XML 21 R12.htm IDEA: XBRL DOCUMENT
v3.22.2

SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS | 6 Months Ended
--- | ---
Jun. 30, 2022
Equity [Abstract] |
SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS | 5. SHARE CAPITAL AND OTHER EQUITY INSTRUMENTS Authorized Capital The holders of the Company’s common stock are entitled to one vote per share. Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon the liquidation, dissolution, or winding up of the Company, holders of common stock are entitled to share ratably in all assets of the Company that are legally available for distribution. As of June 30, 2022, 100,000,000 shares of common stock were authorized under the Company’s articles of incorporation. On December 30, 2020, the Company amended its articles of incorporation to designate and authorize 20,000,000 shares of preferred stock. The Company issued Series B preferred stock (“Series B Preferred Stock), which has a certificate of designation authorizing issuance of 3,600,000 preferred shares. During the three months ended March 31, 2021, holders of an aggregate of 65,509 shares of Series B Preferred Stock converted their shares into 65,509 shares of common stock. Following those conversions, no Series B Preferred stock shares remain outstanding. ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Series C Preferred Shares On May 3, 2022, the Board of Directors (the “Board”) declared a dividend of one one-thousandth of a share of the Company’s Series C Preferred Stock (“Series C Preferred Stock”) for each outstanding share of the Company’s Common Stock (the “Common Stock”) held of record as of 5:00 p.m. Eastern Time on May 13, 2022 (the “Record Date”). This dividend was based on the number of outstanding shares of Common Stock prior to the Reverse Stock Split. The outstanding shares of Series C Preferred Stock were entitled to vote together with the outstanding shares of the Company’s Common Stock, as a single class, exclusively with respect to a proposal giving the Board the authority, as it determines appropriate, to implement a reverse stock split within twelve months following the approval of such proposal by the Company’s stockholders (the “Reverse Stock Split Proposal”), as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Reverse Stock Split Proposal (the “Adjournment Proposal”). The Company held a special meeting of stockholders on July 14, 2022 (the “Special Meeting”) for the purpose of voting on, among other proposals, a Reverse Stock Split Proposal and an Adjournment Proposal. All shares of Series C Preferred Stock that were not present in person or by proxy at the Special Meeting were automatically redeemed by the Company immediately prior to the opening of the polls at Special Meeting (the “Initial Redemption”). All shares that were not redeemed pursuant to the Initial Redemption were redeemed automatically upon the approval by the Company’s stockholders of the Reverse Stock Split Proposal at the Special Meeting (the “Subsequent Redemption” and, together with the Initial Redemption, the “Redemption”). Each share of Series C Preferred Stock was entitled to receive $0.10 in cash for each 10 whole shares of Series C Preferred Stock immediately prior to the Redemption. As of June 30, 2022, there were 52,684.548 shares of Series C Preferred Stock issued and outstanding. As of August 12, 2022, both the Initial Redemption and the Subsequent Redemption have occurred. As a result, no shares of Series C Preferred Stock remain outstanding. The Company was not solely in control of redemption of the shares since the holders had the option of deciding whether to return a proxy card for the Special Meeting, which determined whether a given holder’s shares of Series C Preferred Stock were redeemed in the Initial Redemption or the Subsequent Redemption. Since the redemption of the Series C Preferred Stock was not solely in the control of the Company, the preferred shares are classified within temporary equity in the Company’s unaudited condensed consolidated balance sheets. The preferred shares were initially measured at redemption value. The value of the preferred shares as of June 30, 2022 is $527. ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Common Stock Activity On February 15, 2022, the Company completed a public offering of 400,000 shares of Common Stock and warrants to purchase up to 400,000 shares of Common Stock for gross proceeds of approximately $10 million, before deducting underwriting discounts and commissions and other offering expenses. A.G.P./Alliance Global Partners acted as sole book-running manager for the offering. In addition, Enveric granted the underwriter a 45-day option to purchase up to an additional 60,000 shares of Common Stock and/or warrants to purchase up to an additional 60,000 shares of Common Stock at the public offering price, which the underwriter has partially exercised for warrants to purchase up to 60,000 shares of common stock. At closing, Enveric received net proceeds from the offering of approximately $9.1 million, after deducting underwriting discounts and commissions and estimated offering expenses with $5.8 million allocated to equity, $3.6 million to warrant liability and the remaining $0.3 million recorded as an expense. During the six months ended June 30, 2022, a total of 2,122 shares of Common Stock were issued pursuant to the conversion of restricted stock units. Stock Options A summary of activity under the Company’s incentive plan for the six months ended June 30, 2022 is presented below: SCHEDULE OF STOCK OPTION
|  |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Grant Date Fair Value |  |  | Weighted Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2021 |  |  |  | 23,829 |  |  | $ | 79.00 |  |  | $ | 103.50 |  |  |  | 5.3 |  |  | $ | 34,333 |
Forfeited |  |  |  | (1,000 | ) |  | $ | 175.00 |  |  | $ | 140.50 |  |  |  | — |  |  |  | — |
Outstanding at June 30, 2022 |  |  |  | 22,829 |  |  | $ | 75.00 |  |  | $ | 101.50 |  |  |  | 4.6 |  |  | $ | — |
Exercisable at June 30, 2022 |  |  |  | 19,540 |  |  | $ | 75.00 |  |  | $ | 100.50 |  |  |  | 4.0 |  |  | $ | — |
The Company’s stock-based compensation expense, recorded within general and administrative expense, related to stock options for the three months ended June 30, 2022 and 2021 was $48,697 and $—, respectively. The Company’s stock-based compensation expense, recorded within general and administrative expense, related to stock options for the six months ended June 30, 2022 and 2021 was $85,686 and $—, respectively. As of June 30, 2022, the Company had $271,198 in unamortized stock option expense, which will be recognized over a weighted average period of 1.6 years. During the six months ended June 30, 2021, the Company exchanged options to purchase 11,209 shares of common stock for 6,509 restricted stock units and 843 restricted stock awards. In connection with this exchange, the Company recognized $298,714 in inducement expense related to the increase in fair value of the new awards over the old awards, which is included in other expenses on the Company’s consolidated statement of operations and comprehensive income (loss). Restricted Stock Awards The Company’s activity in restricted common stock was as follows for the six months ended June 30, 2022: SCHEDULE OF RESTRICTED STOCK UNITS AND AWARDS ACTIVITY
|  |  | Number of shares |  |  | Weighted average fair value |
Non-vested at December 31, 2021 |  |  |  | 1,031 |  |  | $ | 141.50 |
Granted |  |  |  | 37,445 |  |  | $ | 33.5 |
Forfeited |  |  |  | (700 | ) |  | $ | 146.50 |
Vested |  |  |  | (266 | ) |  | $ | 138.68 |
Non-vested at June 30, 2022 |  |  |  | 65 |  |  | $ | 96.50 |
For the three months ended June 30, 2022 and 2021, the Company recorded $6,250 and $24,003, respectively, in stock-based compensation expense within general and administrative expense, related to restricted stock awards. For the six months ended June 30, 2022 and 2021, the Company recorded $18,113 and $56,114, respectively, in stock-based compensation expense within general and administrative expense, related to restricted stock awards. As of June 30, 2022, unamortized stock-based compensation costs related to restricted share awards was $6,250, which will be recognized over a weighted average period of 0.3 years. The balance of Common Shares related to the vested restricted stock awards as of June 30, 2022 will be issued during the 2022 calendar year. There are 909 vested and unissued shares of restricted stock awards as of June 30, 2022. ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Issuance of Restricted Stock Units The Company’s activity in restricted stock units was as follows for the six months ended June 30, 2022: SCHEDULE OF RESTRICTED STOCK UNITS AND AWARDS ACTIVITY
|  | Number of shares |  |  | Weighted average fair value |
Non-vested at December 31, 2021 |  |  | 62,013 |  |  | $ | 126 |
Granted |  |  | 37,445 |  |  | $ | 33.5 |
Forfeited |  |  | (2,696 | ) |  | $ | 199.5 |
Vested |  |  | (2,212 | ) |  | $ | 199.5 |
Non-vested at June 30, 2022 |  |  | 94,550 |  |  | $ | 87.36 |
For the three months ended June 30, 2022 and 2021, the Company recorded $622,596 and $748,603, respectively, in stock-based compensation expense related to restricted stock units. For the six months ended June 30, 2022 and 2021, the Company recorded $1,342,363 and $4,307,826, respectively, in stock-based compensation expense related to restricted stock units, which is a component of general and administrative expenses in the condensed consolidated statement of operations. As of June 30, 2022, the Company had unamortized stock-based compensation costs related to restricted stock units of $6,448,238 which will be recognized over a weighted average period of 3.2 years and unamortized stock-based costs related to restricted stock units. As of June 30, 2022, 2,212 shares of Common Stock have been issued in relation to vested restricted stock units and 56,071 restricted stock units are vested without shares of Common Stock being issued. The following table summarizes the Company’s recognition of stock-based compensation for restricted stock units for the following periods: SCHEDULE OF STOCK-BASED COMPENSATION FOR RESTRICTED STOCK UNITS
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Stock-based compensation for RSU |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
General and administrative |  | $ | 358,818 |  |  | $ | 783,045 |  |  | $ | 717,636 |  |  | $ | 4,342,498 |
Research and development |  |  | 263,778 |  |  |  | — |  |  |  | 624,727 |  |  |  | — |
Total |  | $ | 622,596 |  |  | $ | 783,045 |  |  | $ | 1,342,363 |  |  | $ | 4,342,498 |
Stock-based compensation |  | $ | 622,596 |  |  | $ | 783,045 |  |  | $ | 1,342,363 |  |  | $ | 4,342,498 |
Warrants On February 11, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with A.G.P./Alliance Global Partners (the “Underwriter”). Pursuant to the Underwriting Agreement, the Company agreed to sell, in a firm commitment offering, 400,000 shares of the Company’s Common Stock and accompanying warrants to purchase up to an aggregate of 400,000 shares of its common stock (“February 2022 Warrants”), as well as up to 60,000 additional shares of common stock and/or warrants to purchase an aggregate of up to 60,000 shares of its common stock that may be purchased by the Underwriter pursuant to a 45-day option granted to the Underwriter by the Company (the “Offering”). Each share of common stock was sold together with a common warrant to purchase one share of common stock, at an exercise price of $27.50 per share. Such common warrants were immediately exercisable and will expire five years from the date of issuance. There is not expected to be any trading market for the common warrants issued in the Offering. The combined public offering price of each share of common stock and accompanying common warrant sold in the Offering was $25.00. On February 14, 2022, the Underwriter exercised its option to purchase an additional 60,000 warrants. ENVERIC BIOSCIENCES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes information about shares issuable under warrants outstanding at June 30, 2022: SCHEDULE OF WARRANTS
|  | Warrant shares outstanding |  |  | Weighted average exercise price |  |  | Weighted average remaining life |  |  | Intrinsic value |
Outstanding at December 31, 2021 |  |  | 195,463 |  |  | $ | 131.00 |  |  |  | 3.4 |  |  | $ | 801,024 |
Issued |  |  | 460,000 |  |  | $ | 27.50 |  |  |  | 4.6 |  |  | $ | — |
Outstanding at June 30, 2022 |  |  | 655,463 |  |  | $ | 58.36 |  |  |  | 4.1 |  |  | $ | 21,437 |
Exercisable at June 30, 2022 |  |  | 655,463 |  |  |  | 58.36 |  |  |  | 4.1 |  |  |  | 21,437 |
The warrants assumed pursuant to the acquisition of MagicMed contain certain down round features, which were not triggered by the February 2022 public offering, which would require adjustment to the exercise price upon certain events when the offering price is less than the stated exercise price.

X
- References No definition available. + Details
Name: | us-gaap_EquityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration