Share Capital and Other Equity Instruments

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Share Capital and Other Equity Instruments

NOTE 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 rateably in all assets of the Company that are legally available for distribution. As of December 31, 2020, 100,000,000 shares of common stock and 20,000,000 shares of Series B Preferred Stock were authorized under the Company’s articles of incorporation. The Company’s Series B preferred stock is convertible by the holder at any time into common stock at a rate of one to one.

Conversion of Series B Preferred Stock

During the three months ended March 31, 2021, holders of an aggregate of 3,275,407 shares of Series B Preferred Stock converted their shares into 3,275,407 shares of common stock. Following those conversions, no Series B Preferred stock shares remain outstanding.

Offerings

On January 14, 2021, the Company completed an offering of 2,221,458 shares of Common Stock and pre-funded warrants at approximately $4.50 per share and a concurrent private placement of warrants to purchase 1,666,019 shares of Common Stock at $4.9519 per share, exercisable immediately and terminating five years after the date of issuance for gross proceeds of approximately $10,000,000. The net proceeds to the Company after deducting financial advisory fees and other costs and expenses were approximately $8,806,087.

On February 11, 2021, the Company completed an offering of 3,007,026 shares of Common Stock and a concurrent private placement of warrants to purchase 1,503,513 shares of Common Stock at $4.90 per share, exercisable immediately and terminating five year from the date of issuance for gross proceeds of approximately $12,800,000. The net proceeds to Enveric from the offering after deducting financial advisory fees and other costs and expenses were approximately $11,624,401.

Stock Options

	Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Grant Date Fair Value (USD)		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (USD)
Outstanding – January 1, 2021		929,765		$	1.53	$	2.50
Expired forfeited, or cancelled		(560,404	)	$	1.65	$	1.66
Outstanding – December 31, 2020		369,361		$	1.35	$	3.80		5.2	$	636,156
Exercisable at December 31, 2020		369,361		$	1.35	$	3.80		5.2	$	636,156

The Company’s stock based compensation expense related to stock options for the three months ended March 31, 2021 and 2020 was $0 and $0, respectively. As of March 31, 2021, the Company had $0 in unamortized stock option expense.

During the three months ended March 31, 2021, the Company exchanged options to purchase 560,404 shares of common stock for 325,410 restricted stock units and 42,125 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 general and administrative expenses on the Company’s statement of operations and comprehensive loss.

Restricted Stock Awards

The Company’s activity in restricted common stock was as follows for the three months ended March 31, 2021:

	Number of shares			Weighted average grant date fair value
Non–vested at January 1, 2021		-		$	-
Granted		70,986		$	4.16
Vested		(44,390	)	$	4.49
Non–vested at March 31, 2021		26,596		$	3.61

For the three months ended March 31, 2021 and 2020, the Company recorded $32,112 and $0, in stock-based compensation expense related to restricted stock awards. As of March 31, 2021, unamortized stock-based compensation costs related to restricted share awards was $72,009, which will be recognized over a weighted average period of 0.47 years.

Issuance of Restricted Stock Units

The Company’s activity in restricted stock units was as follows for the three months ended March 31, 2021:

	Number of shares			Weighted average grant date fair value
Non–vested at January 1, 2021		-		$	-
Granted		3,279,284		$	4.41
Vested		(1,207,825	)	$	4.46
Non–vested at March 31, 2021		2,071,459		$	4.38

For the three months ended March 31, 2021 and 2020, the Company recorded $3,559,453 and $0, 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 March 31, 2021, unamortized stock-based compensation costs related to restricted stock units was $9,416,205 and will be recognized over a weighted average period of 1.93 years.

Warrants

The following table summarizes information about shares issuable under warrants outstanding at March 31, 2021:

	Warrant shares outstanding			Weighted average exercise price (USD)		Weighted average remaining life		Intrinsic value
Outstanding at January 1, 2021		3,661,178		$	1.98
Issued		3,535,519		$	4.93
Exercised		(851,099	)	$	4.17
Outstanding at March 31, 2021		6,345,598		$	3.33		4.9	$	6,049,152
Exercisable at March 31, 2021		6,345,598		$	3.33		4.9	$	6,049,152