nature of competitors;
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the
ability to retain key executives and scientists; and the ability to secure and enforce legal rights related to our products,
including patent protection;
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our
expected use of proceeds from this offering; and
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other
factors discussed in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference
herein and therein, including those set forth under “Risk Factors” in our Registration Statement on Form S-4 filed
with the SEC on May 28, 2020, as amended (the “Form S-4”).
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We
have included important factors in the cautionary statements included in this prospectus supplement and the accompanying prospectus
and the documents we incorporate by reference herein and therein, including from the Form S-4, particularly in the “Risk
Factors” sections of these documents, that we believe could cause actual results or events to differ materially from the
forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments we may make. No forward-looking statement is a guarantee of future performance.
You
should read this prospectus supplement and the accompanying prospectus and the documents that we incorporate by reference herein
and therein completely and with the understanding that our actual future results may be materially different from what we expect.
The forward-looking statements in this prospectus supplement and the accompanying prospectus and the documents we incorporate
by reference herein and therein represent our views as of the date of this prospectus supplement. We anticipate that subsequent
events and developments will cause our views to change. However, while we may elect to update these forward-looking statements
at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should,
therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this
prospectus supplement.
PROSPECTUS
SUPPLEMENT SUMMARY
The
following summary of our business highlights some of the information contained elsewhere in, or incorporated by reference into,
this prospectus supplement. Because this is only a summary, however, it does not contain all of the information that may be important
to you. You should carefully read this prospectus supplement and the accompanying prospectus, including the documents incorporated
by reference, which are described under “Incorporation of Certain Information by Reference” in this prospectus supplement.
You should also carefully consider the matters discussed in the section of this prospectus supplement entitled “Risk Factors”
and under similar sections of the accompanying prospectus and other periodic reports incorporated herein and therein by reference.
In
this prospectus supplement, unless the context otherwise requires, references to “we,” “us,” “our,”
“our company” and “Enveric” refer to Enveric Biosciences, Inc. and its subsidiaries. We were previously
known as AMERI Holdings, Inc. (“Ameri”). Following the completion of our offer to purchase all of the issued and outstanding
shares of Jay Pharma, Inc. on December 30, 2020, we changed the name of our company from AMERI Holdings, Inc. to Enveric Biosciences,
Inc. For more detail on the transaction with Jay Pharma, Inc. and related transactions, see section titled “Recent Development”
below.
Company
Overview
We
are an early-development-stage biosciences company that is seeking to develop innovative, evidence-based prescription products
and combination therapies containing cannabinoids to address unmet needs in cancer care. We seek to improve the lives of patients
suffering from cancer, initially by developing palliative and supportive care products for persons suffering from certain side
effects of cancer and cancer treatment such as pain or skin irritation. We currently intend to offer such palliative and supportive
care products in the United States, following approval through established regulatory pathways.
We
are also aiming to advance a pipeline of novel cannabinoid combination therapies for hard-to-treat cancers, including glioblastoma
multiforme (GBM) and several other indications which are currently being researched.
We
intend to bring together leading oncology clinicians and researchers, academic and industry partners so as to develop both external
proprietary products and a robust internal pipeline of product candidates aimed at improving quality of life and outcomes for
cancer patients. We intend to evaluate options to out-license our proprietary technology as we move along the regulatory pathway
instead of building a small targeted selling organization and will potentially utilize a hybrid approach based on the indication
and the results.
In
developing our product candidates, we intend to focus solely on cannabinoids derived from hemp and synthetic materials containing
no tetrahydrocannabinol (THC) in order to comply with U.S. federal regulations. Of the potential cannabinoids to be used in therapeutic
formulations, THC, which is responsible for the psychoactive properties of marijuana, can result in undesirable mood effects.
Cannabidiol (CBD) and cannabigerol (CBG), on the other hand, are not psychotropic and are therefore more attractive candidates
for translation into therapeutic practice. In the future, we may utilize cannabinoids that are derived from cannabis plants, which
may contain THC; however, we only intend to do so in jurisdictions where THC is legal. These product candidates will then be studied
through a typical FDA drug approval process.
Product
Candidates
Our
pipeline of product candidates and key ongoing development programs are shown in the tables below:
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Product
Candidate
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Targeted
Indications
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Partner(s)
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Status
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Expected
Next Steps
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Cannabinoid-Infused
Topical Product
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Oncology-
related skincare conditions (e.g., radiodermatitis)
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U.S.-Based
Center of Excellence
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Research
& Development / Discovery
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IND
submission; Exploratory Phase 1/2 trial with patient enrollment anticipated in the second half of 2020
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Cannabinoid
+ Chemotherapy Combination Therapy
Oral
synthetic CBD extract given alone or in combination with clomiphene, concurrently with dose-dense Temolozomide chemotherapy
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Glioblastoma
Multiforme
Recurrent
or progressive
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Dr.
Tali Siegal,
Rabin
Medical Center, Davidoff Institute of Oncology
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Research
& Development / Discovery
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IND
submission; Exploratory Phase 1/2 trial with patient enrollment anticipated during the second half of 2020
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Additional
Potential Development Programs
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Potential
Target Indications
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Cannabinoid
+ Chemotherapy Combination Therapy
Clomiphene
in combination with CBD in patients with selected locally advanced or metastatic breast cancer treated with standard adjuvant
chemotherapy regimens
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Breast
Cancer
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Recent
Developments
Closing
of the Offer
On
December 30, 2020, pursuant to the previously announced Tender Offer Support Agreement and Termination of Amalgamation Agreement
dated August 12, 2020, as amended by that certain Amendment No. 1 to the Tender Offer Support Agreement and Termination of Amalgamation
Agreement dated December 18, 2020 (as amended, the “Tender Agreement”), by and among us, Jay Pharma Inc., a Canada
corporation and a wholly owned subsidiary of the Company (“Jay Pharma”), and certain other signatories thereto, we
completed a tender offer (the “Offer”) to purchase all of the outstanding common shares of Jay. Following the effective
time of the Offer, we changed the name of our company from AMERI Holdings, Inc. to Enveric Biosciences, Inc. and effected a 1-for-4
reverse stock split of the issued and outstanding common stock. Immediately following completion of the Offer and the transactions
contemplated in the Tender Agreement, but without giving effect to the issuance of the Series B Warrants (as defined below) (i)
the former Jay Pharma equity holders (including certain investors in private placements that closed prior to the completion of
the Offer) own approximately 82.3% of the Company; (ii) former Ameri equity holders own approximately 14.5% of the Company; and
(iii) a financial advisor to Jay Pharma and Ameri owns approximately 3.2% of the Company.
The
holders of approximately 62% of outstanding shares of common stock as of January 11, 2020 are subject to lock-up/leak-out agreements
pursuant to which such stockholders have agreed, except in limited circumstances, not to sell or transfer, or engage in swap or
similar transactions with respect to, certain shares of common stock, including, as applicable, shares received in the Offer and
issuable upon exercise of certain warrants and options. The lock-up period begins at the time of the completion of the Offer and
ends on the date that is 180 days after such time. The leak-out period begins on the date that is the end of the lock-up period
and ends on a date that is 180 days after such date. During the leak-out period, such holders may only sell up to 15% of the aggregate
amount of our securities owned by such holder as of the expiration of the lock-up period per month. Notwithstanding the foregoing,
the lock-up and leak-out restrictions are subject to value and trading thresholds set forth in the lock-up/leak-out agreements
which, if met, would cause the lock-up and leak-out restrictions to expire. In addition, we may, in our discretion, waive the
lock-up and leak-out restrictions with respect to one or more stockholders at any time.
The
common stock on The Nasdaq Capital Market, previously trading through the close of business on December 30, 2020 under the ticker
symbol “AMRH,” commenced trading on The Nasdaq Capital Market, on a post-Reverse Stock Split adjusted basis, under
the ticker symbol “ENVB” on December 31, 2020.
Closing
of Spin-Off
As
previously reported, on January 10, 2020, Ameri and Ameri100 Inc. (“Private Ameri”) entered into a Share Purchase
Agreement (the “Ameri Share Purchase Agreement”) pursuant to which Ameri agreed to contribute, transfer and convey
to Private Ameri all of the issued and outstanding equity interests of the existing subsidiaries of Ameri, constituting the entire
business and operations of Ameri and its subsidiaries, and wherein Private Ameri agreed to assume the liabilities of such subsidiaries
(the “Spin-Off”).
On
December 30, 2020, pursuant to the Ameri Share Purchase Agreement, Ameri consummated the Spin-Off and all of the issued and outstanding
shares of Series A preferred stock of Ameri (the “Series A Preferred Stock”) were redeemed for an equal number of
shares of Series A preferred stock of Private Ameri (“Private Ameri Preferred Stock”). Ameri contributed, transferred
and conveyed to Private Ameri all of the issued and outstanding equity interests of the existing subsidiaries of Ameri, constituting
the entire business and operations of Ameri and its subsidiaries, and Private Ameri assumed the liabilities of such subsidiaries.
Series
B Warrants
Pursuant
to the Tender Agreement, on December 31, 2020, we issued Series B Warrants (the “Series B Warrants”) to purchase 1,791,923
shares of common stock at an exercise price of $0.01 to Alpha Capital Anstalt (“Alpha”). We are obligated, among other
things, to file a registration statement with SEC for purposes of registering the resale of the shares of common stock issuable
upon exercise of the Series B Warrants by the investors. The issuance of the Series B Warrants was exempt from the registration
requirements of the Securities Act pursuant to an exemption provided by Section 4(a)(2) thereof as a transaction by an issuer
not involving a public offering. As described below under “Letter Agreement with Alpha”, on January 12, 2021,
we have waived the lock-up restrictions on Alpha with respect to dispositions of the shares of common stock issuable upon exercise
of the Series B Warrants (the “Series B Warrant Shares”), and Alpha agreed to limit its sales of shares of our common
stock on each trading day to no more than 10% of the daily reported trading volume of common stock on the Nasdaq Stock Market
for such trading day, provided, such limitation shall terminate if the closing price of our shares of common stock on the Nasdaq
Stock Market exceeds $5.29 per share for five consecutive trading days.
Director
and Officer Resignations and Appointments
Effective
upon completion of the Offer, Srinidhi “Dev” Devanur, our former Executive Chairman and a former director of the board
of directors, Brent Kelton, our former Chief Executive Officer, Barry Kostiner, our former Chief Financial Officer, Carmo Martella,
a former director of the board of directors, Thoranath Sukumaran, a former director of the board of directors and Dimitrios Angelis,
a former director of the board of directors, all tendered their resignations from their respective positions as officers and directors
of our company.
Pursuant
to the terms of the Tender Agreement, and as disclosed in the Form S-4, the board of directors appointed David Johnson, George
Kegler, Sol Mayer and Marcus Schabacker to the board of directors at the effective time of the Offer.
Effective
upon the completion of the Offer, the board of directors appointed David Johnson as our Chief Executive Officer and Chairman,
Avani Kanubaddi as our Chief Operating Officer, John Van Buiten as our Chief Financial Officer, and Robert Wilkins as our Chief
Medical Officer.
Amended
and Restated Certificate of incorporation and Bylaws
In
connection with the Tender Agreement, we filed an Amended and Restated Certificate of Incorporation and adopted amended and restated
bylaws on December 30, 2020. For additional information regarding our organizational documents, please refer to our Current Report
on Form 8-K filed with the SEC on January 6, 2021.
Delisting
of Ameri Warrants
On
December 30, 2020, we received a written notice (the “Notice”) from Listing Qualifications Department of The Nasdaq
Stock Market LLC (“Nasdaq”) indicating that our listed warrants (the “AMRHW Warrants”) would be suspended
from listing on the Nasdaq Capital Market. A Form 25-NSE was filed with the SEC on December 30, 2020, which removed the AMRHW
Warrants from listing and registration on the Nasdaq Capital Market.
The
terms of the AMRHW Warrants are not affected by the delisting, and the AMRHW Warrants may still be exercised in accordance with
their terms to purchase common stock of the Company.
The
listing of the common stock, which is traded on the Nasdaq Capital Market under the symbol ENVB, is not affected by the delisting
of the AMRHW Warrants.
Change
in Certifying Accountant
On
January 5, 2021, our Audit Committee of the board of directors approved the dismissal of Ram Associates, CPA (“Ram”)
as our independent registered public accounting firm, effective December 31, 2020, and engaged Marcum LLP (“Marcum”)
as our independent registered public accounting firm for the year ending December 31, 2020. Prior to the completion of the Offer,
Marcum served as the independent registered public accounting firm of Jay Pharma, and we believe the change in auditors will be
more efficient for reporting purposes.
Letter
Agreement with Alpha
On
January 12, 2021 we entered into a letter agreement (the “Letter Agreement”) with Alpha. Under the Letter Agreement,
(i) we agreed to register 1,791,923 of the Series B Warrant Shares issuable upon the exercise of Series B Warrants, (ii) the Series
B Warrant Shares will not be subject to an existing lock-up agreement between us and Alpha, and Alpha will no longer be subject
to any limitations on its ability to dispose of the Series B Warrant Shares that are imposed by us to the extent permitted by
applicable rules and regulations, (iii) Alpha agreed to limit its sales of common stock on each trading day to no more than 10%
of the daily reported trading volume of common stock on the Nasdaq Stock Market for such trading day, provided, such limitation
shall terminate if the closing price of our shares of common stock on the Nasdaq Stock Market exceeds $5.29 per share for five
consecutive trading days and (iv) we will be free to waive the terms and conditions of any lock-up agreement between us and any
of the former shareholders of Jay Pharma Inc. without the consent of, or notice to, Alpha once the registration statement registering
the Series B Warrant Shares is declared effective by the SEC.
January
2021 Offering
On
January 12, 2021, we entered into a Securities Purchase Agreement (the “January 2021 Purchase Agreement”) with certain
institutional and accredited investors, pursuant to which we agreed to issue and sell in a registered direct offering an aggregate
of 1,610,679 shares of our common stock and pre-funded warrants to purchase up to 610,679 shares of common stock, at an offering
price of $4.5018 per share of common stock and $4.4918 per pre-funded warrant, for gross proceeds of approximately $10 million
before the deduction of fees and offering expenses (the “January 2021 Offering”). The pre-funded warrants have an
exercise price of $0.01 per share, and are immediately exercisable and may be exercised at any time after their original issuance
until such pre-funded warrants are exercised in full, subject to certain beneficial ownership limitations.
Pursuant
to the January 2021 Purchase Agreement, in a concurrent private placement, we issued to the purchasers, unregistered warrants
to purchase up to 1,666,019 shares of common stock. Such unregistered warrants are exercisable immediately upon issuance and terminate
five years following issuance and are exercisable at an exercise price of $4.9519 per share, subject to adjustment as set forth
therein and certain beneficial ownership limitations.
Palladium
served as an advisor in connection with the January 2021 Offering and received an advisory fee of $900,000 and an unregistered
warrant to purchase up to 155,493 shares of common stock. The terms of such warrant are identical in all material respects to
the terms of the unregistered warrants issued in such concurrent private placement.
Reverse
Stock Split
Effective
as of 4:02 pm Eastern Time on December 30, 2020, we filed an amendment to our Amended and Restated Certificate of Incorporation
to effect a reverse stock split of the issued and outstanding shares of our common stock, at a ratio of one share for four shares.
The net result of the reverse stock split was
a 1-for-4 reverse stock split. We made proportionate adjustments to the per share exercise
price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units (if any)
and warrants outstanding as of the effective times of the reverse stock split in accordance with the terms of each security based
on the split ratio. Also, we reduced the number of shares reserved for issuance under our equity compensation plans proportionately
based on the split ratios. Except for adjustments that resulted from the rounding up of fractional shares to the next whole share,
the reverse stock split affected all stockholders uniformly and did not change any stockholder’s percentage ownership interest
in our company. All share and related option and warrant information presented in this prospectus supplement have been retroactively
adjusted to reflect the reduced number of shares outstanding and the increase in share price which resulted from these actions;
however, common stock share and per share amounts in the accompanying prospectus and certain of the documents incorporated by
reference herein have not been adjusted to give effect to the reverse stock split.
Company
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. (“Ameri and Partners”), a Delaware corporation (the “2015 Merger”). As a result of the 2015 Merger,
Ameri and Partners became Ameri’s wholly owned subsidiary with Ameri and Partners’ former stockholders acquiring a
majority of the outstanding shares of Ameri common stock. The 2015 Merger was consummated under Delaware law pursuant to an Agreement
of Merger and Plan of Reorganization, dated as of May 26, 2015 (the “2015 Merger Agreement”), and in connection with
the 2015 Merger, Ameri changed its name to AMERI Holdings, Inc. Ameri does business under the brand name “Ameri100”.
Ameri Holdings, Inc., along with its eleven operating subsidiaries, provides SAP cloud, digital and enterprise services to clients
worldwide. On December 30, 2020, we completed
the Offer and changed our name to “Enveric Biosciences, Inc.” Our principal corporate office is located at Enveric
Biosciences, Inc., 4851 Tamiami Trail N, Suite 200, telephone (239) 302-1707. Our internet address is https://www.enveric.com/,
and the information included in, or linked to our website is not part of this prospectus. We have included our website address
in this prospectus solely as a textual reference.
THE
OFFERING
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Issuer
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Enveric
Biosciences, Inc.
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Common
Stock offered by us
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3,007,026
shares
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Shares
of common stock to be outstanding after this offering
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18,336,376
shares (excluding shares issuable upon the exercise of the Warrants to be issued in the concurrent private placement).
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Offering
price per share
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$4.27
per share of common stock.
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Use
of proceeds
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We
intend to use the net proceeds from this offering for working capital purposes. See “Use of Proceeds” on page
S-11.
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Concurrent
private placement of Warrants
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In
a concurrent private placement, we are selling to investors in this offering Warrants to purchase up to an additional 1,503,513
shares of our common stock. Each Warrant will be exercisable for one share of our common stock at an exercise price of $4.90
per share, will be exercisable immediately upon issuance and will have a term of five years from the date of issuance. The
Warrants and the Warrant Shares are being offered pursuant to the exemptions provided in Section 4(a)(2) under the Securities
Act and Rule 506(b) promulgated thereunder, and they are not being offered pursuant to this prospectus supplement and the
accompanying prospectus. There is no established public trading market for the Warrants and we do not expect a market to develop.
In addition, we do not intend to list the Warrants on the Nasdaq Capital Market, any other national securities exchange or
any other nationally recognized trading system.
|
|
|
|
|
|
Risk
factors
|
|
See
the “Risk Factors” section of this prospectus supplement, the Form S-4 and in the other documents incorporated
by reference in this prospectus supplement for a discussion of factors to consider before deciding to invest in our securities.
|
|
|
|
|
|
Nasdaq
Capital Market symbol
|
|
“ENVB”
|
The
number of shares of our common stock that will be outstanding immediately after this offering as shown above is based on 15,329,350
shares outstanding as of February 9, 2021. The number of shares outstanding as of February 9, 2021, as used throughout this prospectus
supplement, unless otherwise indicated, excludes:
|
|
●
|
262,500
shares of common stock issuable upon the conversion of outstanding shares of Series B Convertible Preferred Stock;
|
|
|
●
|
1,791,923
shares of common stock issuable upon the exercise of Series B Warrants;
|
|
|
|
|
|
|
●
|
806,563
shares of common stock issuable upon the exercise of stock options outstanding at a weighted average exercise price of $1.37
per share;
|
|
|
|
|
|
|
●
|
3,770,762
shares of common stock issuable upon the exercise of warrants outstanding at a weighted average exercise price of $9.25 per
share;
|
|
|
|
|
|
|
●
|
2,695,893
shares of common stock reserved for future issuance under our Long-Term Incentive Plan;
|
|
|
|
|
|
|
●
|
1,503,513
shares of common stock issuable upon the exercise of the Warrants to be issued to the purchasers in a concurrent private placement
with this offering at an exercise price of $4.90 per share; and
|
|
|
|
|
|
|
●
|
210,492
shares of common stock issuable upon the exercise of the Palladium Warrant at an exercise price of $4.90 per share.
|
Except
as otherwise indicated, the information in this prospectus supplement is as of February 9, 2021 and assumes (i) no exercise of
the Warrants, (ii) no exercise of the Palladium Warrant and (iii) no exercise of options, vesting of restricted stock units or
exercise of warrants described above.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. In addition to the other information contained in this prospectus supplement
to the accompanying prospectus and in the documents we incorporate by reference, you should carefully consider the risks discussed
below and under the heading “Risk Factors” in the Form S-4 before making a decision about investing in our securities.
The risks and uncertainties discussed below and in the Form S-4 are not the only ones facing us. Additional risks and uncertainties
not presently known to us, or that we currently see as immaterial, may also harm our business. If any of these risks occur, our
business, financial condition and operating results could be harmed, the trading price of our common stock could decline and you
could lose part or all of your investment.
If
you purchase our common stock in this offering, you will suffer immediate dilution of your investment.
The
offering price of our common stock in this offering is substantially higher than the net tangible book value per share of our
common stock. Therefore, if you purchase our common stock in this offering, you will pay a price per share of our common stock
that substantially exceeds our net tangible book value per share after giving effect to this offering. Based on an offering price
of $4.27 per share of our common stock, if you purchase our common stock in this offering, you will experience immediate dilution
of $2.83per share, representing the difference between the offering price per share of our common stock and our pro forma as adjusted
net tangible book value per share after giving effect to this offering. Furthermore, if any of our outstanding options or warrants
are exercised at prices below the offering price, or if we grant additional options or other awards under our equity incentive
plans or issue additional warrants, you may experience further dilution of your investment. See the section entitled “Dilution”
below for a more detailed illustration of the dilution you would incur if you participate in this offering.
Because
we will have broad discretion and flexibility in how the net proceeds from this offering are used, we may use the net proceeds
in ways in which you disagree.
We
intend to use the net proceeds from this offering for working capital purposes. See “Use of Proceeds” on page S-11.
We have not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes. Accordingly,
our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying
on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part
of your investment decision, to assess whether the net proceeds are being used appropriately. It is possible that the net proceeds
will be invested 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 flow.
You
may experience future dilution as a result of future equity offerings and other issuances of our securities. In addition, this
offering and future equity offerings and other issuances of our common stock or other securities may adversely affect the price
of our common stock.
In
order to raise additional capital, we may in the future offer additional shares of common stock or other securities convertible
into or exchangeable for our common stock prices that may not be the same as the price per share in this offering. We may not
be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price
per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights
superior to existing stockholders. The price per share at which we sell additional shares of common stock or securities convertible
into shares of common stock in future transactions may be higher or lower than the price per share in this offering. You will
incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of shares of common stock under our
stock incentive programs. In addition, the sale of shares of common stock in this offering and any future sales of a substantial
number of shares of common stock in the public market, or the perception that such sales may occur, could adversely affect the
price of our common stock. We cannot predict the effect, if any, that market sales of those shares of common stock or the availability
of those shares for sale will have on the market price of our common stock.
We
expect to require additional capital in the future in order to develop our product candidates, which are in early stages of development.
If we do not obtain any such additional financing, it may be difficult to effectively realize our long-term strategic goals and
objectives.
Our
current cash resources will not be sufficient to fund the development of our product candidates through all of the required clinical
trials to receive regulatory approval and commercialization. If we cannot secure this additional funding when such funds are required,
we may fail to develop our product candidates or be forced to forego certain strategic opportunities.
Any
additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership
percentages and could also result in a decrease in the market value of our equity securities.
The
terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences,
superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on
the holders of any of our securities then outstanding.
In
addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees,
accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to
recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may
adversely impact our financial condition.
USE
OF PROCEEDS
We
estimate that the net proceeds from the sale of our common stock offered under this prospectus supplement, after deducting estimated
offering expenses payable by us, will be approximately $11.5 million, excluding the proceeds we may receive form the exercise
of the Warrants issued in the concurrent private placement.
We
intend to use the net proceeds from the sale of the shares for working capital purposes. The amounts and timing of our use of
proceeds will vary depending on a number of factors, including the amount of cash generated or used by our operations. As a result,
we will retain broad discretion in the allocation of the net proceeds of this offering.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any
future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends
in the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors.
Investors should not purchase our common stock with the expectation of receiving cash dividends.
DILUTION
If
you invest in our common stock in this offering, your ownership interest will be diluted by the difference between the price per
share you pay and the net tangible book value per share of our common stock immediately after this offering.
Our
net tangible book value as of September 30, 2020, was approximately $(3,589,158), or $(0.63) per share of our common stock, based
upon 5,737,001 shares of our common stock outstanding as of that date. Net tangible book value per share is determined by dividing
our total tangible assets, less total liabilities, by the number of shares of our common stock outstanding as of September 30,
2020. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers
of shares of common stock in this offering and the net tangible book value per share of our common stock immediately after this
offering.
Our
pro forma net tangible book value as of September 30, 2020, was approximately $14,884,217, or $0.97 per share, after giving effect
to (i) the Spin-Off; (ii) the Offer, whereby the Company issued 7,621,052 shares of common stock and 262,500 shares of Series
B Preferred Stock that are convertible into 262,500 shares of common stock in exchange for 35,635,807 common shares of Jay Pharma
(excluding the issuance of an aggregate of 3,262,907 shares of Series B Preferred Stock that are convertible into 3,262,907 shares
of common stock issued in transactions related to the Offer); (iii) the conversion of indebtedness and the securities issued upon
closing of a private placement made in connection with the Offer; (iv) the acquisition of intellectual property by Jay Pharma
in exchange for 10,360,007 common shares of Jay Pharma; and (v) the issuance of 1,610,679 shares of our common stock in the January
2021 Offering at the price of $4.5018 per share and the exercise of pre-funded warrants to purchase 610,679 shares of common stock
sold in the January 2021 Offering; and (vi) the conversion of 3,262,907 shares of Series B Preferred Stock into 3,262,907 shares
of common stock.
After
giving further effect to the sale of 3,007,026 shares of our common stock in this offering at the price of $4.27 per share, and
after deducting the estimated offering expenses payable by us in this offering, our pro forma as adjusted net tangible book value
as of September 30, 2020, would have been approximately $26.4 million, or $1.44 per share. This represents an immediate increase
in pro forma net tangible book value of $0.47 per share to existing stockholders and immediate dilution in net tangible book value
of $2.83 per share to new investors. The following table illustrates this dilution on a per share basis:
|
Offering price per share
|
|
|
|
|
|
$
|
4.27
|
|
|
Historical net tangible book value per share as of September 30, 2020
|
|
$
|
(0.63
|
)
|
|
|
|
|
|
Pro forma increase in net tangible book value per share
|
|
$
|
1.60
|
|
|
|
|
|
|
Pro forma net tangible book value per share as of September 30, 2020
|
|
$
|
0.97
|
|
|
|
|
|
|
Increase in net tangible book value per share attributable to this offering
|
|
$
|
0.47
|
|
|
|
|
|
|
Pro forma as adjusted net tangible book value per share as of September 30, 2020, after giving effect to this offering
|
|
|
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution in net tangible book value per share to new investors
|
|
|
|
|
|
$
|
2.83
|
|
The
foregoing discussion and table assumes no exercise of the Warrants to be issued in a concurrent private placement or the Palladium
Warrant. To the extent that outstanding options or warrants are exercised, you may experience further dilution. In addition, we
may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient
funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or
convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
The
above discussion and table as of September 30, 2020 are based upon, after giving effect to the adjustments set forth above, and
excludes:
|
|
●
|
262,500
shares of common stock issuable upon the conversion of outstanding shares of Series B Convertible Preferred Stock;
|
|
|
|
|
|
|
●
|
1,791,923
shares of common stock issuable upon the exercise of Series B Warrants;
|
|
|
|
|
|
|
●
|
806,563
shares of common stock issuable upon the exercise of stock options outstanding at a weighted average exercise price of $1.37
per share;
|
|
|
|
|
|
|
●
|
3,615,268
shares of common stock issuable upon the exercise of warrants outstanding at a weighted average exercise price of $9.25 per
share;
|
|
|
|
|
|
|
●
|
2,695,893
shares of common stock reserved for future issuance under our Long-Term Incentive Plan;
|
|
|
|
|
|
|
●
|
1,503,513
shares of common stock issuable upon the exercise of the Warrants to be issued to the purchasers in a concurrent private placement
with this offering at an exercise price of $4.90 per share; and
|
|
|
|
|
|
|
●
|
210,492
shares of common stock issuable upon the exercise of the Palladium Warrant at an exercise price of $4.90 per share.
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
You
should read the following discussion and analysis of our financial condition and operating results together with our financial
statements and related notes incorporated by reference into this prospectus. This discussion and analysis and other parts of this
prospectus contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties
and assumptions. See “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk
Factors” or in other parts of this prospectus or the documents incorporated by reference into this prospectus. Unless stated
otherwise, references in this discussion and analysis to “us,” “we,” “our,” “Enveric”
or our “Company” and similar terms refer to Enveric Biosciences, Inc., a Delaware corporation. References to “Ameri”
refer to our Company prior to the Offer.
Overview
Merger
On
December 30, 2020, pursuant to the previously announced the Tender Agreement, we completed the Offer to purchase all of the outstanding
common shares of Jay Pharma for the number of shares of common stock of the Company, par value $0.01 per share or Series B Preferred
Stock, as applicable, equal to the exchange ratio of 0.8849, and Jay Pharma became a wholly-owned subsidiary of the Company, on
the terms and conditions set forth in the Tender Agreement. Following the effective time of the Offer, the Company changed the
name of the Company from AMERI Holdings, Inc. to Enveric Biosciences, Inc. and effected a 1-for-4 reverse stock split of the issued
and outstanding common stock. Immediately following completion of the Offer and the transactions contemplated in the Tender Agreement,
but without giving effect to the issuance of the Series B Warrants to purchase 1,791,923 shares of common stock, (i) the former
Jay Pharma equity holders (including certain investors in private placements that closed prior to the completion of the Offer)
own approximately 82.3% of the Company; (ii) former Ameri equity holders own approximately 14.5% of the Company; and (iii) a financial
advisor to Jay Pharma and Ameri owns approximately 3.2% of the Company.
On
December 30, 2020, pursuant to the Ameri Share Purchase Agreement, Ameri consummated the Spin-Off and all of the issued and outstanding
shares of Series A Preferred Stock were redeemed for an equal number of shares of Private Ameri Preferred Stock. Ameri contributed,
transferred and conveyed to Private Ameri all of the issued and outstanding equity interests of the existing subsidiaries of Ameri,
constituting the entire business and operations of Ameri and its subsidiaries, and Private Ameri assumed the liabilities of such
subsidiaries.
The
Offer has been accounted for as a “reverse merger” under the acquisition method of accounting for business combinations
with Jay Pharma treated as the accounting acquirer of Ameri. As such, the historical financial statements of Jay Pharma have become
the historical financial statements of Ameri, or the combined company, and are incorporated into this report labeled “Jay
Pharma, Inc.” No historical common stock, stock options and additional paid-in capital, including share and per share
amounts presented in this Management’s Discussion and Analysis of Financial Condition and Results of Operations has been
adjusted to reflect the equity structure of the resulting issuer as a result of the Offer and the related transactions, including
the effect of the Exchange Ratio and the common stock.
Reverse
Stock Split
On
December 30, 2020, we affected a 1-for-4 reverse stock split. We made proportionate adjustments to the per share exercise price
and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units (if any) and warrants
outstanding as of the effective times of the reverse stock split in accordance with the terms of each security based on the split
ratio. Also, we reduced the number of shares reserved for issuance under our equity compensation plans proportionately based on
the split ratios. Except for adjustments that resulted from the rounding up of fractional shares to the next whole share, the
reverse stock split affected all stockholders uniformly and did not change any stockholder’s percentage ownership interest
in our company. All share and related option and warrant information presented in this prospectus supplement (other than this
Management’s Discussion and Analysis of Financial Condition and Results of Operations as noted below) have been retroactively
adjusted to reflect the reduced number of shares outstanding and the increase in share price which resulted from these actions;
however, common stock share and per share amounts in the accompanying prospectus and certain of the documents incorporated by
reference herein have not been adjusted to give effect to the reverse stock split. No share or related option or warrant information
presented in this Management’s Discussion and Analysis of Financial Condition and Results of Operations has been adjusted
to reflect the reduced number of shares outstanding, the increase in share price which resulted from these actions or otherwise
give effect to the reverse stock split.
Business
Overview
We
are a biopharmaceutical and wellness company that is seeking to develop innovative, evidence-based cannabinoid product candidates
and combination therapies to address unmet needs in cancer care. We seek to improve the lives of persons suffering from cancer,
initially by developing over-the-counter palliative cancer care and wellness cosmetic product candidates for persons suffering
from the side effects of cancer and cancer treatment. We are also aiming to advance a pipeline of novel cannabinoid combination
therapies for hard-to-treat cancers, including glioblastoma multiforme (GBM). We are to bring leading oncology clinicians and
researchers, academic and industry partners, proprietary products and data, and eventually a robust pipeline of product candidates,
to improve quality of life and provide symptomatic relief to cancer patients.
Key
Components of Our Results of Operations
Operating
Expenses
Our
operating expenses include financial statement preparation services, tax compliance, various consulting and director fees, legal
services, auditing fees, and stock-based compensation. These expenses have increased in connection with the Company’s product
development and the Company’s management expects these expenses to continue to increase as the Company continues to develop
its potential product candidates.
Results
of Operations
Comparison
of the Nine Months Ended September 30, 2020 and 2019
The
following table sets forth information comparing the components of net loss for the nine months ended September 30, 2020 and the
comparable period in 2019:
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
$
|
2,094,044
|
|
|
$
|
1,895,355
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(2,094,044
|
)
|
|
|
(1,895,355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
Extinguishment of notes payable
|
|
|
-
|
|
|
|
32,257
|
|
|
Interest expense
|
|
|
388,143
|
|
|
|
47,858
|
|
|
Total other expense
|
|
|
312,642
|
|
|
|
80,115
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(2,482,187
|
)
|
|
$
|
(1,975,470
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
Foreign exchange (loss) gain
|
|
|
(30,077
|
)
|
|
|
(5,204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
$
|
(2,512,264
|
)
|
|
$
|
(1,970,266
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
|
25,916,419
|
|
|
|
25,060,193
|
|
Operating
Expenses
Our
operating expenses increased to $2,094,044, for the nine months ended September 30, 2020 from $1,895,355 for the nine months ended
September 30, 2019, for an increase of $198,689, or 10.5%. This change was primarily driven by an increase in legal fees of $677,646
and consulting fees of $259,773, offset by a decrease in stock-based compensation of $535,587, marketing costs of $180,354, and
research and development of $156,911.
Interest
Expense
Our
interest expense for the nine months ended September 30, 2020 was $388,143 compared to $47,858 for the nine months ended September
30, 2019. This increase was primarily driven by the Company’s promissory notes that were entered into during 2019, with
an aggregate principal amount of $2,077,925, which it did not have during the nine months ended September 30, 2019.
Foreign
Exchange
Our
foreign exchange (loss) gain was $(30,077) for the nine months ended September 30, 2020 as compared to $5,204 for the nine months
ended September 30, 2019. The increase in foreign exchange loss is primarily due to the U.S. Dollar weakening against the Canadian
Dollar and the conversion of the Canadian Dollars into United States Dollars for payment of United States Dollar denominated expenses.
Comparison
of the Year Ended December 30, 2019 and 2018
The
following table sets forth information comparing the components of net loss for the year ended December 31, 2019 and the comparable
year in 2018:
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
$
|
2,296,534
|
|
|
$
|
1,919,577
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(2,296,534
|
)
|
|
|
(1,919,577
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
|
|
|
|
|
|
|
Extinguishment of notes payable
|
|
|
32,316
|
|
|
|
-
|
|
|
Accretion and interest
|
|
|
81,823
|
|
|
|
-
|
|
|
Total other expense
|
|
|
114,139
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(2,410,673
|
)
|
|
$
|
(1,919,577
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss
|
|
|
(6,667
|
)
|
|
|
(3,877
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
$
|
(2,417,340
|
)
|
|
$
|
(1,923,454
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
|
25,085,980
|
|
|
|
22,607,147
|
|
Operating
Expenses
Our
operating expenses increased to $2,296,534, for the year ended December 31, 2019 from $1,919,577 for the year ended December 31,
2018, for an increase of $376,957, or 19.6%. This change was primarily driven by an increase in payroll and consulting fees of
approximately $409,000, an increase in stock-based compensation of $117,896, offset by a decrease in patent costs of $652,624.
Extinguishment
of Notes Payable
Our
loss on extinguishment of notes payable increased to $32,316, for year ended December 31, 2019 was due to the Company entering
into an amendment to the July 2019 Note on September 20, 2019, which extended the maturity date for such note to until the earlier
of (a) the completion of a bridge financing of greater than or equal to $1.5 million, or (b) November 7, 2019.
Accretion
and Interest
Our
accretion and interest expense for the year ended December 31, 2019 was $81,823 compared to $0 for the year ended December 31,
2018. This increase was primarily driven by the Company’s promissory notes that were entered into during 2019, with an aggregate
principal amount of $740,336, which it did not have during the year ended December 31, 2018.
Foreign
Exchange
Our
foreign exchange loss was $6,667 for the year ended December 31, 2019 as compared to $3,877 for the year ended December 31, 2018,
for an increase of $2,790. The increase in foreign exchange loss is primarily due to the U.S. Dollar strengthening against the
Canadian Dollar and the conversion of the Canadian Dollars into United States Dollars for payment of United States Dollar denominated
expenses.
Liquidity
and Capital Resources
The
Company has incurred continuing losses from its operations and as of September 30, 2020, the Company had an accumulated deficit
of $7,377,068 and working capital deficiency of $3,589,158.
Since
inception, the Company has met its liquidity requirements principally through the issuance of notes payable and the sale of its
shares of common stock.
The
Company has no present revenue and the Company’s ability to continue its operations and to pay its obligations when they
become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure
additional funds through debt and equity financings and to continue to develop its technologies under its sublicense agreement
(see Note 4 to the financial statements for the year ended December 31, 2019). Without further funding, the sublicense agreement
will have no commercial value.
There
are no assurances that the Company will be able to raise capital on terms acceptable to the Company or at all, or that cash flows
generated from its operations will be sufficient to meet its current operating costs and required debt service. Our ability to
obtain additional capital may depend on prevailing economic conditions and financial, business and other factors beyond our control.
The COVID-19 pandemic has caused an unstable economic environment globally. Disruptions in the global financial markets may adversely
impact the availability and cost of credit, as well as our ability to raise money in the capital markets. Current economic conditions
have been and continue to be volatile. Continued instability in these market conditions may limit our ability to access the capital
necessary to fund and grow our business. If the Company is unable to obtain sufficient amounts of additional capital, it may be
required to reduce the scope of its planned product development, which could harm its financial condition and operating results,
or it may not be able to continue to fund its ongoing operations. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern to sustain operations for at least one year from the issuance date of these financial statements.
The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.
On
January 12, 2018, the Company entered into a sublicense agreement (which formalized the sublicense terms as agreed to in 2017)
with TO Pharmaceuticals USA LLC (“TOP”). This agreement requires TOP to sublicense to the Company certain patent and
other intellectual property rights for the exclusive use by the Company in cancer-related applications. These rights include intellectual
property consisting of patents regarding cannabis pharmaceutical products. The sublicense does not provide for any ability for
the Company to sublicense these rights to third parties without the express written consent of TOP. In exchange for the sublicensed
patents, the Company issued to TOP 7,280,000 shares of its common stock along with an obligation to issue to TOP 40% of shares
of common stock issued to investors during future financings up to $1.25 million. In connection with the additional rounds of
financing, the Company issued to TOP an additional 2,157,162 common shares during the year ended December 31, 2018.
In
January 2018, the Company closed a private placement for 1,900,000 shares of common stock for CAD $0.25 (USD $0.20) per common
share for gross proceeds of CAD $475,000 (USD $376,203).
In
October 2018, the Company closed a private placement for 992,244 shares of common stock and warrants to purchase 992,244 shares
of common stock for CAD $0.87 (USD $0.68) per common share for gross proceeds of CAD $579,044 (USD $446,462). The warrants are
exercisable immediately and expire on October 31, 2020.
On
February 7, 2019, the Company received $60,000 in exchange for a promissory note to David Stefansky with an aggregate face value
of $66,000, including an original issue discount of $6,000 (the “February 2019 Note”). The February 2019 Note bears
no stated interest rate and was due on May 8, 2019. Given that the Company was unable to pay its obligation under the note, the
February 2019 Note is currently in default. The Company amortized the full $6,000 original issue discount in the statement of
operations and comprehensive loss through December 31, 2019. On December 30, 2020, the February 2019 Note was converted into the
Company’s common stock in connection with the consummation of the Offer.
On
February 1, 2019, the Company entered into a consulting agreement with David Stefansky. In connection with the consulting agreement,
on March 5, 2019, the Company issued a note payable to its executive director for $150,000 (the “March 2019 Note”).
The note bears no interest and is due and payable on March 4, 2020. The agreement expired on February 1, 2020. On December 30,
2020, the March 2019 Note was converted into common stock of the Company in connection with the consummation of the Offer. During
April 2019, the Company received $300,000 in exchange for convertible notes in an aggregate principal amount of $300,000 (the
“April 2019 Convertible Notes”) and warrants to purchase 250,000 shares of the Company’s common stock. The April
2019 Convertible Notes payable bear interest at a rate of 6% per annum and are due and payable one year from the date of issuance.
The notes are convertible at any time by the holder into shares of the Company’s common stock at a price of $0.60 per share.
If the Company sells or issues common stock at a price lower than the conversion price of the notes, the conversion price shall
be reduced to that price. The notes payable will automatically convert into shares of the Company’s common stock in the
event that the Company consummates a reverse merger with a publicly traded company. On December 30, 2020, the April 2019 Convertible
Notes converted into shares of the Company’s common stock in connection with the consummation of the Offer.
On
July 8, 2019, the Company entered into a note agreement (the “July 2019 Note”) with a limited liability company (the
“Lender”). The July 2019 Note’s face value was $157,714.29 and the original issue discount was $19,714.29 for
total gross proceeds of $138,000. The maturity date of the July 2019 Note was September 8, 2019. As there remained an outstanding
balance on the July 2019 Note at its maturity date, the Company was in default. Per the July 2019 Note, the Lender may at its
option (a) declare the entire principal amount of the July 2019 Note, together with all accrued interest thereon and all other
amounts payable hereunder, immediately due and payable; and/or (b) exercise any or all of its rights, powers or remedies under
applicable law. In connection with the July 2019 Note, the Company issued warrants to purchase 131,429 shares of the Company’s
common stock at an exercise price of $0.71 per share. The warrants are exercisable for a period of five years.
On
September 20, 2019, the Company entered into the first amendment to the July 2019 Note. The amendment extended the maturity date
for the July 2019 Note until the earlier of (a) the completion of a bridge financing of greater than or equal to $1,500,000, or
(b) November 7, 2019. In consideration for the amendment, the Company agreed to pay an extension fee of $18,926, which was added
to the outstanding balance of the July 2019 Note. In addition to the extension fee, the Company agreed to grant warrants to purchase
50,000 shares of the Company’s common stock, subject to approval by the Company’s board of directors. If the Company’s
board of directors did not approve the grant of the warrants prior to October 18, 2019, the Company agreed to pay an additional
extension fee of $15,000 in lieu of issuing the warrants. On October 19, 2019, given that the Company did not grant the warrants,
$15,000 was added to the face value of the July 2019 Note.
On
November 21, 2019, the Company entered into the second amendment to the July 2019 Note (the “November 21 Amendment”).
The November 21 Amendment extended the maturity date for the Note until the earlier of (a) the completion of a bridge financing
of greater than or equal to $1,500,000, or (b) December 9, 2019. In consideration for the November 21 Amendment, the Company agreed
to grant 25,440 shares of the Company’s common stock, subject to approval by the Company’s board of directors.
On
December 9, 2019, the Company entered into the third amendment to the July 2019 Note (the “December 9 Amendment”).
The December 9 Amendment extended the maturity date for the Note until the earlier of (a) the completion of a bridge financing
of greater than or equal to $1,500,000, or (b) January 7, 2020. In consideration for the December 9 Amendment, the Company agreed
to pay the previously outstanding extension fees of $33,926 on or before March 1, 2020.
On
January 8, 2020 the Company entered into the fourth amendment to the July 2019 Note (the “January 8 Amendment”). The
January 8 Amendment extended the maturity date for the July 2019 Note until the (a) the completion of a bridge financing of greater
than or equal to $1,500,000, or (b) April 1, 2020. In consideration for the January 8 Amendment, the Company agreed to grant 50,000
shares of the Company’s common stock, subject to approval by the Company’s board of directors. On December 30, 2020,
the July 2019 Notes were repaid in connection with the consummation of the Offer
On
January 10, 2020, the Company issued a convertible note payable for $1,500,000 to Alpha in exchange for cash. On December 30,
2020, the convertible note issued to Alpha converted into shares of the Company’s common stock and shares of Series B Preferred
Stock in connection with the consummation of the Offer.
The
Company has no present revenue and the Company’s ability to continue its operations and to pay its obligations when they
become due is contingent upon the Company obtaining additional financing. Management’s plans include seeking to procure
additional funds through debt and equity financings and to continue to develop the Company’s technologies under the series
of assignment and assumption agreements with Tikkun.
Based
on the Company’s current development plans, the Company believes that existing cash, the cash it received from the Alpha
Investment and this offering will be sufficient to satisfy its anticipated cash requirements for the next twelve months, but that
the Company will be required to seek additional equity or debt financing in the next twelve months. In the event that additional
financing is required from outside sources, the Company may not be able to raise monies on terms acceptable to it or at all. If
we are unable to obtain sufficient amounts of additional capital, it may be required to reduce the scope of its planned product
development, which could harm its financial condition and operating results, or it may not be able to continue to fund its ongoing
operations.
Cash
Flows
Since
inception, we have primarily used its available cash to fund its product development expenditures.
Cash
Flows for the Nine Months Ended September 30, 2020 and 2019
The
following table sets forth a summary of cash flows for the periods presented:
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Net cash used in operating activities
|
|
$
|
(1,638,798
|
)
|
|
$
|
(632,590
|
)
|
|
Net cash provided by financing activities
|
|
|
1,932,196
|
|
|
|
520,000
|
|
|
Effect of foreign exchange rate on cash
|
|
|
3,786
|
|
|
|
7,802
|
|
|
Net (decrease) increase in cash
|
|
$
|
297,184
|
|
|
$
|
(104,788
|
)
|
Operating
Activities
Net
cash used in operating activities was $1,638,798 during the nine months ended September 30, 2020, which consisted primarily of
a net loss of $2,482,187, offset by amortization of note discount of $285,858, increases in prepaid expenses and other current
assets for $1,841, and increases in accounts payable and accrued liabilities of $522,162.
Net
cash used in operating activities was $632,590 during the nine months ended September 30, 2019, which consisted primarily of a
net loss of $1,975,470, offset by amortization of note discount of $38,985, increases in stock based compensation of $624,052,
decreases in prepaid expenses and other current assets of $67,591, an extinguishment of notes payable of $32,257, and increases
in accounts payable and accrued liabilities of $571,121.
Financing
Activities
Net
cash provided by financing activities was $1,932,196 during the nine months ended September 30, 2020, which consisted primarily
of $50,000 in proceeds from convertible notes payable, $1,812,410 in proceeds from note payable, $227,500 in proceeds from the
sale of common stock, and a decrease of $157,714 in repayment of note payable.
Net
cash provided by financing activities was $520,000 during the nine months ended September 30, 2019, which consisted of $300,000
in proceeds from convertible notes payable, $198,000 in proceeds from note payable, and $22,000 in advances from related parties.
Cash
Flows for the year ended December 31, 2019 and 2018
The
following table sets forth a summary of cash flows for the periods presented:
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|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Net cash used in operating activities
|
|
$
|
(647,860
|
)
|
|
$
|
(711,165
|
)
|
|
Net cash provided by financing activities
|
|
|
560,000
|
|
|
|
822,665
|
|
|
Effect of foreign exchange rate on cash
|
|
|
17,903
|
|
|
|
(3,744
|
)
|
|
Net (decrease) increase in cash
|
|
$
|
(69,957
|
)
|
|
$
|
107,756
|
|
Operating
Activities
Net
cash used in operating activities was $647,860 during the year ended December 31, 2019, which consisted primarily of a net loss
of $2,410,673, offset by extinguishment of note payable of $32,316, amortization of note discount of 68,453, stock-based compensation
of $624,052, increases in prepaid expenses and other current assets for $104,340, and increases in accounts payable and accrued
liabilities of $933,652.
Net
cash used in operating activities was $711,165 during the year ended December 31, 2018, which consisted primarily of a net loss
of $1,919,577, offset by stock-based compensation of $53,294, stock issued for sublicense in the amount of $644,006, decreases
in prepaid expenses and other current assets of $5,938, and increases in accounts payable and accrued liabilities of $151,668.
Financing
Activities
Net
cash provided by financing activities was $560,000 during the year ended December 31, 2019, which consisted primarily of $238,000
in proceeds from notes payable, $300,000 in proceeds from convertible notes payable, and $22,000 in advances from related party.
Net
cash provided by financing activities was $822,665 during the year ended December 31, 2018, which consisted of $822,665 in proceeds
from common stock.
Off-Balance
Sheet Arrangements
The
Company did not have any off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent
interests in transferred assets, or any obligation arising out of a material variable interest in an unconsolidated entity. Additionally,
the Company does not have interests in, nor relationships with, any special purpose entities.
Critical
Accounting Policies and Significant Judgments and Estimates
The
Company’s accounting policies are fundamental to understanding its management’s discussion and analysis. The Company’s
significant accounting policies are presented in Note 3 to its financial statements for the year ended December 31, 2019, which
are incorporated by reference into this prospectus supplement. The Company’s financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim
financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP. However, in the
opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating
results have been included in the Company’s condensed financial statements.
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect
on the accompanying financial statements, other than those disclosed below.
On
February 25, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2016-02, Leases (Topic 842). This update will require organizations that lease assets to recognize on the balance sheet the assets
and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures
about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual
and interim periods beginning after December 15, 2019. The Company has determined that the adoption of this ASU will not have
a material impact on the Company’s financial position and results of operations.
In
July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic, 842, Leases”, which clarifies how to
apply certain aspects of the new leases standard, ASC 842. The amendments address the rate implicit in the lease, impairment of
the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options,
variable payments that depend on an index or rate and certain transition adjustments, among other things.
In
July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which provides entities with
relief from the costs of implementing certain aspects of the new leasing standard, ASC 842. Specifically, under the amendments
in ASU 2018-11, (1) entities may elect not to recast the comparative periods presented when transitioning to ASC 842 and (2) lessors
may elect not to separate lease and nonlease components when certain conditions are met.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts. As of September 30, 2020, the
Company did not have greater than $250,000 at any US or Canadian financial institutions.
Foreign
Currency Risk
From
inception through September 30, 2020, the reporting currency of the Company is the United States dollar while the functional currency
of the Company is the Canadian dollar. As a result, the Company is subject to exposure from changes in the exchange rates of the
Canadian dollar and the U.S. dollar.
The
Company has not entered into any financial derivative instruments that expose it to material market risk, including any instruments
designed to hedge the impact of foreign currency exposures. The Company may, however, hedge such exposure to foreign currency
exchange fluctuations in the future.
DESCRIPTION
OF SECURITIES WE ARE OFFERING
We
are offering shares of our common stock to purchase shares of our common stock.
Authorized
Capital Stock
We
have authorized 120,000,000 shares of capital stock, of which 100,000,000 are shares of common stock, $0.01 par value per share
and 20,000,000 are shares of preferred stock, $0.01 par value per share. On February 9, 2021, there were 15,329,350 shares of
common stock and 262,500 shares of our Series B Preferred Stock issued and outstanding.
Common
Stock
Holders
of common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders. Holders of
common stock has no cumulative voting rights.
Further,
holders of common stock have no preemptive or conversion rights or other subscription rights. Upon liquidation, dissolution or
winding- up, holders of common stock are entitled to share in all assets remaining after payment of all liabilities and the liquidation
preferences of any of the outstanding shares of preferred stock. Subject to preferences that may be applicable to any outstanding
shares of preferred stock, holders of common stock are entitled to receive dividends, if any, as may be declared from time to
time by the board of directors out of our assets which are legally available. Such dividends, if any, are payable in cash, in
property or in shares of capital stock.
The
holders of a majority of the shares of the capital stock, represented at the special meeting or by proxy, are necessary to constitute
a quorum for the transaction of business at any meeting. If a quorum is present, an action by stockholders entitled to vote on
a matter is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the
action, with the exception of the election of directors, which requires a plurality of the votes cast.
Our
common stock is listed on Nasdaq under the symbol “ENVB.” The transfer agent and registrar for our common stock Equiniti
Trust Company.
PRIVATE
PLACEMENT OF WARRANTS
In
a concurrent private placement, we are selling to each of the investors in this offering Warrants to purchase one share of common
stock for every one share of common stock purchased in the offering by each such investor. The aggregate number of Warrant Shares
is 1,503,513. The Warrants will be exercisable at an exercise price of $4.90 per share. The exercise price and number of Warrant
Shares will be subject to adjustment in the event of any stock dividend and split, reverse stock split, recapitalization, reorganization
or similar transaction, as described in the Warrants.
Each
Warrant shall be exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance.
A holder of Warrants will have the right to exercise the Warrants on a “cashless” basis if there is no effective registration
statement registering the resale of the Warrant Shares after the closing date of this offering. Subject to limited exceptions,
a holder of Warrants will not have the right to exercise any portion of its Warrants if the holder, together with its affiliates,
would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the number
of shares of our common stock outstanding immediately after giving effect to such exercise, provided that the holder may increase
or decrease the beneficial ownership limitation up to 9.99%. Any increase in the beneficial ownership limitation shall not be
effective until 61 days following notice of such change to the Company.
We
also entered into a registration rights agreement, dated February 9, 2021, with each of the investors, pursuant to which, among
other things, we agreed to prepare and file with the Securities and Exchange Commission a registration statement to register for
resale of all of the Warrant Shares.
Except
as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our common stock, the holders
of the Warrants do not have the rights or privileges of holders of our common stock, including any voting rights, until they exercise
their Warrants.
The
Warrants and the Warrant Shares are being offered pursuant to the exemptions provided in Section 4(a)(2) under the Securities
Act and Rule 506(b) promulgated thereunder, and they are not being offered pursuant to this prospectus supplement and the accompanying
prospectus.
There
is no established public trading market for the Warrants and we do not expect a market to develop. In addition, we do not intend
to list the Warrants on the Nasdaq Capital Market, any other national securities exchange or any other nationally recognized trading
system. All purchasers are required to be “accredited investors” as such term is defined in Rule 501(a) under the
Securities Act.
PLAN
OF DISTRIBUTION
We
are offering 3,007,026 shares of our common stock at an offering price of $4.27 per share in a registered direct offering to investors
that are not affiliated with us. We established the price following negotiations with prospective investors and with reference
to the prevailing market price of our common stock, recent trends in such price and other factors.
The
shares of our common stock offered hereby are being sold directly to purchasers and not through a placement agent, underwriter
or securities broker or dealer.
We
estimate the total expenses of this offering paid or payable by us will be approximately $1.3 million which includes an advisory
fee and non-accountable expenses totaling $1.2 million paid to Palladium for its services as an advisor in connection with this
offering. After deducting our estimated expenses in connection with this offering, we expect the net proceeds from this offering
will be approximately $11.5 million.
In
addition to the advisory fee, we also agreed to issue the Palladium Warrant to purchase 210,492 shares of our common stock (which
equals 7% of the aggregate number of shares sold in this offering) at an exercise price of $4.90 per share. The Palladium Warrant
will have terms identical in all material respects to the Warrants.
We
entered into a securities purchase agreement with purchasers covering the sale of the shares offered under this prospectus supplement.
We currently anticipate that closing of this offering will take place on or about February 11, 2021.
Palladium
also served as an advisor in connection with the January 2021 Offering and received fees and payment of non-accountable expenses
totaling $900,000 and an unregistered warrant to purchase up to 155,493 shares of common stock as compensation for its services.
The
transfer agent and registrar for our common stock is Equiniti Trust Company.
Our
shares of common stock are listed on The Nasdaq Capital Market under the symbol “ENVB.”
LEGAL
MATTERS
The
validity of the securities offered by this prospectus supplement will be passed upon for us by Haynes and Boone, LLP, New York,
New York.
EXPERTS
The
financial statements of Ameri as of and for the years ended December 31, 2019 and 2018 incorporated by reference into this prospectus
supplement have been audited by RAM Associates, CPA, an independent registered public accounting firm, as stated in their report
appearing herein. Such financial statements are incorporated by reference in reliance upon the report of such firm given upon
its authority as experts in accounting and auditing.
The
financial statements of Jay Pharma as of December 31, 2019 and 2018 and for each of the two years in the period ended December
31, 2019 incorporated by reference into this prospectus supplement have been audited by Marcum LLP, independent registered public
accounting firm, as set forth in their report thereon, which report includes an explanatory paragraph relating to substantial
doubt about the ability of Jay Pharma, Inc. to continue as a going concern as described in Note 1 to the financial statements,
and which report appears in an exhibit to the Current Report on Form 8-K filed with the SEC on January 6, 2021, as amended by
Form 8-K/A on January 11, 2021 and February 9, 2021. Such financial statements are incorporated by reference in reliance upon
the report of such firm given upon its authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the common stock offered
by this prospectus supplement and the accompanying prospectus. This prospectus supplement, filed as part of the registration statement,
does not contain all the information set forth in the registration statement and its exhibits and schedules, portions of which
have been omitted as permitted by the rules and regulations of the SEC. For further information about us, we refer you to the
registration statement and to its exhibits and schedules.
We
file annual, quarterly and current reports and other information with the SEC. The SEC maintains an internet website at www.sec.gov
that contains periodic and current reports, proxy and information statements, and other information regarding registrants
that are filed electronically with the SEC.
These
documents are also available, free of charge, through the Investors section of our website, which is located at https://enveric.com/.
Information contained on our website is not incorporated by reference into this prospectus supplement or the accompanying prospectus
and you should not consider information on our website to be part of this prospectus supplement or the accompanying prospectus.
INCORPORATION
BY REFERENCE
The
SEC allows us to “incorporate by reference” information that we file with it. Incorporation by reference allows us
to disclose important information to you by referring you to those other documents. The information incorporated by reference
is an important part of this prospectus supplement and the accompanying prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We filed a registration statement on Form S-3 under the Securities
Act of 1933, as amended, with the SEC with respect to the securities being offered pursuant to this prospectus supplement and
the accompanying prospectus. This prospectus supplement and the accompanying prospectus omit certain information contained in
the registration statement, as permitted by the SEC. You should refer to the registration statement, including the exhibits thereto,
for further information about us and the securities being offered pursuant to this prospectus supplement and the accompanying
prospectus. Statements in this prospectus supplement and the accompanying prospectus regarding the provisions of certain documents
filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement is qualified
in all respects by that reference. Copies of all or any part of the registration statement, including the documents incorporated
by reference or the exhibits, may be obtained upon payment of the prescribed rates at the offices of the SEC listed above in “Where
You Can Find More Information.” The documents we are incorporating by reference are:
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our
Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 25, 2020, as amended by our Annual
Report on Form 10-K/A, filed with the SEC on August 12, 2020;
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●
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our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, filed with the
SEC on May 15, 2020, August 14, 2020 and November 16, 2020, respectively;
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●
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our
Current Reports on Form 8-K filed with the SEC on January 13, 2020, March 4, 2020, May 6, 2020, June 1, 2020, June 4, 2020,
August 3, 2020, August 12, 2020, September 11, 2020, as amended by Form 8-K/A filed with the SEC on September 16, 2020, December 15, 2020, December 18, 2020, December 29, 2020, January 6, 2021, January 6, 2021, as amended by Form 8-K/A filed with the
SEC on January 11, 2021 and February 9, 2021, January 12, 2021, as amended by Form 8-K/A filed with the SEC on January 13, 2021, and January 15, 2021, respectively;
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●
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the
following sections from the Form S-4: “Risk Factors,” “Management of the Resulting Issuer,” “Information
About Jay Pharma,” “Information About Ameri—Legal Proceedings,” “Principal Stockholders of Jay
Pharma and the Resulting Issuer,” “Principal Stockholders of Ameri and the Resulting Issuer”, “Related
Party Transactions” and “Description of Ameri Capital Stock;” and
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●
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the
description of our common stock contained in the “Description of Ameri Capital Stock” in the Form S-4.
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In
addition, all documents (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed in such
forms that are related to such items unless such Form 8-K expressly provides to the contrary) subsequently filed by us pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, before the date our offering is terminated
or completed are deemed to be incorporated by reference into, and to be a part of, this prospectus supplement and the accompanying
prospectus.
Any
statement contained in this prospectus supplement and the accompanying prospectus, or any free writing prospectus provided in
connection with this offering or in a document incorporated or deemed to be incorporated by reference into this prospectus supplement
and the accompanying prospectus will be deemed to be modified or superseded for purposes of this prospectus supplement and the
accompanying prospectus to the extent that a statement contained in this prospectus supplement and the accompanying prospectus,
or any free writing prospectus provided in connection with this offering or any other subsequently filed document that is deemed
to be incorporated by reference into this prospectus supplement and the accompanying prospectus modifies or supersedes the statement.
Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this
prospectus supplement and the accompanying prospectus.
Upon
written or oral request, we will provide you without charge, a copy of any or all of the documents incorporated by reference,
other than exhibits to those documents unless the exhibits are specifically incorporated by reference in the documents. Please
send requests to Enveric Biosciences, Inc., 4851 Tamiami Trail N, Suite 200, Naples, Florida 34103, Attention: John Van Buiten.
You should rely only on information contained in, or incorporated by reference into, this prospectus supplement and the accompanying
prospectus or any free writing prospectus provided in connection with this offering. We have not authorized anyone to provide
you with information different from that contained in this prospectus supplement and the accompanying prospectus or any free writing
prospectus provided in connection with this offering or incorporated by reference in this prospectus supplement and the accompanying
prospectus. We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not
authorized or to anyone to whom it is unlawful to make such offer or solicitation.
AMERI Holdings, Inc.
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We may offer and sell, from time to time in one or more offerings, any combination of common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, or any
combination of the foregoing, either individually or as units comprised of one or more of the other securities, having an aggregate initial offering price not exceeding $25,000,000.
This prospectus provides a general description of the securities we may offer. Each time we sell a particular class or series of securities, we will provide specific terms of the securities offered in a supplement to this
prospectus. The prospectus supplement and any related free writing prospectus may also add, update or change information contained in this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with
these offerings. You should read carefully this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference herein or therein before you invest in any of our securities.
The specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in one or more supplements to this prospectus. This prospectus may not be used to consummate sales
of any of these securities unless it is accompanied by a prospectus supplement. Before investing, you should carefully read this prospectus and any related prospectus supplement.
Our common stock is presently listed on The Nasdaq Capital Market under the symbol “AMRH.” On August 12, 2019, the last reported sale price of our common stock was $0.3234 per share. The applicable prospectus supplement
will contain information, where applicable, as to any other listing on The Nasdaq Capital Market or any securities market or other exchange of the securities, if any, covered by the prospectus supplement. Prospective purchasers of our securities are
urged to obtain current information as to the market prices of our securities, where applicable.
These securities may be sold directly by us, through dealers or agents designated from time to time, to or through underwriters, dealers, or through a combination of these methods on a continuous or delayed basis. See “Plan of Distribution” in this prospectus. We may also describe the plan of distribution for any particular offering of our securities in a prospectus supplement. If any agents, underwriters or dealers are involved
in the sale of any securities in respect of which this prospectus is being delivered, we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The price to the public of such securities and the net proceeds
we expect to receive from any such sale will also be included in a prospectus supplement.
The aggregate market value of our outstanding common stock held by non-affiliates was approximately $17,887,017 which was calculated based on 45,982,047 shares of outstanding common stock held by non-affiliates as of
August 9, 2019, and a price per share of $0.389, the closing price of our common stock on June 17, 2019. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities pursuant to this registration statement with a value more
than one-third of the aggregate market value of our common stock held by non-affiliates in any 12-month period, so long as the aggregate market value of our common stock held by non-affiliates is less than $75.0 million. In the event that subsequent to
the effective date of this registration statement, the aggregate market value of our outstanding common stock held by non-affiliates equals or exceeds $75.0 million, then the one-third limitation on sales shall not apply to additional sales made
pursuant to this registration statement. We have sold no securities pursuant to General Instruction I.B.6 of Form S-3 during the 12 calendar months prior to, and including, the date of this registration statement.
Investing in our securities involves various risks. See “Risk Factors” contained herein for more information on these risks. Additional risks will be described
in the related prospectus supplements under the heading “Risk Factors.” You should review that section of the related prospectus supplements for a discussion of matters that investors in our securities should
consider.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacy or accuracy of this prospectus or any
accompanying prospectus supplement. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2019.
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this shelf registration statement, we may sell from
time to time in one or more offerings of common stock and preferred stock, various series of debt securities and/or warrants to purchase any of such securities, either individually or as units comprised of a combination of one or more of the other
securities in one or more offerings up to a total dollar amount of $25,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell any type or series of securities under this prospectus, we will
provide a prospectus supplement that will contain more specific information about the terms of that offering.
This prospectus does not contain all of the information included in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the registration statement, including
its exhibits. We may add, update or change in a prospectus supplement or free writing prospectus any of the information contained in this prospectus or in the documents we have incorporated by reference into this prospectus. We may also authorize one
or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. This prospectus, together with the applicable prospectus supplement, any related free writing prospectus and the documents
incorporated by reference into this prospectus and the applicable prospectus supplement, will include all material information relating to the applicable offering. You should carefully read both this prospectus and the applicable prospectus supplement
and any related free writing prospectus, together with the additional information described under “Where You Can Find More Information,” before buying any of the securities being offered.
We have not authorized any dealer, agent or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus, any accompanying prospectus
supplement or any related free writing prospectus that we may authorize to be provided to you. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or an accompanying prospectus
supplement, or any related free writing prospectus that we may authorize to be provided to you. This prospectus, the accompanying prospectus supplement and any related free writing prospectus, if any, do not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the registered securities to which they relate, nor do this prospectus, the accompanying prospectus supplement or any related free writing prospectus, if any, constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus, any applicable
prospectus supplement or any related free writing prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date
of the document incorporated by reference (as our business, financial condition, results of operations and prospects may have changed since that date), even though this prospectus, any applicable prospectus supplement or any related free writing
prospectus is delivered or securities are sold on a later date.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus were made solely for the
benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This prospectus may not be used to consummate sales of our securities, unless it is accompanied by a prospectus supplement. To the extent there are inconsistencies between any prospectus supplement, this prospectus and any
documents incorporated by reference, the document with the most recent date will control.
As permitted by the rules and regulations of the SEC, the registration statement, of which this prospectus forms a part, includes additional information not contained in this prospectus. You may read the registration
statement and the other reports we file with the SEC at the SEC’s web site or at the SEC’s offices described below under the heading “Where You Can Find Additional Information.”
Company References
In this prospectus “the Company,” “we,” “us,” and “our” refer to AMERI Holdings Inc., and its subsidiaries together, unless the context indicates otherwise.
SUMMARY
We specialize in delivering SAP cloud, digital and enterprise services to clients worldwide. SAP is a leader in providing enterprise resource planning (“ERP”) software and
technologies to enterprise customers worldwide. We deliver a wide range of solutions and services across multiple domains and industries. Our services center around SAP and include technology consulting, business intelligence, cloud services,
application development/integration and maintenance, implementation services, infrastructure services, and independent validation services, all of which can be delivered as a set of managed services or on an on-demand service basis, or a combination of
both.
Our SAP focus allows us to provide technological solutions to a broad base of clients. We are headquartered in Suwanee, Georgia, and have offices across the United States, which
are supported by offices in India and Canada. Our model inverts the conventional global delivery model wherein offshore information technology (“IT”) service providers are based abroad and maintain a minimal presence in the United States. With a strong
SAP focus, our client partnerships anchor around SAP cloud and digital services. In 2018, we signed a strategic partnership agreement with Google Cloud to offer SAP S/4 HANA (a next generation enterprise system) migration services. This partnership
will allow us to offer our clients a broader spectrum of services.
Our primary business objective is to provide our clients with a competitive advantage by enhancing their business capabilities and technologies with our expanding consulting services
portfolio. Our strategic acquisitions allow us to bring global service delivery, SAP S/4 HANA, SAP Business Intelligence, SAP Success Factors, SAP Hybris and high-end SAP consulting capabilities to a broader geographic market and customer base. We
continue to leverage our growing geographical footprint and technical expertise to simultaneously expand our service and product offering. Our goal is to identify business synergies that will allow us to bring new services and products from one
subsidiary to customers at our other subsidiaries. While we generate revenues from the consulting businesses of each of our acquired subsidiaries, we believe that additional revenues will be generated through new business relationships and services
developed through our business combinations.
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 our completion of
a “reverse merger” transaction on May 26, 2015, in which we caused Ameri100 Acquisition, Inc., a Delaware corporation and our newly created, wholly owned subsidiary, to be merged with and into Ameri and Partners Inc. (“Ameri and Partners”), a
Delaware corporation (the “Merger”). As a result of the Merger, Ameri and Partners became our wholly owned subsidiary with Ameri and Partners’ former stockholders acquiring a majority of the outstanding shares of our common stock. The Merger was
consummated under Delaware law, pursuant to an Agreement of Merger and Plan of Reorganization, dated as of May 26, 2015 (the “Merger Agreement”), and in connection with the Merger we changed our name to AMERI Holdings, Inc. and do business under the
brand name “Ameri100”.
Ameri Holdings, Inc., along with its eleven subsidiaries, Ameri and Partners, Ameri Consulting Service Private Ltd., Ameri100 Georgia Inc. (“Ameri Georgia”), Bellsoft India Solutions
Private Ltd., Ameri100 Canada Inc. (formerly BSI Global IT Solutions Inc.), Linear Logics, Corp., Ameri100 Virtuoso Inc. (“Virtuoso”), Ameri100 Arizona LLC (“Ameri Arizona”), Bigtech Software Private Limited (“Bigtech”), Ameri100 California Inc.
(“Ameri California) and Ameritas Technologies India Private Limited, provides SAP cloud, digital and enterprise services to clients worldwide.
We operate in an intensely competitive IT outsourcing services industry, which competes on quality, service and costs. Though we are able to differentiate our company on all of these
axes, our India-based capabilities ensure that labor arbitrage is our fundamental differentiator. Most offshore IT services providers have undertaken a “forward integration” to boost their capabilities and presence in their client geographies (large
offshore presence with a small local presence). Conversely, large U.S. system integrators focus on “backward integration” to scale and boost their offshore narrative (offshore being the “back office” for the local operations). Today, the IT services
industry is marked by the following characteristics:
The SAP Industry
SAP as an ERP and Cloud product has become an industry by itself. The core SAP enterprise offering has been reinforced with cloud-based products that make the entire SAP ecosystem
extremely attractive from our perspective due to the following attributes:
Our Approach
Our solutions deliver significant business efficiency outcomes through turnkey projects, consulting and offshore services. We believe that our strategic service portfolio, deep industry experience and
strong global talent pool offer a compelling proposition to clients. In 2017 we acquired ATCG Technology Solutions, Inc., which has become our wholly-owned subsidiary Ameri California. In 2016, we acquired three companies: Virtuoso, L.L.C. and DC&M Partners, L.L.C.in the U.S. (now Virtuoso and Ameri Arizona, respectively) and Bigtech in India. These strategic acquisitions have brought offshore
delivery, SAP S/4 HANA, SAP SuccessFactors, SAP Hybris and high-end SAP consulting capabilities to our service portfolio.
Our Portfolio of Service Offerings
Our portfolio of service offerings expanded significantly since 2016 with our acquisitions of Ameri Georgia, Ameri Arizona, Ameri California, Virtuoso and Bigtech.
Our current portfolio of services is divided into three categories:
Cloud Services
An increasing trend in the IT services market is the adoption of cloud services. Historically, clients have resorted to on-premise software solutions, which required capital
investments in infrastructure and data centers. Cloud services enable clients to build and host their applications at much lower costs. Our services offerings leverage the low cost and flexibility of cloud computing.
We have expertise in deploying SAP’s public, private and hybrid cloud services, as well as SAP S/4 HANA, SAP SuccessFactors and SAP Hybris cloud migration services. Our teams are
experienced in the rapid delivery of cloud services. We perform SAP application and cloud support and SAP cloud development. Additionally, we provide cloud automation solutions that focus on business objectives and organizational growth.
Digital Services
We have developed several cutting-edge mobile solutions, including Simple Advance Planning and Optimization (“APO”) and SAP IBP/S&OP Mobile Analytics App. The Simple APO
mobile application (app) provides sales professionals with real-time collaboration capabilities and customer data, on their mobile devices. It increases the efficiency of the sales process and the accuracy of customer needs forecasting. The
SAP IBP mobile app enables the real-time management and analysis of sales and operations planning (S&OP) related data from mobile devices. SAP is an implementation partner for this app. SAP has recognized the app’s value to the ecosystem,
as S&OP apps are complex and difficult to design.
We are also active in robotic process automation (“RPA”), which leverages the capability of artificially intelligent software agents for business process automation. We have
expertise in automating disparate and redundant data entry tasks by configuring software robots that seamlessly integrate with existing software systems. We also provide RPA solutions for reporting and analysis and deliver insights into
business functions by translating large data into structured reports. Lastly, we have a working partnership with Blue Prism, a leading RPA solutions provider, which makes it possible for us to automate up to one-third of all standard
back-office operations.
Enterprise Services
We design, implement and manage Business Intelligence (“BI”) and analytics solutions. BI helps our clients navigate the market better by identifying new trends and by
targeting top-selling products. We also enable clients to use BI for generating instant financial reports and analytics of customer, product and cost information over time. In addition, we provide solutions for metadata repository,
master data management and data quality. Finally, we determine BI demands across various platforms.
Other key enterprise services that we offer include consulting services for global and regional SAP implementations, SAP/IT solution advisory and architectural services,
project management services, IT/ERP strategy and vendor selection services. Often clients have relied on us to deliver services in non-SAP packages, as well.
Strategy
The integration of each of our acquisitions into our business enterprise requires establishing our company’s standard operating procedures at each acquired entity,
seamlessly transitioning each acquired entity’s branding to the “Ameri100” brand and assessing any necessity to transition account management. The integration process also requires us to evaluate any product-line expansions made
possible by the acquired entity and how to bring new product lines to the broader customer base of the entire Company. With the integration of each acquisition, we face challenges of maintaining cross-company visibility and
cooperation, creating a cohesive corporate culture, handling unexpected customer reactions and changes and aligning the interests of the acquired entity’s leadership with the interests of the Company.
Sales and Marketing
We combine traditional sales with our strength in industries and technology. Our sales function is composed of direct sales and inside sales professionals. Both
work closely with our solutions directors to identify potential opportunities within each account. We currently have over 100+ active clients. Using a consultative selling methodology (working with clients to prescribe a solution
that suits their need in terms of efficiency, cost and timelines), target prospects are identified and a pursuit plan is developed for each key account. We utilize a blended sales model that combines consultative selling with
traditional sales methods. Once the customer has engaged us, the sales, solutions and marketing teams monitor and manage the relationship with the help of customer relationship management software.
Our marketing strategy is to build a strong, sustainable brand image for our company, position us in the SAP arena and facilitate business opportunities. We use a variety of marketing
programs across traditional and social channels to target our prospective and current customers, including webinars, targeted email campaigns, co-sponsoring customer events with SAP to create customer and prospect awareness, search engine marketing
and advertising to drive traffic to our web properties, and website development to engage and educate prospects and generate interest through white papers, case studies and marketing collateral.
Revenues and Customers
We generate revenue primarily through consulting services performed in the fulfillment of written service contracts. The service contracts we enter into generally fall into two
categories: (1) time-and-materials contracts and (2) fixed-price contracts.
When a customer enters into a time-and-materials or fixed-price, (or a periodic retainer-based) contract, we recognize revenue in accordance with an evaluation of the deliverables
in each contract. If the deliverables represent separate units of accounting, we then measure and allocate the consideration from the arrangement to the separate units, based on vendor-specific objective evidence of the value for each
deliverable.
The revenue under time-and-materials contracts is recognized as services are rendered and performed at contractually agreed upon rates. Revenue pursuant to fixed-price contracts
is recognized under the proportional performance method of accounting. We routinely evaluate whether revenue and profitability should be recognized in the current period. We estimate the proportional performance on our fixed-price contracts on a
monthly basis utilizing hours incurred to date as a percentage of total estimated hours to complete the project.
For the twelve months ended December 31, 2018 and December 31, 2017, sales to five major customers accounted for approximately 39% and 43% of our total revenue, respectively.
Technology Research and Development
We regard our services and solutions and related software products as proprietary. We rely primarily on a combination of copyright, trademark and trade secret laws of general
applicability, employee confidentiality and invention assignment agreements, distribution and software protection agreements and other intellectual property protection methods to safeguard our technology and software products. We have not
applied for patents on any of our technology. We also rely upon our efforts to design and produce new applications and upon improvements to existing software products to maintain a competitive position in the marketplace.
We did not make any material expenditures on research or development activities for the twelve months ended December 31, 2018 and December 31, 2017.
Strategic Alliances
Through our Lean Enterprise Architecture Partnership (“LEAP”) methodology, we have strategic alliances with technology specialists who perform services on an as-needed basis
for clients. We partner with niche specialty firms globally to obtain specialized resources to meet client needs. Our business partners include executive recruiters, staffing firms and niche technology companies. The terms of each strategic
alliance arrangement depend on the nature of the particular partnership. Such alliance arrangements typically set forth deliverables, scope of the services to be delivered, costs of services and terms and conditions of payment (generally 45
to 90 days for payment to be made). Each alliance arrangement also typically includes terms for indemnification of our company, non-solicitation of each partner’s employees by the other partner and dispute resolution by arbitration.
Alliances and partnerships broaden our offerings and make us a one-stop solution for clients. Our team constantly produces services that complement our portfolio and build
strategic partnerships. Our partner companies range from digital marketing strategy consulting firms to large infrastructure players.
On any given project we evaluate a client’s needs and make our best effort to meet them with our full-time specialists. However, in certain circumstances, we may need to go outside
the Company, and in this case we approach our strategic partners to tap into their pools of technology specialists. Project teams are usually composed of a mix of our full time employees and outside technology specialists. Occasionally, a project
team may consist of a Company manager and a few outside technology specialists. While final accountability for any of our projects rests with the Company, the outside technology specialists are incentivized to successfully complete a project with
project completion payments that are in addition to hourly billing rates we pay the outside technology specialists.
Competition
The large number of competitors and the speed of technology change make IT services and outsourcing a challenging business. Competitors in this market include systems integration
firms, contract programming companies, application software companies, traditional large consulting firms, professional services groups of computer equipment companies and facilities management and outsourcing companies. Examples of our competitors
in the IT services industry include Accenture, Cartesian Inc., Cognizant, Hexaware Technologies Limited, Infosys Technologies Limited, Mindtree Limited, RCM Technologies Inc., Tata Consultancy Services Limited, Virtusa, Inc. and Wipro Limited.
We believe that the principal factors for success in the IT services and outsourcing market include performance and reliability; quality of technical support, training and services;
responsiveness to customer needs; reputation and experience; financial stability and strong corporate governance; and competitive pricing.
Some of our competitors have significantly greater financial, technical and marketing resources and/or greater name recognition, but we believe we are well positioned to capitalize
on the following competitive strengths to achieve future growth:
The Securities We May Offer
We may offer shares of our common stock and preferred stock, various series of debt securities and warrants to purchase any of such securities, either individually or in units, from time to time under this prospectus,
together with any applicable prospectus supplement and related free writing prospectus, at prices and on terms to be determined by market conditions at the time of offering. If we issue any debt securities at a discount from their original stated
principal amount, then, for purposes of calculating the total dollar amount of all securities issued under this prospectus, we will treat the initial offering price of the debt securities as the total original principal amount of the debt securities.
Each time we offer securities under this prospectus, we will provide offerees with a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities being offered, including, to the extent applicable:
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A prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update, or change information contained in this prospectus or in documents we have incorporated by
reference. However, no prospectus supplement or free writing prospectus will offer a security that is not registered and described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus is a part.
We may sell the securities to or through underwriters, dealers or agents or directly to purchasers. We, as well as any agents acting on our behalf, reserve the sole right to accept and to reject in whole or in part any
proposed purchase of securities. Each prospectus supplement will set forth the names of any underwriters, dealers or agents involved in the sale of securities described in that prospectus supplement and any applicable fee, commission or discount
arrangements with them, details regarding any over-allotment option granted to them, and net proceeds to us. The following is a summary of the securities we may offer with this prospectus.
Common Stock
We currently have authorized 100,000,000 shares of common stock, par value $0.01 per share. As of August 9, 2019, 52,417,688 shares of common stock were issued and outstanding. We may offer shares of our common stock
either alone or underlying other registered securities convertible into or exercisable for our common stock. Holders of our common stock are entitled to such dividends as our board of directors (the “Board of Directors” or “Board”) may declare from
time to time out of legally available funds, subject to the preferential rights of the holders of any shares of our preferred stock that are outstanding or that we may issue in the future. Currently, we do not pay any dividends on our common stock.
Each holder of our common stock is entitled to one vote per share. In this prospectus, we provide a general description of, among other things, the rights and restrictions that apply to holders of our common stock.
Preferred Stock
We currently have authorized 1,000,000 shares of preferred stock, par value $0.01. 700,000 shares are designated as Series A Convertible Preferred Stock, of which 424,938 shares are outstanding as of August 9, 2019. Any
authorized and undesignated shares of preferred stock may be issued from time to time in one or more additional series pursuant to a resolution or resolutions providing for such issue duly adopted by our Board of Directors (authority to do so being
hereby expressly vested in the Board of Directors). The Board of Directors is further authorized, subject to limitations prescribed by law, to fix by resolution or resolutions the designations, powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, of any wholly unissued series of preferred stock, including without limitation authority to fix by resolution or resolutions the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of
redemption (including sinking fund provisions), redemption price or prices, and liquidation preferences of any such series, and the number of shares constituting any such series and the designation thereof, or any of the foregoing.
The rights, preferences, privileges, and restrictions granted to or imposed upon any series of preferred stock that we offer and sell under this prospectus and applicable prospectus supplements will be set forth in a
certificate of designation relating to the series. We will incorporate by reference into the registration statement of which this prospectus is a part the form of any certificate of designation that describes the terms of the series of preferred stock
we are offering before the issuance of shares of that series of preferred stock. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of preferred stock being
offered, as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.
Debt Securities
We may offer general debt obligations, which may be secured or unsecured, senior or subordinated, and convertible into shares of our common stock. In this prospectus, we refer to the senior debt securities and the
subordinated debt securities together as the “debt securities.” We may issue debt securities under a note purchase agreement or under an indenture to be entered between us and a trustee and forms of the senior and subordinated indentures are included
as an exhibit to the registration statement of which this prospectus is a part. The indentures do not limit the amount of securities that may be issued under it and provides that debt securities may be issued in one or more series. The senior debt
securities will have the same rank as all of our other indebtedness that is not subordinated. The subordinated debt securities will be subordinated to our senior debt on terms set forth in the applicable prospectus supplement. In addition, the
subordinated debt securities will be effectively subordinated to creditors and preferred stockholders of our subsidiaries. Our Board of Directors will determine the terms of each series of debt securities being offered. This prospectus contains only
general terms and provisions of the debt securities. The applicable prospectus supplement will describe the particular terms of the debt securities offered thereby. You should read any prospectus supplement and any free writing prospectus that we may
authorize to be provided to you related to the series of debt securities being offered, as well as the complete note agreements and/or indentures that contain the terms of the debt securities. Forms of indentures have been filed as exhibits to the
registration statement of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of debt securities being offered will be incorporated by reference into the registration statement of which this
prospectus is a part from reports we file with the SEC.
Warrants
We may offer warrants for the purchase of shares of our common stock or preferred stock or of debt securities. We may issue the warrants by themselves or together with common stock, preferred stock or debt securities, and
the warrants may be attached to or separate from any offered securities. Any warrants issued under this prospectus may be evidenced by warrant certificates. Warrants may be issued under a separate warrant agreement to be entered into between us and
the investors or a warrant agent. Our Board of Directors will determine the terms of the warrants. This prospectus contains only general terms and provisions of the warrants. The applicable prospectus supplement will describe the particular terms of
the warrants being offered thereby. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of warrants being offered, as well as the complete warrant agreements that
contain the terms of the warrants. Specific warrant agreements will contain additional important terms and provisions and will be incorporated by reference into the registration statement of which this prospectus is a part from reports we file with the
SEC.
Units
We may offer units consisting of our common stock or preferred stock, debt securities and/or warrants to purchase any of these securities in one or more series. We may evidence each series of units by unit certificates
that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of the unit agent in the applicable prospectus
supplement relating to a particular series of units. This prospectus contains only a summary of certain general features of the units. The applicable prospectus supplement will describe the particular features of the units being offered thereby. You
should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete unit agreements that contain the terms of the units. Specific unit
agreements will contain additional important terms and provisions and will be incorporated by reference into the registration statement of which this prospectus is a part from reports we file with the SEC.
An investment in our securities involves a high degree of risk. This prospectus contains, and the prospectus supplement applicable to each offering of our securities will contain, a discussion of the risks applicable to an
investment in our securities. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the heading “Risk Factors” in this prospectus and
the applicable prospectus supplement, together with all of the other information contained or incorporated by reference in the prospectus supplement or appearing or incorporated by reference in this prospectus. You should also consider the risks,
uncertainties and assumptions discussed under Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as amended, and any updates described in our Quarterly
Reports on Form 10-Q, all of which are incorporated herein by reference, and may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future and any prospectus supplement related to a particular
offering. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any of these
known or unknown risks might cause you to lose all or part of your investment in the offered securities.
FORWARD-LOOKING STATEMENTS
This prospectus and any accompanying prospectus supplement, including the documents that we incorporate by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this prospectus and any accompanying prospectus supplement about our expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,”
“intend,” “plan,” and “would.” For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future
management and organizational structure are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of
activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement.
You should read this prospectus and any accompanying prospectus supplement and the documents that we reference herein and therein and have filed as exhibits to the registration statement, of which this prospectus is part,
completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this prospectus and any accompanying prospectus supplement is accurate as of the
date on the front cover of this prospectus or such prospectus supplement only. Because the risk factors referred to in this prospectus and incorporated herein by reference could cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no
obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for
us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements. We qualify all of the information presented in this prospectus and any accompanying prospectus supplement, and particularly our forward-looking statements, by these cautionary statements.
Except as described in any prospectus supplement and any free writing prospectus in connection with a specific offering, we currently intend to use the net proceeds from the sale of the securities offered under this
prospectus for general corporate purposes, including the development and commercialization of our products, research and development, general and administrative expenses, license or technology acquisitions, and working capital and capital expenditures.
We may also use the net proceeds to repay any debts and/or invest in or acquire complementary businesses, products, or technologies, although we have no current commitments or agreements with respect to any such investments or acquisitions as of the
date of this prospectus. We have not determined the amount of net proceeds to be used specifically for the foregoing purposes. As a result, our management will have broad discretion in the allocation of the net proceeds and investors will be relying on
the judgment of our management regarding the application of the proceeds of any sale of the securities. Pending use of the net proceeds, we intend to invest the proceeds in short-term, investment-grade, interest-bearing instruments.
Each time we offer securities under this prospectus, we will describe the intended use of the net proceeds from that offering in the applicable prospectus supplement. The actual amount of net proceeds we spend on a
particular use will depend on many factors, including, our future capital expenditures, the amount of cash required by our operations, and our future revenue growth, if any. Therefore, we will retain broad discretion in the use of the net proceeds.
DESCRIPTION OF CAPITAL STOCK
General
The following description of our capital stock, together with any additional information we include in any applicable prospectus supplement or any related free writing prospectus, summarizes the material terms and
provisions of our common stock and the preferred stock that we may offer under this prospectus. While the terms we have summarized below will apply generally to any future common stock or preferred stock that we may offer, we will describe the
particular terms of any class or series of these securities in more detail in the applicable prospectus supplement. For the complete terms of our common stock and preferred stock, please refer to our amended and restated certificate of incorporation,
as amended and our bylaws that are incorporated by reference into the registration statement of which this prospectus is a part or may be incorporated by reference in this prospectus or any applicable prospectus supplement. The terms of these
securities may also be affected by Delaware General Corporation Law (the “DGCL”). The summary below and that contained in any applicable prospectus supplement or any related free writing prospectus are qualified in their entirety by reference to our
amended and restated certificate of incorporation, as amended, and our bylaws.
As of the date of this prospectus, our authorized capital stock consisted of 100,000,000 shares of common stock, $0.01 par value per share, and 1,000,000 shares of preferred stock, $0.01 par value per share. Our Board may
establish the rights and preferences of the preferred stock from time to time.
Common Stock
We are authorized to issue up to a total of 100,000,000 shares of common stock, par value $0.01 per share. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of our
stockholders. Holders of our common stock have no cumulative voting rights. All shares of common stock offered hereby will, when issued, be fully paid and nonassessable, including shares of common stock issued upon the exercise of common stock warrants
or subscription rights, if any.
Further, holders of our common stock have no preemptive or conversion rights or other subscription rights. Upon our 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. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of our common stock are
entitled to receive dividends, if any, as may be declared from time to time by our Board of Directors out of our assets which are legally available. Such dividends, if any, are payable in cash, in property or in shares of capital stock.
The holders of a majority of the shares of our capital stock, represented in person or by proxy, are necessary to constitute a quorum for the transaction of business at any meeting. If a quorum is present, an action by
stockholders entitled to vote on a matter is approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, with the exception of the election of directors, which requires a plurality of the
votes cast.
Preferred Stock
Our board of directors has the authority, without further action by the stockholders, to issue up to 1,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges,
and relative participating, optional, or special rights as well as the qualifications, limitations, or restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences,
any or all of which may be greater than the rights of the common stock. Our board of directors, without stockholder approval, can issue convertible preferred stock with voting, conversion, or other rights that could adversely affect the voting power
and other rights of the holders of common stock. Preferred stock could be issued quickly with terms calculated to delay or prevent a change of control or make removal of management more difficult. Additionally, the issuance of preferred stock may have
the effect of decreasing the market price of our common stock, and may adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to issue any shares of preferred stock following this offering.
Anti-Takeover Effects of Certain Provisions of our Certificate of Incorporation, Bylaws and the DGCL
Pursuant to our Certificate of Incorporation, we are not subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers through a “business combination” with
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”).
Listing
Our common stock is listed on The Nasdaq Capital Market under the trading symbol “AMRH.”
Transfer Agent and Registrar
The Transfer Agent and Registrar for our common stock is Corporate Stock Transfer, Inc.
DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any applicable prospectus supplements or free writing prospectuses, summarizes the material terms and provisions of the debt securities that
we may offer under this prospectus. We may issue debt securities, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized below will apply generally to any future
debt securities we may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement or free writing prospectus. The terms of any debt securities we
offer under a prospectus supplement may differ from the terms we describe below. However, no prospectus supplement shall fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in
this prospectus at the time of its effectiveness. As of the date of this prospectus, we have no outstanding registered debt securities. Unless the context requires otherwise, whenever we refer to the “indentures,” we also are referring to any
supplemental indentures that specify the terms of a particular series of debt securities.
We will issue any senior debt securities under the senior indenture that we will enter into with the trustee named in the senior indenture. We will issue any subordinated debt securities under the subordinated indenture
and any supplemental indentures that we will enter into with the trustee named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement, of which this prospectus is a part, and supplemental
indentures and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference from reports that we file
with the SEC.
The indentures will be qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). We use the term “trustee” to refer to either the trustee under the senior indenture or the trustee under the
subordinated indenture, as applicable.
The following summaries of material provisions of the senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference to, all of the provisions of
the indenture and any supplemental indentures applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements and any related free writing prospectuses related to the debt securities that we may offer
under this prospectus, as well as the complete indentures that contains the terms of the debt securities. Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.
General
The terms of each series of debt securities will be established by or pursuant to a resolution of our Board of Directors and set forth or determined in the manner provided in an officers’ certificate or by a supplemental
indenture. Debt securities may be issued in separate series without limitation as to aggregate principal amount. We may specify a maximum aggregate principal amount for the debt securities of any series. We will describe in the applicable prospectus
supplement the terms of the series of debt securities being offered, including:
Conversion or Exchange Rights
We will set forth in the applicable prospectus supplement the terms under which a series of debt securities may be convertible into or exchangeable for our common stock, our preferred stock or other securities
(including securities of a third party). We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our common
stock, our preferred stock or other securities (including securities of a third party) that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the indentures will not contain any covenant that restricts our ability to merge or consolidate, or sell,
convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquirer of such assets must assume all of our obligations under the indentures or the debt securities, as appropriate. If the debt
securities are convertible into or exchangeable for our other securities or securities of other entities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt
securities into securities that the holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.
Events of Default under the Indenture
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the following are events of default under the indentures with respect to any series of debt securities that
we may issue:
We will describe in each applicable prospectus supplement any additional events of default relating to the relevant series of debt securities.
If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal, premium, if any, and accrued interest, if any, due
and payable immediately. If an event of default arises due to the occurrence of certain specified bankruptcy, insolvency or reorganization events, the unpaid principal, premium, if any, and accrued interest, if any, of each issue of debt securities
then outstanding shall be due and payable without any notice or other action on the part of the trustee or any holder.
The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences, except defaults or
events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indentures, if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under such indenture at
the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the trustee reasonable indemnity or security satisfactory to it against any loss, liability or expense. The holders of a
majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred
on the trustee, with respect to the debt securities of that series, provided that:
The indentures will provide that if an event of default has occurred and is continuing, the trustee will be required in the exercise of its powers to use the degree of care that a prudent person would use in the
conduct of its own affairs. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture, or that the trustee determines is unduly prejudicial to the rights of any other holder of the relevant series of debt
securities, or that would involve the trustee in personal liability. Prior to taking any action under the indentures, the trustee will be entitled to indemnification against all costs, expenses and liabilities that would be incurred by taking or
not taking such action.
A holder of the debt securities of any series will have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies only if:
These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities, or other defaults that may be
specified in the applicable prospectus supplement.
We will periodically file statements with the trustee regarding our compliance with specified covenants in the indentures.
The indentures will provide that if a default occurs and is continuing and is actually known to a responsible officer of the trustee, the trustee must mail to each holder notice of the default within the earlier of 90
days after it occurs and 30 days after it is known by a responsible officer of the trustee or written notice of it is received by the trustee, unless such default has been cured or waived. Except in the case of a default in the payment of principal
or premium of, or interest on, any debt security or certain other defaults specified in an indenture, the trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee
of directors, or responsible officers of the trustee, in good faith determine that withholding notice is in the best interests of holders of the relevant series of debt securities.
Modification of Indenture; Waiver
Subject to the terms of the indenture for any series of debt securities that we may issue, we and the trustee may change an indenture without the consent of any holders with respect to the following specific matters:
In addition, under the indentures, the rights of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least a majority in aggregate principal amount
of the outstanding debt securities of each series that is affected. However, subject to the terms of the indenture for any series of debt securities that we may issue or otherwise provided in the prospectus supplement applicable to a particular
series of debt securities, we and the trustee may only make the following changes with the consent of each holder of any outstanding debt securities affected:
Discharge
Each indenture provides that, subject to the terms of the indenture and any limitation otherwise provided in the prospectus supplement applicable to a particular series of debt securities, we may elect to be discharged
from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:
In order to exercise our rights to be discharged, we will deposit with the trustee money or government obligations sufficient to pay all the principal of, and any premium and interest on, the debt securities of the
series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000 and any integral
multiple thereof. The indentures will provide that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another
depositary named by us and identified in a prospectus supplement with respect to that series. See “Legal Ownership of Securities” below for a further description of the terms relating to any book-entry
securities.
At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of the debt securities of any series
can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present the debt securities for exchange
or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by
us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will make no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other
governmental charges.
We will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities. We may at any time
designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for
the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
Information Concerning the Trustee
The trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable indenture and is under no
obligation to exercise any of the powers given it by the indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur. However,
upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities, or one or
more predecessor securities, are registered at the close of business on the regular record date for the interest payment.
We will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate in the applicable
prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate the corporate trust
office of the trustee as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a
particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the Trust Indenture Act is applicable.
Ranking Debt Securities
The subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain other indebtedness to the extent described in a prospectus supplement. The subordinated indenture
does not limit the amount of subordinated debt securities that we may issue. It also does not limit us from issuing any other secured or unsecured debt.
The senior debt securities will be unsecured and will rank equally in right of payment to all our other senior unsecured debt. The senior indenture does not limit the amount of senior debt securities that we may issue.
It also does not limit us from issuing any other secured or unsecured debt.
The following description, together with the additional information we may include in any applicable prospectus supplements and free writing prospectuses, summarizes the material terms and provisions of the warrants
that we may offer under this prospectus, which may consist of warrants to purchase common stock, preferred stock or debt securities and may be issued in one or more series. Warrants may be offered independently or together with common stock,
preferred stock or debt securities offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have summarized below will apply generally to any warrants that we may offer under this
prospectus, we will describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus. The terms of any warrants offered under a prospectus
supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the
time of its effectiveness.
We may issue the warrants under a warrant agreement that we will enter into with a warrant agent to be selected by us. If selected, the warrant agent will act solely as an agent of ours in connection with the warrants
and will not act as an agent for the holders or beneficial owners of the warrants. If applicable, we will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a Current Report on
Form 8-K that we file with the SEC, the form of warrant agreement, including a form of warrant certificate, that describes the terms of the particular series of warrants we are offering before the issuance of the related series of warrants. The
following summaries of material provisions of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement and warrant certificate applicable to a particular
series of warrants. We urge you to read the applicable prospectus supplement and any applicable free writing prospectus related to the particular series of warrants that we sell under this prospectus, as well as the complete warrant agreements and
warrant certificates that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplement the terms relating to a series of warrants, including:
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Unless we
otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant agent
in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be
required to deliver to us or the warrant agent as applicable.
Upon receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus
supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of
warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
If selected, each warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single bank or
trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to
initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to
exercise, and receive the securities purchasable upon exercise of, its warrants.
The following description, together with the additional information we may include in any applicable prospectus supplements and free writing prospectuses, summarizes the material terms and provisions of the units that
we may offer under this prospectus.
While the terms we have summarized below will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable
prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a
security that is not registered and described in this prospectus at the time of its effectiveness.
We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a Current Report on Form 8-K that we file with the SEC, the form of unit agreement that
describes the terms of the series of units we are offering, and any supplemental agreements, before the issuance of the related series of units. The following summaries of material terms and provisions of the units are subject to, and qualified in
their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable to a particular series of units. We urge you to read the applicable prospectus supplements related to the particular series of units
that we sell under this prospectus, as well as the complete unit agreement and any supplemental agreements that contain the terms of the units.
General
We may issue units comprised of one or more debt securities, shares of common stock, shares of preferred stock and warrants in any combination. Each unit will be issued so that the holder of the unit is also the holder
of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any time before a specified date.
We will describe in the applicable prospectus supplement the terms of the series of units, including:
The provisions described in this section, as well as those described under “Description of Capital Stock,” “Description of Debt Securities”
and “Description of Warrants” will apply to each unit and to any common stock, preferred stock, debt security or warrant included in each unit, respectively.
Unit Agent
The name and address of the unit agent, if any, for any units we offer will be set forth in the applicable prospectus supplement.
Issuance in Series
We may issue units in such amounts and in numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single bank or trust company may act
as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at law or
otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in the unit.
We, the unit agents and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise
the rights attaching to the units so requested, despite any notice to the contrary. See “Legal Ownership of Securities.”
LEGAL OWNERSHIP OF SECURITIES
We can issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail below. We refer to those persons who have securities registered in their own
names on the books that we or any applicable trustee or depositary or warrant agent maintain for this purpose as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly
through others, own beneficial interests in securities that are not registered in their own names, as “indirect holders” of those securities. As we discuss below, indirect holders are not legal holders, and investors in securities issued in
book-entry form or in street name will be indirect holders.
Book-Entry Holders
We may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be represented by one or more global securities registered in the name of a
financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial
interests in the securities on behalf of themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that security. Global securities will be registered in the name of the depositary or its participants. Consequently, for global
securities, we will recognize only the depositary as the holder of the securities, and we will make all payments on the securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the
payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a global security will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in
the depositary’s book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect holders, and not legal holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities that are not issued in global form. In these cases, investors may choose to hold their securities in their own names or in “street name.” Securities held by an
investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains at
that institution.
For securities held in street name, we or any applicable trustee or depositary will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the
holders of those securities, and we or any such trustee or depositary will make all payments on those securities to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because
they agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name will be indirect holders, not legal holders, of those securities.
Legal Holders
Our obligations, as well as the obligations of any applicable trustee or third party employed by us or a trustee, run only to the legal holders of the securities. We do not have obligations to investors who hold
beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because we are issuing the securities only in global
form.
For example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with its participants or customers or by
law, to pass it along to the indirect holders but does not do so. Similarly, we may want to obtain the approval of the holders to amend an indenture, to relieve us of the consequences of a default or of our obligation to comply with a particular
provision of an indenture, or for other purposes. In such an event, we would seek approval only from the legal holders, and not the indirect holders, of the securities. Whether and how the legal holders contact the indirect holders is up to the
legal holders.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or other financial institution, either in book-entry form because the securities are represented by one or more global securities or in street name, you should check with
your own institution to find out:
Global Securities
A global security is a security that represents one or any other number of individual securities held by a depositary. Generally, all securities represented by the same global securities will have the same terms.
Each security issued in book-entry form will be represented by a global security that we issue to, deposit with and register in the name of a financial institution or its nominee that we select. The financial
institution that we select for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, The Depository Trust Company, New York, NY, known as DTC, will be the depositary for all securities issued in
book-entry form.
A global security may not be transferred to or registered in the name of anyone other than the depositary, its nominee or a successor depositary, unless special termination situations arise. We describe those
situations below under “— Special Situations When A Global Security Will Be Terminated.” As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and legal holder
of all securities represented by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution
that in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by a global security will not be a legal holder of the security, but only an indirect holder of a beneficial
interest in the global security.
If the prospectus supplement for a particular security indicates that the security will be issued as a global security, then the security will be represented by a global security at all times unless and until the
global security is terminated. If termination occurs, we may issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry clearing system.
Special Considerations For Global Securities
As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to
securities transfers. We do not recognize an indirect holder as a holder of securities and instead deal only with the depositary that holds the global security.
If securities are issued only as global securities, an investor should be aware of the following:
Special Situations When A Global Security Will Be Terminated
In a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates representing those interests. After that exchange, the choice of whether to
hold securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to their own names, so that they will be direct holders. We
have described the rights of holders and street name investors above.
A global security will terminate when the following special situations occur:
The applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of securities covered by the prospectus supplement. When a
global security terminates, the depositary, and neither we, nor any applicable trustee, is responsible for deciding the names of the institutions that will be the initial direct holders.
We may sell the securities being offered hereby in one or more of the following ways from time to time:
As set forth in more detail below, the securities may be distributed from time to time in one or more transactions:
We will set forth in a prospectus supplement the terms of that particular offering of securities, including:
Only underwriters named in an applicable prospectus supplement are underwriters of the securities offered by that prospectus supplement.
If underwriters are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name of each underwriter and the terms of the transaction (including any underwriting
discounts and other terms constituting compensation of the underwriters and any dealers) in a prospectus supplement. The securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly
by one or more investment banking firms or others, as designated. If an underwriting syndicate is used, the managing underwriter(s) will be specified on the cover of the prospectus supplement. If underwriters are used in the sale, the offered
securities will be acquired by the underwriters for their own accounts and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time
of sale. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. Unless otherwise set forth in the prospectus supplement, the obligations of the underwriters to purchase
the offered securities will be subject to conditions precedent and the underwriters will be obligated to purchase all of the offered securities if any are purchased.
We may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering price, with additional underwriting commissions or discounts, as may be set forth in a
related prospectus supplement. The terms of any over-allotment option will be set forth in the prospectus supplement for those securities.
If we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the securities to the dealer, as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the time of resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we will pay the agent
in the prospectus supplement. Unless the prospectus supplement states otherwise, any agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
In connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the common stock for whom they act as agents in the form of discounts, concessions
or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional investors or others that purchase common stock directly and then resell the securities, may be deemed to be underwriters,
and any discounts or commissions received by them from us and any profit on the resale of the common stock by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters
may make with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform services for, us in the ordinary course of business.
We may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. In addition, we may enter into derivative transactions with third parties (including
the writing of options), or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with such a transaction, the third parties may,
pursuant to this prospectus and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others to settle such sales and
may use securities received from us to close out any related short positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an
event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement. The third party in such sale transactions will be an underwriter and will be identified in the applicable
prospectus supplement or in a post-effective amendment.
To facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price of the securities. This may include
over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such persons would cover such over-allotments or short
positions by purchasing in the open market or by exercising the over-allotment option granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open
market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no
representation or prediction as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the price of our securities.
Unless otherwise specified in the applicable prospectus supplement, each class or series of securities will be a new issue with no established trading market, other than our common stock, which is listed on The Nasdaq
Capital Market. We may elect to list any other class or series of securities on any exchange or market, but we are not obligated to do so. It is possible that one or more underwriters may make a market in a class or series of securities, but the
underwriters will not be obligated to do so and may discontinue any market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for any of the securities.
In order to comply with the securities laws of some U.S. states or territories, if applicable, the securities offered pursuant to this prospectus will be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and complied with.
Any underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Overallotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short
covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of
these activities at any time.
Any underwriters who are qualified market makers on The Nasdaq Capital Market may engage in passive market making transactions in the securities on The Nasdaq Capital Market in accordance with Rule 103 of Regulation M,
during the business day prior to the pricing of the offering, before the commencement of offers or sales of the securities. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market
makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security. If all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s
bid must then be lowered when certain purchase limits are exceeded.
The validity of the issuance of the securities offered hereby will be passed upon for us by Sheppard, Mullin, Richter & Hampton LLP, New York, NY. Additional legal matters may be passed upon for us or any
underwriters, dealers or agents, by counsel that we will name in the applicable prospectus supplement.
The financial statements of the Company as of December 31, 2018 and 2017 and for each of the two years in the period ended December 31, 2018 incorporated by reference in this Prospectus have been so incorporated in
reliance on the report of Ram Associates, CPA, an independent registered public accounting firm incorporated herein by reference, given upon their authority as experts in accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3 filed under the Securities Act. As permitted by the SEC’s rules, this prospectus and any prospectus supplement, which form a part of the
registration statement, do not contain all the information that is included in the registration statement. You will find additional information about us in the registration statement. Any statements made in this prospectus or any prospectus
supplement concerning legal documents are not necessarily complete and you should read the documents that are filed as exhibits to the registration statement or otherwise filed with the SEC for a more complete understanding of the document or
matter.
You may read and copy the registration statement, as well as our reports, proxy statements, and other information, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC. The SEC’s Internet site can be found at http://www.sec.gov. You can also obtain copies of materials we file with the SEC from our website found at www.ameri100.com. Information on our website does not constitute a part of, nor is it
incorporated in any way, into this prospectus and should not be relied upon in connection with making an investment decision.
INCORPORATION OF
DOCUMENTS BY REFERENCE
We have filed a registration statement on Form S-3 with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended. This prospectus is part of the registration statement,
however the registration statement includes and incorporates by reference additional information and exhibits. The SEC permits us to “incorporate by reference” the information contained in documents we file with the SEC, which means that we can
disclose important information to you by referring you to those documents rather than by including them in this prospectus. Information that is incorporated by reference is considered to be part of this prospectus and you should read it with the
same care that you read this prospectus. Information that we file later with the SEC will automatically update and supersede the information that is either contained, or incorporated by reference, in this prospectus, and will be considered to be a
part of this prospectus from the date those documents are filed. We have filed with the SEC, and hereby incorporate by reference in this prospectus:
We also incorporate by reference all documents (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) that are subsequently filed
by us with the U.S. Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act prior to the termination of the offering of the securities made by this prospectus (including documents filed after the date
of the initial Registration Statement of which this prospectus is a part and prior to the effectiveness of the Registration Statement). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
and Current Reports on Form 8-K, as well as proxy statements.
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded to the extent that a statement
contained in this prospectus or any subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement.
You may request, and we will provide you with, a copy of these filings, at no cost, by calling us at (770) 935-4152 or by writing to us at the following address:
AMERI Holdings, Inc.
5000 Research Court, Suite 750,
Suwanee, Georgia, 30024
(770) 935-4152
3,007,026
Shares of Common Stock
Prospectus
February
9, 2021
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