COMMITMENTS AND CONTINGENCIES	6 Months Ended
Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 4 – COMMITMENTS AND CONTINGENCIES The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business. Management believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows. *Stockholder Demand Letters* On July 14, 2021, the Company received a stockholder demand letter from the law firm of Rigrodsky Law P.A., on behalf of Matthew Whitfield, a purported stockholder of the Company, alleging that the registration statement (the “Amalgamation Registration Statement”) filed by the Company with the SEC on June 21, 2021 omits material information with respect to the Amalgamation and requesting that the Company and the Company board of directors provide certain corrective disclosures in an amendment or supplement to the Amalgamation Registration Statement. The Company does not believe the request has merit, but made certain changes to the Amalgamation Registration Statement, which it believes suffice to answer the purported stockholder’s demands. On July 22, 2021, the Company received a DGCL Section 220 books and records demand letter from the law firm of Kahn Swick & Foti, on behalf of Scott Waller, a purported stockholder of the Company, seeking access to certain relevant books and records of the Company in connection with the process underlying the Amalgamation (as defined herein) and the Company’s engagement of its financial advisors. The Company does not believe the request has merit, but made certain changes to the Amalgamation Registration Statement, which it believes suffice to answer the purported stockholder’s demands. Enveric Biosciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements *Development and Clinical Supply Agreement* On February 22, 2021, the Company entered into a Development and Clinical Supply Agreement (the “PureForm Agreement”) with PureForm Global, Inc. (“PureForm”), pursuant to which PureForm will be the exclusive provider of synthetic cannabidiol (“API”) for the Company’s development plans for cancer treatment and supportive care. Under the terms of the PureForm Agreement, PureForm has granted the Company the exclusive right to purchase API and related product for cancer treatment and supportive care during the term of the Agreement (contingent upon an initial minimum order of 1 kilogram during the first thirty (30) days from the effective date) and has agreed to manufacture, package and test the API and related product in accordance with specifications established by the parties. All inventions that are developed jointly by the parties in the course of performing activities under the PureForm Agreement will be owned jointly by the parties in accordance with applicable law; however, if the Company funds additional research and development efforts by PureForm, the parties may enter into a further agreement whereby PureForm would assign any resulting inventions or technical information to the Company. The initial term of the PureForm Agreement is three (3) years commencing on the effective date of the Agreement, subject to extension by mutual agreement of the parties. The PureForm Agreement may be terminated by either party upon thirty (30) days written notice of an uncured material breach or immediately in the event of bankruptcy or insolvency. The Agreement contains, among other provisions, representation and warranties, indemnification obligations and confidentiality provisions in favor of each party that are customary for an agreement of this nature. The Company has met the minimum purchase requirement of 1 kilogram during the first thirty days of the PureForm Agreement’s effectiveness. *Appointment of Chief Financial Officer* On April 9, 2021, John M. Van Buiten resigned from his position as the Company’s chief financial officer, effective May 15, 2021. Mr. Van Buiten’s resignation was not the result of any disagreement regarding any matter relating to the Company’s operations, policies, or practices. On April 9, 2021, Carter J. Ward, 56, was appointed as the Company’s chief financial officer, effective May 15, 2021 (the “Ward Effective Date”). In connection with Mr. Ward’s appointment as chief financial officer, Mr. Ward entered into an employment agreement with the Company on April 9, 2021 (the “Ward Employment Agreement”), effective as of May 15, 2021, pursuant to which Mr. Ward will receive a base salary of $295,000 (“Base Salary”) and is eligible to receive annual performance bonuses of up to 50% of his Base Salary, as determined from time-to-time by the Company’s board of directors. Additionally, Mr. Ward will receive 525,000 restricted stock units (“RSUs”), 262,500 of such RSUs shall be subject to time-based vesting (the “Time Based RSUs”), and the remaining 262,500 of such RSUs shall be subject to performance-based vesting (the “Performance RSUs”). The RSUs shall be subject to the terms and conditions of the Company’s 2020 Long-Term Incentive Plan. The Time Based RSUs shall vest in quarters on each anniversary of the Ward Effective Date, and the Performance RSUs shall vest based on the achievement of performance milestones established by the Company. Amalgamation Agreement with MagicMed Industries Inc. On May 24, 2021, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company (“HoldCo”), 1306436 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of HoldCo (“Purchaser”), and MagicMed Industries Inc., a corporation existing under the laws of the Province of British Columbia (“MagicMed”), pursuant to which, among other things, the Company, indirectly through Purchaser, intends to acquire all of the outstanding securities of MagicMed in exchange for securities of the Company by way of an amalgamation under the British Columbia Business Corporations Act, upon the terms and conditions set forth in the Amalgamation Agreement, such that, upon completion of the Amalgamation (as defined herein), the amalgamated corporation (“Amalco”) will be an indirect wholly-owned subsidiary of the Company. Enveric Biosciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements At the effective time of the Amalgamation (the “Effective Time”), holders of outstanding common shares of MagicMed (the “MagicMed Shares”) will receive such number of shares of common stock of the Company (“Company Shares”) representing, together with the Company Shares issuable upon exercise of the Warrants and the Converted Options (each as defined herein), approximately 36.6% of the issued and outstanding Company Shares (on a fully-diluted basis). The MagicMed Shares will initially be converted into Amalco Redeemable Preferred Shares (as defined in the Amalgamation Agreement), which immediately following the Amalgamation shall be redeemed for 0.000001 of a Company Share. Following such redemption, the shareholders of MagicMed shall receive additional Company Shares equal to the product of the Exchange Ratio (as defined in the Amalgamation Agreement) multiplied by the number of MagicMed Shares held by each such shareholder. Additionally, following the Effective Time (i) each outstanding MagicMed stock option will be converted into and become an option to purchase (the “Converted Options”) the number of Company Shares equal to the Exchange Ratio multiplied by the number of MagicMed Shares subject to such MagicMed stock option, and (ii) each holder of an outstanding MagicMed warrant (including Company Broker Warrants (as defined in the Amalgamation Agreement), the “Warrants”) will be entitled to receive upon exercise of such Warrant that number of Company Shares which the holder would have been entitled to receive as a result of the Amalgamation if, immediately prior to the date of the Amalgamation (the “Effective Date”), such holder had been the registered holder of the number of MagicMed Shares to which such holder would have been entitled if such holder had exercised such holder’s Warrants immediately prior to the Effective Time (the foregoing collectively, the “Amalgamation”). The aggregate number of Company Shares that the Company will issue in connection with the Amalgamation (collectively, the “Share Consideration”) will be in excess of 20% of the Company’s pre-transaction outstanding Company Shares. Accordingly, the Company will seek stockholder approval of the issuance of the Share Consideration in the Amalgamation in accordance with the NASDAQ Listing Rules. Pursuant to the terms of the Amalgamation Agreement, the Company has agreed to appoint upon the Effective Time two individuals selected by MagicMed to the Company Board of Directors, Dr. Joseph Tucker and Brad Thompson. The Amalgamation Agreement contains representations and warranties, closing deliveries and indemnification provisions customary for a transaction of this nature. The closing of the Amalgamation is conditioned upon, among other things, (i) the Share Consideration being approved for listing on Nasdaq, (ii) the effectiveness of a Registration Statement on Form S-4 registering the Share Consideration (the “S-4 Registration Statement”) and (iii) the approval (a) of the MagicMed stockholders of the Amalgamation and (b) of the Company’s stockholders of each of the Amalgamation and the issuance of the Share Consideration in the Amalgamation. The Amalgamation Agreement does not permit MagicMed to solicit alternative acquisition proposals from third parties, but it still may, on the terms and subject to the conditions of the Amalgamation Agreement, respond to any unsolicited alternative acquisition proposal that constitutes, or the MagicMed board of directors determines would reasonably be expected to lead to, a Superior Proposal (as defined in the Amalgamation Agreement). The Amalgamation Agreement also contains customary termination provisions for the parties and provides that a termination fee of $4,500,000 is payable by (i) MagicMed, if the Agreement is terminated by (a) the Company as a result of (1) a change in recommendation by the MagicMed board of directors, (2) an approval or recommendation by the MagicMed board of directors of a different acquisition proposal or authorization by the MagicMed board of directors of a Superior Proposal, or (3) a breach of the non-solicit covenant by MagicMed, or (b) MagicMed in order to accept a Superior Proposal; or (ii) the Company, if the Agreement is terminated by (a) MagicMed as a result of (1) a change in recommendation by the Company board of directors, (2) an approval or recommendation by the Company board of directors of a different acquisition proposal or authorization by the Company board of directors of a Superior Proposal or (3) a breach of the non-solicit covenant by the Company, or (b) the Company in order to accept a Superior Proposal. The Amalgamation Agreement may be terminated by either party if the Amalgamation is not completed by December 31, 2021; provided, that either the Company or MagicMed may extend that date for an additional sixty (60) days if the Securities and Exchange Commission has not concluded its review of the S-4 Registration Statement by the date which is sixty (60) days prior to that date. Simultaneously with the execution of the Amalgamation Agreement, holders of approximately 30% of MagicMed’s common shares entered into voting support agreements with the Company, and each of the Company’s directors and executive officers entered into voting support agreements with MagicMed pursuant to which such individuals have agreed, among other things, to execute and deliver a written consent with respect to their respective voting shares in favor of the approval of the Amalgamation Agreement or, if applicable, vote such shares in favor of the adoption of the Amalgamation Agreement at a meeting of stockholders called for such purpose. Enveric Biosciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements Appointment of Chief Executive Officer On May 24, 2021, Dr. Joseph Tucker, 52, entered into an employment agreement (the “Tucker Employment Agreement”) with the Company pursuant to which he will become the Company’s chief executive officer, effective as of the Effective Date (the “Tucker Effective Date”). Dr. Tucker has served as chief executive officer and president of MagicMed since May 2020. From 2019 until 2020, Dr. Tucker acted as the Executive Chairman and Chief Operating Officer of Willow Biosciences Inc. (TSX:WLLW). until leaving to join MagicMed in May 2020. From 2015 to 2019, his principal employment was acting as CEO, President, Director and Founder of Epimeron Inc., which merged with BioCan Technologies Inc. in 2018 and then listed by reverse-takeover with Makena Resources Inc. in 2019 as Willow Biosciences Inc. Dr. Tucker earned a Ph.D. in Biochemistry and Molecular Biology from the University of Calgary. Pursuant to the Tucker Employment Agreement, effective as of the Tucker Effective Date Dr. Tucker will receive a base salary of $350,000 annually (“Tucker Base Salary”). Dr. Tucker will also receive a one-time signing bonus of $100,000 as well as up to 175,000 restricted stock units (“RSUs”), depending on the price of the Company Shares at the Tucker Effective Date. Half of any such RSUs shall be subject to time-based vesting, and the remaining half of any such RSUs shall be subject to performance-based vesting. Beginning in calendar year 2022, Dr. Tucker is eligible to receive annual performance bonuses of up to 75% of the Tucker Base Salary, as determined from time to time by the Company’s board of directors. Additionally, Dr. Tucker will receive 750,000 RSUs as equity compensation. 375,500 of such RSUs shall be subject to time-based vesting (the “Tucker Time Based RSUs”), and the remaining 375,500 of such RSUs shall be subject to performance-based vesting (the “Tucker Performance RSUs”). The RSUs shall be subject to the terms and conditions of the Company’s 2020 Long-Term Incentive Plan (the “LTIP”). The Tucker Time Based RSUs shall vest in quarters on each of the first four anniversaries of the Tucker Effective Date, and the Tucker Performance RSUs shall vest based on the achievement of performance milestones established by the Company. The Tucker Employment Agreement will remain in effect until terminated by either party, unless the Company or Dr. Tucker delivers advance written notice of termination to the other party at least 30 days prior. In addition, the Tucker Employment Agreement is subject to early termination by him or the Company in accordance with the terms of the Tucker Employment Agreement. Pursuant to the Tucker Employment Agreement, if Dr. Tucker’s employment is terminated by the Company without cause or by Dr. Tucker for good reason, then the Company must pay Dr. Tucker, in addition to any then-accrued and unpaid obligations owed to him, 12 months of the then-current Tucker Base Salary. The Tucker Employment Agreement also contains covenants restricting Dr. Tucker from soliciting the Company’s employees or customers for a period of 12 months after the termination of Dr. Tucker’s employment with the Company and prohibiting him from disclosure of confidential information regarding the Company at any time. Please also note that Tucker Employment Agreement requires completion of the amalgamation, as defined in the Amalgamation Agreement and there can be no assurances of such completion being achieved. Appointment of Chief Scientific Officer On May 24, 2021, Dr. Peter Facchini, 57, entered into an employment agreement (the “Facchini Employment Agreement”) with the Company pursuant to which he will become the Company’s chief scientific officer, effective as of the Effective Date (the “Facchini Effective Date”). Enveric Biosciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements Dr. Facchini has served as chief scientific officer of MagicMed since April 2020. From 2019 until 2020, he held the role of Chief Scientific Officer at Willow Biosciences Inc. until leaving to co-found MagicMed. From 2013 until 2019, Dr. Facchini held the role of Chief Scientific Officer, Director and Founder of Epimeron Inc. Dr. Facchini has also been a Professor of Plant Biochemistry in the Department of Biological Sciences at the University of Calgary for 25 years. Pursuant to the Facchini Employment Agreement, effective as of the Facchini Effective Date Dr. Facchini will receive a base salary of C$295,000 annually (“Facchini Base Salary”). Dr. Facchini will also receive a one-time signing bonus of C$50,000 as well as up to 130,000 RSUs, depending on the price of the Company Shares at the Facchini Effective Date. Half of any such RSUs shall be subject to time-based vesting, and the remaining half of any such RSUs shall be subject to performance-based vesting. Beginning in calendar year 2022, Dr. Facchini is eligible to receive annual performance bonuses of up to 50% of the Facchini Base Salary, as determined from time to time by the Company’s board of directors. Additionally, Dr. Facchini will receive 525,000 RSUs as equity compensation. 262,500 of such RSUs shall be subject to time-based vesting (the “Facchini Time Based RSUs”), and the remaining 262,500 of such RSUs shall be subject to performance-based vesting (the “Facchini Performance RSUs”). The RSUs shall be subject to the terms and conditions of the LTIP. The Facchini Time Based RSUs shall vest in quarters on each of the first four anniversaries of the Facchini Effective Date, and the Facchini Performance RSUs shall vest based on the achievement of performance milestones established by the Company. The Facchini Employment Agreement will remain in effect until terminated by either party, unless the Company delivers advance written notice of termination to Dr. Facchini or Dr. Facchini delivers advance written notice of termination to the Company at least 30 days prior. In addition, the Facchini Employment Agreement is subject to early termination by him or the Company in accordance with the terms of the Facchini Employment Agreement. Pursuant to the Facchini Employment Agreement, if Dr. Facchini’s employment is terminated by the Company without cause or by Dr. Facchini for good reason, then the Company must pay Dr. Facchini, in addition to any then-accrued and unpaid obligations owed to him, 12 months of the then-current Facchini Base Salary. The Facchini Employment Agreement also contains covenants restricting Dr. Facchini from soliciting the Company’s employees or customers for a period of 12 months after the termination of Dr. Facchini’s employment with the Company and prohibiting him from disclosure of confidential information regarding the Company at any time. Please also note that Facchini Employment Agreement requires completion of the amalgamation, as defined in the Amalgamation Agreement and there can be no assurances of such completion being achieved. Appointment of Chief Technology Officer On May 24, 2021, Dr. Jillian Hagel, 42, entered into an employment agreement (the “Hagel Employment Agreement”) with the Company pursuant to which she will become the Company’s chief technology officer, effective as of the Effective Date (the “Hagel Effective Date”). Dr. Hagel has served as chief technology officer of MagicMed since April 2020. From 2019 until 2020, she acted as Vice President of Applied Sciences for Willow Biosciences Inc. until leaving in April 2020 to co-found MagicMed. From 2013 until 2019, Dr. Hagel’s primary employment was acting as Chief Operating Officer of Epimeron Inc. Dr. Hagel received her PhD in plant biochemistry from the University of Calgary. Pursuant to the Hagel Employment Agreement, effective as of the Hagel Effective Date Dr. Hagel will receive a base salary of C$295,000 annually (“Hagel Base Salary”). Dr. Hagel will also receive a one-time signing bonus of C$50,000 as well as up to 130,000 RSUs, depending on the price of the Company Shares at the Hagel Effective Date. Half of any such RSUs shall be subject to time-based vesting, and the remaining half of any such RSUs shall be subject to performance-based vesting. Beginning in calendar year 2022, Dr. Hagel is eligible to receive annual performance bonuses of up to 50% of the Hagel Base Salary, as determined from time-to-time by the Company’s board of directors. Additionally, Dr. Hagel will receive 525,000 RSUs as equity compensation. 262,500 of such RSUs shall be subject to time-based vesting (the “Hagel Time Based RSUs”), and the remaining 262,500 of such RSUs shall be subject to performance-based vesting (the “Hagel Performance RSUs”). The RSUs shall be subject to the terms and conditions of the LTIP. The Hagel Time Based RSUs shall vest in quarters on each of the first four anniversaries of the Hagel Effective Date, and the Hagel Performance RSUs shall vest based on the achievement of performance milestones established by the Company. Enveric Biosciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements The Hagel Employment Agreement will remain in effect until terminated by either party, unless the Company delivers advance written notice of termination to Dr. Hagel or Dr. Hagel delivers advance written notice of termination to the Company at least 30 days prior. In addition, the Hagel Employment Agreement is subject to early termination by her or the Company in accordance with the terms of the Hagel Employment Agreement. Pursuant to the Hagel Employment Agreement, if Dr. Hagel’s employment is terminated by the Company without cause or by Dr. Hagel for good reason, then the Company must pay Dr. Hagel, in addition to any then-accrued and unpaid obligations owed to her, 12 months of the then-current Hagel Base Salary. The Hagel Employment Agreement also contains covenants restricting Dr. Hagel from soliciting the Company’s employees or customers for a period of 12 months after the termination of Dr. Hagel’s employment with the Company and prohibiting her from disclosure of confidential information regarding the Company at any time. Please also note that Hagel Employment Agreement requires completion of the amalgamation, as defined in the Amalgamation Agreement and there can be no assurances of such completion being achieved.

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

NOTE 4 – COMMITMENTS AND CONTINGENCIES

The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business. Management believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows.

Stockholder Demand Letters

On July 14, 2021, the Company received a stockholder demand letter from the law firm of Rigrodsky Law P.A., on behalf of Matthew Whitfield, a purported stockholder of the Company, alleging that the registration statement (the “Amalgamation Registration Statement”) filed by the Company with the SEC on June 21, 2021 omits material information with respect to the Amalgamation and requesting that the Company and the Company board of directors provide certain corrective disclosures in an amendment or supplement to the Amalgamation Registration Statement. The Company does not believe the request has merit, but made certain changes to the Amalgamation Registration Statement, which it believes suffice to answer the purported stockholder’s demands.

On July 22, 2021, the Company received a DGCL Section 220 books and records demand letter from the law firm of Kahn Swick & Foti, on behalf of Scott Waller, a purported stockholder of the Company, seeking access to certain relevant books and records of the Company in connection with the process underlying the Amalgamation (as defined herein) and the Company’s engagement of its financial advisors. The Company does not believe the request has merit, but made certain changes to the Amalgamation Registration Statement, which it believes suffice to answer the purported stockholder’s demands.

Enveric Biosciences, Inc. and Subsidiary

Notes to Unaudited Condensed Consolidated Financial Statements

Development and Clinical Supply Agreement

On February 22, 2021, the Company entered into a Development and Clinical Supply Agreement (the “PureForm Agreement”) with PureForm Global, Inc. (“PureForm”), pursuant to which PureForm will be the exclusive provider of synthetic cannabidiol (“API”) for the Company’s development plans for cancer treatment and supportive care. Under the terms of the PureForm Agreement, PureForm has granted the Company the exclusive right to purchase API and related product for cancer treatment and supportive care during the term of the Agreement (contingent upon an initial minimum order of 1 kilogram during the first thirty (30) days from the effective date) and has agreed to manufacture, package and test the API and related product in accordance with specifications established by the parties. All inventions that are developed jointly by the parties in the course of performing activities under the PureForm Agreement will be owned jointly by the parties in accordance with applicable law; however, if the Company funds additional research and development efforts by PureForm, the parties may enter into a further agreement whereby PureForm would assign any resulting inventions or technical information to the Company.

The initial term of the PureForm Agreement is three (3) years commencing on the effective date of the Agreement, subject to extension by mutual agreement of the parties. The PureForm Agreement may be terminated by either party upon thirty (30) days written notice of an uncured material breach or immediately in the event of bankruptcy or insolvency. The Agreement contains, among other provisions, representation and warranties, indemnification obligations and confidentiality provisions in favor of each party that are customary for an agreement of this nature.

The Company has met the minimum purchase requirement of 1 kilogram during the first thirty days of the PureForm Agreement’s effectiveness.

Appointment of Chief Financial Officer

On April 9, 2021, John M. Van Buiten resigned from his position as the Company’s chief financial officer, effective May 15, 2021. Mr. Van Buiten’s resignation was not the result of any disagreement regarding any matter relating to the Company’s operations, policies, or practices.

On April 9, 2021, Carter J. Ward, 56, was appointed as the Company’s chief financial officer, effective May 15, 2021 (the “Ward Effective Date”).

In connection with Mr. Ward’s appointment as chief financial officer, Mr. Ward entered into an employment agreement with the Company on April 9, 2021 (the “Ward Employment Agreement”), effective as of May 15, 2021, pursuant to which Mr. Ward will receive a base salary of $295,000 (“Base Salary”) and is eligible to receive annual performance bonuses of up to 50% of his Base Salary, as determined from time-to-time by the Company’s board of directors. Additionally, Mr. Ward will receive 525,000 restricted stock units (“RSUs”), 262,500 of such RSUs shall be subject to time-based vesting (the “Time Based RSUs”), and the remaining 262,500 of such RSUs shall be subject to performance-based vesting (the “Performance RSUs”). The RSUs shall be subject to the terms and conditions of the Company’s 2020 Long-Term Incentive Plan. The Time Based RSUs shall vest in quarters on each anniversary of the Ward Effective Date, and the Performance RSUs shall vest based on the achievement of performance milestones established by the Company.

Amalgamation Agreement with MagicMed Industries Inc.

On May 24, 2021, the Company entered into an Amalgamation Agreement (the “Amalgamation Agreement”) with 1306432 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company (“HoldCo”), 1306436 B.C. Ltd., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of HoldCo (“Purchaser”), and MagicMed Industries Inc., a corporation existing under the laws of the Province of British Columbia (“MagicMed”), pursuant to which, among other things, the Company, indirectly through Purchaser, intends to acquire all of the outstanding securities of MagicMed in exchange for securities of the Company by way of an amalgamation under the British Columbia Business Corporations Act, upon the terms and conditions set forth in the Amalgamation Agreement, such that, upon completion of the Amalgamation (as defined herein), the amalgamated corporation (“Amalco”) will be an indirect wholly-owned subsidiary of the Company.

Enveric Biosciences, Inc. and Subsidiary

Notes to Unaudited Condensed Consolidated Financial Statements

At the effective time of the Amalgamation (the “Effective Time”), holders of outstanding common shares of MagicMed (the “MagicMed Shares”) will receive such number of shares of common stock of the Company (“Company Shares”) representing, together with the Company Shares issuable upon exercise of the Warrants and the Converted Options (each as defined herein), approximately 36.6% of the issued and outstanding Company Shares (on a fully-diluted basis). The MagicMed Shares will initially be converted into Amalco Redeemable Preferred Shares (as defined in the Amalgamation Agreement), which immediately following the Amalgamation shall be redeemed for 0.000001 of a Company Share. Following such redemption, the shareholders of MagicMed shall receive additional Company Shares equal to the product of the Exchange Ratio (as defined in the Amalgamation Agreement) multiplied by the number of MagicMed Shares held by each such shareholder. Additionally, following the Effective Time (i) each outstanding MagicMed stock option will be converted into and become an option to purchase (the “Converted Options”) the number of Company Shares equal to the Exchange Ratio multiplied by the number of MagicMed Shares subject to such MagicMed stock option, and (ii) each holder of an outstanding MagicMed warrant (including Company Broker Warrants (as defined in the Amalgamation Agreement), the “Warrants”) will be entitled to receive upon exercise of such Warrant that number of Company Shares which the holder would have been entitled to receive as a result of the Amalgamation if, immediately prior to the date of the Amalgamation (the “Effective Date”), such holder had been the registered holder of the number of MagicMed Shares to which such holder would have been entitled if such holder had exercised such holder’s Warrants immediately prior to the Effective Time (the foregoing collectively, the “Amalgamation”).

The aggregate number of Company Shares that the Company will issue in connection with the Amalgamation (collectively, the “Share Consideration”) will be in excess of 20% of the Company’s pre-transaction outstanding Company Shares. Accordingly, the Company will seek stockholder approval of the issuance of the Share Consideration in the Amalgamation in accordance with the NASDAQ Listing Rules.

Pursuant to the terms of the Amalgamation Agreement, the Company has agreed to appoint upon the Effective Time two individuals selected by MagicMed to the Company Board of Directors, Dr. Joseph Tucker and Brad Thompson.

The Amalgamation Agreement contains representations and warranties, closing deliveries and indemnification provisions customary for a transaction of this nature. The closing of the Amalgamation is conditioned upon, among other things, (i) the Share Consideration being approved for listing on Nasdaq, (ii) the effectiveness of a Registration Statement on Form S-4 registering the Share Consideration (the “S-4 Registration Statement”) and (iii) the approval (a) of the MagicMed stockholders of the Amalgamation and (b) of the Company’s stockholders of each of the Amalgamation and the issuance of the Share Consideration in the Amalgamation.

The Amalgamation Agreement does not permit MagicMed to solicit alternative acquisition proposals from third parties, but it still may, on the terms and subject to the conditions of the Amalgamation Agreement, respond to any unsolicited alternative acquisition proposal that constitutes, or the MagicMed board of directors determines would reasonably be expected to lead to, a Superior Proposal (as defined in the Amalgamation Agreement).

The Amalgamation Agreement also contains customary termination provisions for the parties and provides that a termination fee of $4,500,000 is payable by (i) MagicMed, if the Agreement is terminated by (a) the Company as a result of (1) a change in recommendation by the MagicMed board of directors, (2) an approval or recommendation by the MagicMed board of directors of a different acquisition proposal or authorization by the MagicMed board of directors of a Superior Proposal, or (3) a breach of the non-solicit covenant by MagicMed, or (b) MagicMed in order to accept a Superior Proposal; or (ii) the Company, if the Agreement is terminated by (a) MagicMed as a result of (1) a change in recommendation by the Company board of directors, (2) an approval or recommendation by the Company board of directors of a different acquisition proposal or authorization by the Company board of directors of a Superior Proposal or (3) a breach of the non-solicit covenant by the Company, or (b) the Company in order to accept a Superior Proposal. The Amalgamation Agreement may be terminated by either party if the Amalgamation is not completed by December 31, 2021; provided, that either the Company or MagicMed may extend that date for an additional sixty (60) days if the Securities and Exchange Commission has not concluded its review of the S-4 Registration Statement by the date which is sixty (60) days prior to that date.

Simultaneously with the execution of the Amalgamation Agreement, holders of approximately 30% of MagicMed’s common shares entered into voting support agreements with the Company, and each of the Company’s directors and executive officers entered into voting support agreements with MagicMed pursuant to which such individuals have agreed, among other things, to execute and deliver a written consent with respect to their respective voting shares in favor of the approval of the Amalgamation Agreement or, if applicable, vote such shares in favor of the adoption of the Amalgamation Agreement at a meeting of stockholders called for such purpose.

Enveric Biosciences, Inc. and Subsidiary

Notes to Unaudited Condensed Consolidated Financial Statements

Appointment of Chief Executive Officer

On May 24, 2021, Dr. Joseph Tucker, 52, entered into an employment agreement (the “Tucker Employment Agreement”) with the Company pursuant to which he will become the Company’s chief executive officer, effective as of the Effective Date (the “Tucker Effective Date”).

Dr. Tucker has served as chief executive officer and president of MagicMed since May 2020. From 2019 until 2020, Dr. Tucker acted as the Executive Chairman and Chief Operating Officer of Willow Biosciences Inc. (TSX:WLLW). until leaving to join MagicMed in May 2020. From 2015 to 2019, his principal employment was acting as CEO, President, Director and Founder of Epimeron Inc., which merged with BioCan Technologies Inc. in 2018 and then listed by reverse-takeover with Makena Resources Inc. in 2019 as Willow Biosciences Inc. Dr. Tucker earned a Ph.D. in Biochemistry and Molecular Biology from the University of Calgary.

Pursuant to the Tucker Employment Agreement, effective as of the Tucker Effective Date Dr. Tucker will receive a base salary of $350,000 annually (“Tucker Base Salary”). Dr. Tucker will also receive a one-time signing bonus of $100,000 as well as up to 175,000 restricted stock units (“RSUs”), depending on the price of the Company Shares at the Tucker Effective Date. Half of any such RSUs shall be subject to time-based vesting, and the remaining half of any such RSUs shall be subject to performance-based vesting. Beginning in calendar year 2022, Dr. Tucker is eligible to receive annual performance bonuses of up to 75% of the Tucker Base Salary, as determined from time to time by the Company’s board of directors. Additionally, Dr. Tucker will receive 750,000 RSUs as equity compensation. 375,500 of such RSUs shall be subject to time-based vesting (the “Tucker Time Based RSUs”), and the remaining 375,500 of such RSUs shall be subject to performance-based vesting (the “Tucker Performance RSUs”). The RSUs shall be subject to the terms and conditions of the Company’s 2020 Long-Term Incentive Plan (the “LTIP”). The Tucker Time Based RSUs shall vest in quarters on each of the first four anniversaries of the Tucker Effective Date, and the Tucker Performance RSUs shall vest based on the achievement of performance milestones established by the Company.

The Tucker Employment Agreement will remain in effect until terminated by either party, unless the Company or Dr. Tucker delivers advance written notice of termination to the other party at least 30 days prior. In addition, the Tucker Employment Agreement is subject to early termination by him or the Company in accordance with the terms of the Tucker Employment Agreement.

Pursuant to the Tucker Employment Agreement, if Dr. Tucker’s employment is terminated by the Company without cause or by Dr. Tucker for good reason, then the Company must pay Dr. Tucker, in addition to any then-accrued and unpaid obligations owed to him, 12 months of the then-current Tucker Base Salary.

The Tucker Employment Agreement also contains covenants restricting Dr. Tucker from soliciting the Company’s employees or customers for a period of 12 months after the termination of Dr. Tucker’s employment with the Company and prohibiting him from disclosure of confidential information regarding the Company at any time.

Please also note that Tucker Employment Agreement requires completion of the amalgamation, as defined in the Amalgamation Agreement and there can be no assurances of such completion being achieved.

Appointment of Chief Scientific Officer

On May 24, 2021, Dr. Peter Facchini, 57, entered into an employment agreement (the “Facchini Employment Agreement”) with the Company pursuant to which he will become the Company’s chief scientific officer, effective as of the Effective Date (the “Facchini Effective Date”).

Enveric Biosciences, Inc. and Subsidiary

Notes to Unaudited Condensed Consolidated Financial Statements

Dr. Facchini has served as chief scientific officer of MagicMed since April 2020. From 2019 until 2020, he held the role of Chief Scientific Officer at Willow Biosciences Inc. until leaving to co-found MagicMed. From 2013 until 2019, Dr. Facchini held the role of Chief Scientific Officer, Director and Founder of Epimeron Inc. Dr. Facchini has also been a Professor of Plant Biochemistry in the Department of Biological Sciences at the University of Calgary for 25 years.

Pursuant to the Facchini Employment Agreement, effective as of the Facchini Effective Date Dr. Facchini will receive a base salary of C$295,000 annually (“Facchini Base Salary”). Dr. Facchini will also receive a one-time signing bonus of C$50,000 as well as up to 130,000 RSUs, depending on the price of the Company Shares at the Facchini Effective Date. Half of any such RSUs shall be subject to time-based vesting, and the remaining half of any such RSUs shall be subject to performance-based vesting. Beginning in calendar year 2022, Dr. Facchini is eligible to receive annual performance bonuses of up to 50% of the Facchini Base Salary, as determined from time to time by the Company’s board of directors. Additionally, Dr. Facchini will receive 525,000 RSUs as equity compensation. 262,500 of such RSUs shall be subject to time-based vesting (the “Facchini Time Based RSUs”), and the remaining 262,500 of such RSUs shall be subject to performance-based vesting (the “Facchini Performance RSUs”). The RSUs shall be subject to the terms and conditions of the LTIP. The Facchini Time Based RSUs shall vest in quarters on each of the first four anniversaries of the Facchini Effective Date, and the Facchini Performance RSUs shall vest based on the achievement of performance milestones established by the Company.

The Facchini Employment Agreement will remain in effect until terminated by either party, unless the Company delivers advance written notice of termination to Dr. Facchini or Dr. Facchini delivers advance written notice of termination to the Company at least 30 days prior. In addition, the Facchini Employment Agreement is subject to early termination by him or the Company in accordance with the terms of the Facchini Employment Agreement.

Pursuant to the Facchini Employment Agreement, if Dr. Facchini’s employment is terminated by the Company without cause or by Dr. Facchini for good reason, then the Company must pay Dr. Facchini, in addition to any then-accrued and unpaid obligations owed to him, 12 months of the then-current Facchini Base Salary.

The Facchini Employment Agreement also contains covenants restricting Dr. Facchini from soliciting the Company’s employees or customers for a period of 12 months after the termination of Dr. Facchini’s employment with the Company and prohibiting him from disclosure of confidential information regarding the Company at any time.

Please also note that Facchini Employment Agreement requires completion of the amalgamation, as defined in the Amalgamation Agreement and there can be no assurances of such completion being achieved.

Appointment of Chief Technology Officer

On May 24, 2021, Dr. Jillian Hagel, 42, entered into an employment agreement (the “Hagel Employment Agreement”) with the Company pursuant to which she will become the Company’s chief technology officer, effective as of the Effective Date (the “Hagel Effective Date”).

Dr. Hagel has served as chief technology officer of MagicMed since April 2020. From 2019 until 2020, she acted as Vice President of Applied Sciences for Willow Biosciences Inc. until leaving in April 2020 to co-found MagicMed. From 2013 until 2019, Dr. Hagel’s primary employment was acting as Chief Operating Officer of Epimeron Inc. Dr. Hagel received her PhD in plant biochemistry from the University of Calgary.

Pursuant to the Hagel Employment Agreement, effective as of the Hagel Effective Date Dr. Hagel will receive a base salary of C$295,000 annually (“Hagel Base Salary”). Dr. Hagel will also receive a one-time signing bonus of C$50,000 as well as up to 130,000 RSUs, depending on the price of the Company Shares at the Hagel Effective Date. Half of any such RSUs shall be subject to time-based vesting, and the remaining half of any such RSUs shall be subject to performance-based vesting. Beginning in calendar year 2022, Dr. Hagel is eligible to receive annual performance bonuses of up to 50% of the Hagel Base Salary, as determined from time-to-time by the Company’s board of directors. Additionally, Dr. Hagel will receive 525,000 RSUs as equity compensation. 262,500 of such RSUs shall be subject to time-based vesting (the “Hagel Time Based RSUs”), and the remaining 262,500 of such RSUs shall be subject to performance-based vesting (the “Hagel Performance RSUs”). The RSUs shall be subject to the terms and conditions of the LTIP. The Hagel Time Based RSUs shall vest in quarters on each of the first four anniversaries of the Hagel Effective Date, and the Hagel Performance RSUs shall vest based on the achievement of performance milestones established by the Company.

Enveric Biosciences, Inc. and Subsidiary

Notes to Unaudited Condensed Consolidated Financial Statements

The Hagel Employment Agreement will remain in effect until terminated by either party, unless the Company delivers advance written notice of termination to Dr. Hagel or Dr. Hagel delivers advance written notice of termination to the Company at least 30 days prior. In addition, the Hagel Employment Agreement is subject to early termination by her or the Company in accordance with the terms of the Hagel Employment Agreement.

Pursuant to the Hagel Employment Agreement, if Dr. Hagel’s employment is terminated by the Company without cause or by Dr. Hagel for good reason, then the Company must pay Dr. Hagel, in addition to any then-accrued and unpaid obligations owed to her, 12 months of the then-current Hagel Base Salary.

The Hagel Employment Agreement also contains covenants restricting Dr. Hagel from soliciting the Company’s employees or customers for a period of 12 months after the termination of Dr. Hagel’s employment with the Company and prohibiting her from disclosure of confidential information regarding the Company at any time.

Please also note that Hagel Employment Agreement requires completion of the amalgamation, as defined in the Amalgamation Agreement and there can be no assurances of such completion being achieved.