UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): December 30,
2020
Enveric
Biosciences, Inc.
(Exact
name of Registrant as specified in its charter)
|
Delaware |
|
001-38286 |
|
95-4484725 |
|
(State
or other jurisdiction
of
incorporation)
|
|
(Commission
File
No.)
|
|
(IRS
Employer
Identification
No.)
|
Enveric
Biosciences, Inc.
4851
Tamiami Trail N, Suite 200
Naples,
FL 34103
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (239)
302-1707
AMERI
Holdings, Inc.
5000
Research Court, Suite 750
Suwanee,
Georgia 30024
(Former
name or former address, if changed since last
report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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[ ] |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425) |
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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[ ] |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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[ ] |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
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Title
of each class |
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Trading
Symbol(s) |
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Name
of each exchange on which registered |
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Common
stock, par value $0.01 per share |
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ENVB |
|
The
Nasdaq Stock Market |
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
Emerging
growth company [ ]
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
[ ]
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Item
1.01. |
Entry
into a Material Definitive Agreement. |
The
information set forth in Item 2.01 and in Item 3.02 is incorporated
herein by reference.
|
Item
2.01. |
Completion
of Acquisition or Disposition of Assets. |
Closing of 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 Enveric
Biosciences, Inc., a Delaware corporation (the
“Company”) previously known as AMERI Holdings, Inc.
(“Ameri”), Jay Pharma Inc., a Canada corporation and
a wholly owned subsidiary of the Company (“Jay
Pharma”), and certain other signatories thereto, the
Company completed a tender offer (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 (the “Common Stock”) or Series B
convertible preferred stock of the Company, par value $0.01 per
share (the “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 (the “Reverse Stock Split”).
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.
Following
the Offer and after giving effect to the Reverse Stock Split, the
Company had outstanding approximately 9.85 million shares of Common
Stock outstanding and 3,525,407 shares of Series B Preferred Stock
that were convertible into 3,525,407 shares of Common Stock
outstanding. The holders of approximately 72% of outstanding shares
of Common Stock 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 Company 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.
The
Common Stock listed 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.
The
foregoing description of the Tender Agreement and the Offer does
not purport to be complete and is qualified in its entirety by
reference to the full text of the Tender Agreement and the Tender
Agreement Amendment, which are filed as Exhibits 2.1 and 2.2 and
are incorporated by reference herein.
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.
The
foregoing description of the Ameri Share Purchase Agreement does
not purport to be complete and is qualified in its entirety by
reference to the full text of the Ameri Share Purchase Agreement,
which is filed as Exhibit 2.3 and is incorporated by reference
herein.
|
Item
3.02. |
Unregistered
Sales of Equity Securities. |
Series B Warrants
Pursuant
to the Tender Agreement, on December 31, 2020, the Company issued
Series B Warrants (the “Series B Warrants”) to
purchase 1,791,923 shares of common stock of the Company at an
exercise price of $0.01 to Alpha Capital Anstalt
(“Alpha”). The Company is obligated, among other
things, to file a registration statement with the Securities and
Exchange Commission (the “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.
|
Item
3.03. |
Material
Modification to Rights of Security Holders. |
Series A Preferred Stock Redemption
Upon the closing of the Spin-Off, all of the Company’s outstanding
shares of Series A Preferred Stock were redeemed for an equal number of shares of Private
Ameri Preferred Stock.
The information in Item 2.01 relating to the Series A Preferred
Stock is incorporated by reference herein.
Amended and Restated Certificate of Incorporation and
Bylaws
The information set forth in Item 5.03 under the headings “Amended
and Restated Certificate of Incorporation” and “Amended and
Restated Bylaws” is incorporated by reference herein.
Reverse Stock Split
As
previously disclosed, at the special meeting of the Company’s
stockholders held on December 29, 2020, the Company’s stockholders
approved a certificate of amendment to the Company’s A&R
Charter (as defined below under Item 5.03) to effect the Reverse
Stock Split. On December 30, 2020, the Company filed the
certificate of amendment to the Company’s A&R Charter with the
Secretary of State of the State of Delaware to effect the Reverse
Stock Split (the “Reverse Split Amendment”). As a
result of the Reverse Stock Split, every four shares of the Common
Stock held by a stockholder immediately prior to the Reverse Stock
Split were combined and reclassified into one share of the
Company’s Common Stock. No fractional shares were issued in
connection with the Reverse Stock Split. The Reverse Split
Amendment provides that each stockholder who did not have a number
of shares evenly divisible pursuant to the Reverse Stock Split
ratio and who would otherwise be entitled to receive a fractional
share of Common Stock was entitled to receive an additional share
of Common Stock. The Reverse Split Amendment did not change the par
value per share of Common Stock or the number of authorized shares
of the Company’s common stock, which will remain at
100,000,000.
The
foregoing description of the Reverse Split Amendment is not
complete and is qualified in its entirety by reference to a copy of
the Reverse Split Amendment, which is filed as Exhibit 3.2 hereto
and is incorporated by reference herein.
The
information in Item 2.01 relating to the Reverse Stock Split is
incorporated by reference herein.
Series B
Preferred Stock Certificate of Designations
In
connection with the Offer, on December 30, 2020, the Company filed
a Series B Preferred Stock Certificate of Designations (the
“Series B Preferred Stock Certificate of
Designations”) with the Secretary of State of the State of
Delaware to create a class of non-voting Series B Preferred Stock.
Each share of Series B Preferred Stock will be convertible into one
share of Common Stock (subject to adjustment) at any time at the
option of the holders, provided that each holder would be
prohibited from converting Series B Preferred Stock into shares of
Common Stock if, as a result of such conversion, any such holder,
together with its affiliates, would own more than 9.99% of the
total number of shares of Common Stock then issued and outstanding.
This limitation may be waived with respect to a holder upon such
holder’s provision of not less than 61 days’ prior written notice
to the Company.
Shares of
Series B Preferred Stock are not entitled to receive any dividends,
unless and until specifically declared by the board of directors.
However, holders of Series B Preferred Stock are entitled to
receive dividends on shares of Series B Preferred Stock equal (on
an as-if-converted-to-Common-Stock basis) to and in the same form
as dividends actually paid on shares of Common Stock when such
dividends are specifically declared by the board of directors. The
Company will have no right to require a holder to surrender its
Series B Preferred Stock for redemption. Shares of Series B
Preferred Stock will not otherwise be entitled to any redemption
rights, or mandatory sinking fund or analogous fund
provisions.
Upon
completion of the Offer, the Company issued 3,525,407 shares of
Series B Preferred Stock, of which 250,000 shares were immediately
converted into 250,000 post-Reverse Stock Split shares of Common
Stock.
The
foregoing description of the Series B Preferred Stock Certificate
of Designations does not purport to be complete and is qualified
entirely by reference to the full text of the Series B Preferred
Stock Certificate of Designations, which is attached hereto as
Exhibit 3.3 and is incorporated by reference herein.
|
Item
5.01. |
Changes
in Control of Registrant. |
The
information required by this Item 5.01 is contained in Item 2.01
and is incorporated by reference herein.
|
Item
5.02. |
Departure
of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers. |
Director and Officer Resignations
Effective
upon completion of the Offer, Srinidhi “Dev” Devanur, the Company’s
Executive Chairman and a director of the Board, Brent Kelton, the
Company’s Chief Executive Officer, Barry Kostiner, the Company’s
Chief Financial Officer, Carmo Martella, a director of the Board,
Thoranath Sukumaran, a director of the Board and Dimitrios Angelis,
a director of the Board, all tendered their resignations from their
respective positions as officers and directors of the Company.
These letters did not contain any statements describing
disagreements with the Company related to its operations, policies
or practices, nor did any disagreements lead to their
resignation.
Director Appointments
Pursuant
to the terms of the Tender Agreement, and as disclosed in the proxy
statement/prospectus filed by the Company, as subsequently
supplemented, the Board appointed David Johnson, George Kegler, Sol
Mayer and Marcus Schabacker to the Board at the effective time of
the Offer.
Effective
upon completion of the Offer, the Board appointed (i) George
Kegler, Sol Mayer and Marcus Schabacker as the members of the Audit
Committee of the Board, with George Kegler serving as the chair of
such committee, (ii) George Kegler, Sol Mayer and Marcus Schabacker
as the members of the Compensation Committee of the Board, with
Marcus Schabacker serving as the chair of such committee, and (iii)
George Kegler, Sol Mayer and Marcus Schabacker as the members of
the Nominating and Governance Committee of the Board, with Sol
Mayer serving as the chair of such committee.
Each
director that is not an employee of the Company (each, a
“Non-Employee Director”) will be paid an annual
compensation of $25,000. In addition, each Non-Employee Director
will also be eligible for his or her service on Committees of the
Board of Directors in accordance with the following:
|
Position |
|
Annual Cash Compensation |
|
| Chair of the Audit
Committee |
|
$ |
7,500 |
|
| Non-Chair Member of the Audit
Committee |
|
$ |
5,000 |
|
| Chair of the Nominating and Governance
Committee |
|
$ |
5,000 |
|
| Non-Chair Member of the Nominating and
Governance Committee |
|
$ |
3,000 |
|
| Chair of the Compensation
Committee |
|
$ |
5,000 |
|
| Non-Chair Member of the Compensation
Committee |
|
$ |
3,000 |
|
Each
Non-Employee Director shall also be granted an equity award of
$25,000 in the form of restricted stock, vesting one year after he
or she commences service as a director, provided he or she is still
serving as a director on such vesting date. In addition, each
Non-Employee Director serving during the calendar year 2021 shall
also be eligible to receive a one-time equity award of $50,000 in
the form of restricted stock, vesting one year after he or she
commences service as a director, provided he or she is still
serving as a director on such vesting date, solely with respect to
his or her service during the calendar year 2021.
Officer Appointments
Effective
upon the completion of the Offer, the Board appointed the following
individuals to the office or offices set forth opposite his name
below:
|
Name: |
|
Office: |
|
|
|
|
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David
Johnson |
|
Chief
Executive Officer and Chairman of the Board |
|
Avani
Kanubaddi |
|
Chief
Operating Officer |
|
John
Van Buiten |
|
Chief
Financial Officer |
|
Robert
Wilkins |
|
Chief
Medical Officer |
Mr.
Johnson, 61, serves as Chairman and Chief Executive Officer of the
Company. Mr. Johnson also has served on the board of directors and
as the Chief Executive Officer of Aquamed Technologies, Inc. since
April 2019. Mr. Johnson formerly served on the board of directors
and as the President and Chief Executive Officer of Alliqua
BioMedical, Inc. from November 2012 until April 2019. Mr. Johnson
was formerly President of the ConvaTec Division of Bristol-Myers
Squibb, Inc. until 2008 when he orchestrated a sale of the division
from its pharmaceutical parent to Avista Capital Partners and
Nordic Capital in a deal valued at $4.1 billion. Concurrently, he
acquired and integrated the assets of Copenhagen-based Unomedical
to expand ConvaTec Inc.’s manufacturing and infrastructure into
Europe. From 2008 through 2012, Mr. Johnson served as the Chief
Executive Officer of ConvaTec Inc. Prior to his tenure with
ConvaTec Inc., Mr. Johnson held several senior positions in the
U.S., Europe and Canada with Zimmer Inc., Fisher Scientific, and
Baxter Corporation. He served as a member of ConvaTec Inc.’s board
of directors and the board of the Advanced Medical Technology
Association (AdvaMed), where he chaired the Global Wound Sector
Team for four years. Mr. Johnson received an Undergraduate Business
Degree in Marketing from the Northern Alberta Institute of
Technology in Edmonton, Alberta, Canada, completed the INSEAD
Advanced Management Program in Fontainbleau, France, and is a
fellow from the Wharton School of the University of Pennsylvania.
Mr. Johnson’s extensive experience in the pharmaceutical and
biotechnology fields, as well as his executive leadership
experience, make him an asset that will serve as a bridge between
the board of directors and our executive officers.
Mr.
Kanubaddi, 48, serves as Chief Operating Officer of the Company.
Mr. Kanubaddi is an entrepreneur and business leader who has a
passion for health and healing. Mr. Kanubaddi is currently the
Acting President & Chief Operating Officer of NEXGEL, Inc.
(September 2019 – Present), an FDA registered, ISO certified
advanced hydrogel manufacturer serving the OTC, cosmetic and
medical device markets around the world. At NEXGEL, Mr. Kanubaddi
led the rebranding, repositioning and overall strategy for the
company to accelerate growth and drive innovation. This included
rebranding the company as NEXGEL, branding the company’s unique
hydrogels, developing a robust white label catalog, architecting an
innovation engine to fill the pipeline with new concepts and
guiding the company’s first-ever branded product launches. In
addition to NEXGEL, Mr. Kanubaddi also serves as the Senior Partner
at IQ/EQ Brand Strategy (August 2018 – present), where he assists
companies in developing “go to market” strategies, branding and
naming exercises and new product innovation for consumer, medical
device and prescription companies. Prior to his consulting career,
Mr. Kanubaddi was the Founder and Chief Executive Officer of
Welmedix Healthcare (February 2007 – September 2019) to develop
innovative skin and wound care solutions to improve health and
healing with an eye towards whole person wellness. During his
tenure, he led the company to develop three unique brands with
patented solutions, gaining distribution in over 20,000 retail
outlets, including Walmart, Walgreens, CVS and others. After
building some of the fastest growing brands in their respective
categories, Welmedix sold its leading brands to a private-equity
backed healthcare company. Before his entrepreneurial venture, Mr.
Kanubaddi began his 25+ year career in the healthcare industry at
two leading companies – Wyeth Consumer Healthcare (now GSK Consumer
Health) and Bristol Myers Squibb’s ConvaTec Division. While working
with market leading OTC brands like Centrum, Advil and Chapstick;
medical devices and hospital businesses including Aloe Vesta,
DuoDerm and Sur-Fit Natura, Mr. Kanubaddi held positions of
increasing responsibility across the functional areas of brand
management, sales, new product development and new ventures. Mr.
Kanubaddi holds an MBA from Columbia Business School and BS in
Marketing from Miami University. Mr. Kanubaddi also served on the
Board of Directors for the Consumer Healthcare Products Association
(CHPA), the leading industry trade group for consumer healthcare in
the United States.
Mr.
Van Buiten, 33, serves as Chief Financial Officer of the Company.
Mr. Van Buiten has served as Chief Financial Officer of Jay Pharma
Inc. since December 17, 2018 and resigned on January 8, 2020. Mr.
Van Buiten is an experienced finance executive with extensive
background in public company accounting and financial reporting. He
currently serves as a manager at Financial Consulting Strategies,
LLC (“FCS”), preparing annual and quarterly SEC filings for clients
in a wide range of industries and sizes. Mr. Van Buiten has been
employed by FCS since April 2010, and in addition to his position
at Jay Pharma, he served as the Chief Financial Officer of Tikkun
under contract with FCS. He is a Certified Public
Accountant.
Dr.
Wilkins, 66, serves as Chief Medical Officer of the Company. Since
November 2017, Dr. Wilkins has provided consulting services in
areas such as market assessment, business plan development and
implementation and clinical and regulatory planning and support to
healthcare and life sciences companies ranging from start-ups to
Fortune 500 companies through QPS Consulting, LLC, which he founded
in November 2017. Dr. Wilkins formerly served as Vice President of
Strategy at Battelle Memorial Institute from February 2012 to
November 2017, in which capacity he was responsible for management
of subsidiaries, spin-outs and venture-class investments. As Vice
President of Strategy, Dr. Wilkins oversaw the sale of Bluefin
Robotics to General Dynamics and managed the divestiture of several
other Battelle Ventures portfolio companies. During his time at
Battelle, Dr. Wilkins also served as a member of Battelle’s Growth
Council, the Battelle Ventures Advisory Board, the Board of
Directors of Hepregen Corporation and the Board of Managers of
Armada Power LLC, and he was responsible for creating and leading
Battelle’s Corporate Strategy team. From May 2006 until its merger
with MID Inc. in May 2011, Dr. Wilkins served as President and
Chief Executive Officer of Endovalve Inc., where he managed the
product development process and significantly expanded the
company’s intellectual property portfolio. Prior to his tenure with
Endovalve Inc., Dr. Wilkins served in senior positions with
GlucoLight Corporation, Datascope Corp., Physiometrix Inc., Baxter
Healthcare, Abbott Laboratories, Vifor Pharma and TIL Medical Ltd.
Dr. Wilkins received an MBChB from the University of Manchester and
received an FRCA in Anesthesiology from the Royal College of
Anaesthetists. Dr. Wilkins’ extensive experience in both product
development and business strategy in the pharmaceutical and
biotechnology fields will be invaluable to the Company’s
development.
Employment Agreements
Prior
to the completion of the Offer, and in connection with the
execution of that certain Amalgamation Agreement, dated January 10,
2020, by and among the Company (f/k/a Ameri), Jay Pharma, Jay
Pharma Merger Sub, Inc., 1236567 B.C. Unlimited Liability Company
and Barry Kostiner, as the Ameri representative, which predates the
Tender Agreement, Jay Pharma entered into an employment agreement
with Mr. Johnson, whereby Mr. Johnson would serve as the Chief
Executive Officer and Chairman of the Company upon the completion
of the Offer (the “Johnson Employment Agreement”). In
addition, priorto the completion of the
Offer, and to be contingent and effective upon the completion of
the Offer, the Company entered into executive employment agreements
with Mr. Kanubaddi (the “Kanubaddi Employment
Agreement”) and Dr. Wilkins (the “Wilkins Employment
Agreement”, and together with the Johnson Employment
Agreement and the Kanubaddi Employment Agreement, the
“Executive Employment Agreements”). In addition,
pursuant to the Tender Agreement, on December 29, 2020, the Company
entered into a consulting agreement with Barry Kostiner (the
“Kostiner Consulting Agreement”), to be effective
upon the completion of the Offer.
Johnson
Employment Agreement
Pursuant
to the Johnson Employment Agreement, dated January 10, 2020, Mr.
Johnson serves in the position of Chief Executive Officer and
Chairman of the Company following the completion of the Offer. Mr.
Johnson is entitled to a base salary of $250,000 and an annual
bonus in the amount of $100,000 (provided, however, that if Mr.
Johnson’s position is changed such that he no longer serves as
Chief Executive Officer and only serves as Chairman of the Company,
he will only be entitled to a base salary of $100,000 beginning
with the first day of the month following such change). Mr. Johnson
is also eligible to receive annual performance bonuses based on
satisfaction of performance criteria/financial results, as
determined by the board of directors of the Company in its sole
discretion. Within 30 days after the completion of the Offer, Mr.
Johnson will be granted an award of restricted stock units that
represent, in the aggregate, 5% of the Company’s issued and
outstanding common stock determined on a fully diluted basis as of
the date of grant. Mr. Johnson will also be eligible to receive
additional equity awards, as determined by the Company in its sole
discretion.
Under
the terms of the Johnson Employment Agreement, Mr. Johnson’s
employment may be terminated by either the Company or Mr. Johnson
at any time and for any reason with 30 days’ advance written
notice. Upon termination of Mr. Johnson’s employment, Mr. Johnson
will receive (i) his fully earned but unpaid base salary through
the date of termination, (ii) any accrued and unpaid time off or
similar pay to which Mr. Johnson is entitled as a matter of law or
Company policy, (iii) any amounts due to Mr. Johnson under the
terms of the benefit plans, and (iv) any unreimbursed expenses
properly incurred prior to the date of termination (the
“Johnson Accrued Obligations”).
If
the Company terminates Mr. Johnson’s employment for cause (as
defined below) or Mr. Johnson resigns without good reason (as
defined below), the Company, at its sole discretion, may shorten
the notice period and determine the date of termination without any
obligation to pay any additional compensation other than the
Johnson Accrued Obligations and without triggering a termination of
Mr. Johnson’s employment without cause. If the Company terminates
Mr. Johnson’s employment without cause or Mr. Johnson resigns for
good reason at any time, Mr. Johnson is entitled to the following
severance payments and benefits: (i) his full annual base salary
less applicable deductions and withholdings; plus (ii) any earned
but unpaid annual bonus and performance bonus, if any, for the year
of the termination.
The
Johnson Employment Agreement also contains certain standard
non-solicitation, non-disparagement and confidentiality
requirements for Mr. Johnson.
Kanubaddi
Employment Agreement
Pursuant
to the Kanubaddi Employment Agreement, dated December 2, 2020, Mr.
Kanubaddi serves in the position of Chief Operating Officer of the
Company following the completion of the Offer. Mr. Kanubaddi is
entitled to a base salary of $295,000 and a closing bonus in the
amount of $60,000. Mr. Kanubaddi is also eligible to receive annual
performance bonuses of up to 50% of his base salary based on
satisfaction of performance criteria/financial results, as
determined by the board of directors of the Company in its sole
discretion. Within 30 days after the completion of the Offer, Mr.
Kanubaddi will be granted an award of restricted stock units that
represent, in the aggregate, 3% of the Company’s issued and
outstanding common stock determined on a fully diluted basis as of
the date of grant. Mr. Kanubaddi will also be eligible to receive
additional equity awards, as determined by the Company in its sole
discretion.
Under
the terms of the Kanubaddi Employment Agreement, Mr. Kanubaddi’s
employment may be terminated by either the Company or Mr. Kanubaddi
at any time and for any reason with 30 days’ advance written
notice. Upon termination of Mr. Kanubaddi’s employment, Mr.
Kanubaddi will receive (i) his fully earned but unpaid base salary
through the date of termination, (ii) any accrued and unpaid time
off or similar pay to which Mr. Kanubaddi is entitled as a matter
of law or Company policy, (iii) any amounts due to Mr. Kanubaddi
under the terms of the benefit plans, and (iv) any unreimbursed
expenses properly incurred prior to the date of termination (the
“Kanubaddi Accrued Obligations”).
If
the Company terminates Mr. Kanubaddi’s employment for cause (as
defined below) or Mr. Kanubaddi resigns without good reason (as
defined below), the Company, at its sole discretion, may shorten
the notice period and determine the date of termination without any
obligation to pay any additional compensation other than the
Kanubaddi Accrued Obligations and without triggering a termination
of Mr. Kanubaddi’s employment without cause. If the Company
terminates Mr. Kanubaddi’s employment without cause or Mr.
Kanubaddi resigns for good reason at any time, Mr. Kanubaddi is
entitled to the following severance payments and benefits: (i) his
full annual base salary less applicable deductions and
withholdings; plus (ii) any earned but unpaid performance bonus, if
any, for the year of the termination.
The
Kanubaddi Employment Agreement also contains certain standard
non-solicitation, non-disparagement and confidentiality
requirements for Mr. Kanubaddi.
Wilkins
Employment Agreement
Pursuant
to the Wilkins Employment Agreement, dated December 22, 2020, Dr.
Wilkins serves in the position of Chief Medical Officer of the
Company following the completion of the Offer. Dr. Wilkins is
entitled to a base salary of $185,000. Dr. Wilkins is also eligible
to receive annual performance bonuses of up to 50% of his base
salary based on satisfaction of performance criteria/financial
results, as determined by the board of directors of the Company in
its sole discretion. Within 30 days after the completion of the
Offer, Dr. Wilkins will be granted an award of restricted stock
units that represent, in the aggregate, 2% of the Company’s issued
and outstanding common stock determined on a fully diluted basis as
of the date of grant. Dr. Wilkins will also be eligible to receive
additional equity awards, as determined by the Company in its sole
discretion.
Under
the terms of the Wilkins Employment Agreement, Dr. Wilkins’s
employment may be terminated by either the Company or Dr. Wilkins
at any time and for any reason with 30 days’ advance written
notice. Upon termination of Mr. Kanubaddi’s employment, Mr.
Kanubaddi will receive (i) his fully earned but unpaid base salary
through the date of termination, (ii) any amounts due to Dr.
Wilkins under the terms of the benefit plans, and (iv) any
unreimbursed expenses properly incurred prior to the date of
termination (the “Wilkins Accrued
Obligations”).
If
the Company terminates Dr. Wilkins’s employment for any reason, the
Company, at its sole discretion, may shorten the notice period and
determine the date of termination without any obligation to pay any
additional compensation other than the Wilkins Accrued
Obligations.
The
Wilkins Employment Agreement also contains certain standard
non-solicitation, non-disparagement and confidentiality
requirements for Dr. Wilkins.
For
purposes of the Executive Employment Agreements:
“Cause”
shall mean a termination of employment because of (i) the
executive’s failure or refusal to perform the duties of the
executive’s position in a manner causing material detriment to the
Company; (ii) the executive’s willful misconduct with regard to the
Company or its business, assets or executives (including, without
limitation, his fraud, embezzlement, intentional misrepresentation,
misappropriation, conversion or other act of dishonesty with regard
to the Company; (iii) the executive’s commission of an act or acts
constituting a felony or any crime involving fraud or dishonesty as
determined in good faith by the Company; (iv) the executive’s
breach of a fiduciary duty owed to the Company; (v) any material
breach of the employment agreement or any other agreement with the
Company; or (vi) any injury, illness or incapacity which shall
wholly or continuously disable the executive from performing the
essential functions of the executive’s position for any successive
or intermittent period of at least 12 months.
“Good
reason” shall mean a termination of employment because of: (i)
a materially adverse diminution in the execution’s role or
responsibilities without the executive’s consent, provided that the
parties to the employment agreement agree that it shall not be
considered a diminution in the executive’s role or responsibilities
if he ceases serving as Chief Executive Officer provided he remains
Chairman; or (ii) any material breach of the employment agreement
by the Company or any other agreement with the
executive.
Kostiner
Consulting Agreement
Pursuant
to the Kostiner Consulting Agreement, dated December 29, 2020, Mr.
Kostiner will serve as a consultant to the Company following the
completion of the Offer for a period of 12 months following the
closing of the Offer. Mr. Kostiner will be entitled to a total
compensation of $120,000 (the “Fee”) under the
Kostiner Consulting Agreement, payable in monthly installments of
$10,000.
Under
the terms of the Kostiner Consulting Agreement, Mr. Kostiner’s
consulting services may be terminated by either the Company or Mr.
Kostiner at any time and for any reason. In the event that either
Mr. Kostiner or the Company terminates the Kostiner Consulting
Agreement prior to the end of the term thereof, the Company will
continue to make monthly payments of $10,000 to Mr. Kostiner until
the full amount of the Fee has been paid.
The
Kostiner Consulting Agreement also contains certain standard
non-solicitation, non-disparagement and confidentiality
requirements for Mr. Kostiner.
The
foregoing descriptions of the Executive Employment Agreements does
not purport to be complete and is qualified entirely by reference
to the full text of the Executive Employment Agreements, with the
Johnson Employment Agreement, the Kanubaddi Employment Agreement,
the Wilkins Employment Agreement and the Kostiner Consulting
Agreement attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4,
respectively, which in each case is incorporated by reference
herein.
Adoption of Benefit Plan
Pursuant
to the Tender Agreement, effective as of the effective time of the
Offer, the Company adopted the Enveric Biosciences, Inc. 2020
Long-Term Incentive Plan (the “2020
Plan”).
The
2020 Plan provides for the granting of incentive stock options,
nonqualified stock options, stock appreciation rights, restricted
stock, restricted stock units, performance awards, dividend
equivalent rights and other awards which may be granted singly, in
combination or in tandem, and which may be paid in shares of Common
Stock. At the effective time of the Offer, the number of shares of
Common Stock that are reserved for issuance pursuant to awards
under the 2020 Plan is 2,695,893 shares (post-Reverse Stock
Split).
The
2020 Plan will terminate on December 30, 2030, the tenth
anniversary of its effective date. No award may be made under the
2020 Plan after its expiration date.
The
foregoing description of the 2020 Plan does not purport to be
complete and is qualified entirely by reference to the full text of
the 2020 Plan, which is attached hereto as Exhibit 10.5 and is
incorporated by reference herein.
In
connection with the 2020 Plan, the Board adopted a form of
Restricted Stock Unit Award Agreement, which is attached hereto as
Exhibit 10.6 and is incorporated by reference herein. Restricted
stock units granted to participants pursuant to the Restricted
Stock Unit Award Agreement may be converted into the number of
shares of Common Stock equal to the number of restricted stock
units, with each restricted stock unit to represent a notional
share of Common Stock, with a value equal to the fair market value
of a share of Common Stock at any time.
|
Item
5.03. |
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year. |
Charter Amendments
The
information set forth in Item 3.03 under the headings “Reverse
Stock Split” and “Series B Preferred Stock Certificate of
Designations” are incorporated by reference herein.
Amended and Restated Certificate of
Incorporation
In
connection with the Tender Agreement, the Company agreed to seek
the approval of its stockholders to amend and restate the Company’s
Certificate of Incorporation (the “A&R Charter”).
The Company obtained stockholder approval of the A&R Charter
and, on December 30, 2020, filed the A&R Charter with the
Secretary of State of the State of Delaware.
The
key amendments included in the A&R Charter are as
follows:
|
|
● |
the
name of the Company is changed to “Enveric Biosciences,
Inc.”; |
| |
● |
the
change in the number of authorized shares to 120,000,000,
consisting of 100,000,000 shares of Common Stock and 20,000,000
shares of preferred stock; |
| |
● |
any
amendment of clauses addressing indemnification of directors and
officers does not eliminate or reduce the effect of the
indemnification in respect of any matter occurring, or any
proceeding accruing or arising or that, but for the indemnification
provisions, would accrue or arise, prior to such amendment, repeal
or adoption of an inconsistent provision; |
| |
● |
removal
of certain provisions under Article IV providing for a previously
effectuated stock split which has already been
effectuated; |
| |
● |
simplification
and consolidation of various clauses, which substantially provide
the same rights, procedures, policies and restrictions regarding,
among other things, meetings of stockholders, stockholder voting
rights, prohibition on cumulative voting, and powers granted to the
board of directors. |
The
foregoing description of the A&R Charter does not purport to be
complete and is qualified entirely by reference to the full text of
the A&R Charter, which is attached hereto as Exhibit 3.1 and is
incorporated by reference herein.
Amended and Restated Bylaws
Pursuant
to the Tender Agreement, effective as of the effective time of the
Offer, the Company adopted amended and restated bylaws (the
“Amended and Restated Bylaws”).
Advance
Notice of Stockholder Business
The
Amended and Restated Bylaws have revised advance notice procedures
for stockholders. Pursuant to the Amended and Restated Bylaws, only
such business shall be conducted as shall have been properly
brought before the annual meeting of Company stockholders. To be
properly brought before an annual meeting, business must be
brought: (A) pursuant to the Company’s proxy materials with respect
to such meeting, (B) by or at the direction of the Board, or (C) by
a stockholder of the Company who (1) is a stockholder of record at
the time of the giving of the notice and on the record date for the
determination of stockholders entitled to vote at the annual
meeting and (2) has timely complied in proper written form with the
notice procedures set forth in the Amended and Restated Bylaws. In
addition, for business to be properly brought before an annual
meeting by a stockholder, such business must be a proper matter for
stockholder action pursuant to the Amended and Restated Bylaws and
applicable law. Except for proposals properly made in accordance
with Rule 14a-8 under the Securities and Exchange Act of 1934, and
the rules and regulations thereunder (as so amended and inclusive
of such rules and regulations, the “Exchange Act”),
clause (C) above shall be the exclusive means for a stockholder to
bring business before an annual meeting of stockholders.
A
stockholder’s notice must set forth all information required under
Section 2.4(i) of the Amended and Restated Bylaws and must be
timely received by the secretary of the Company. To be timely, a
stockholder’s notice must be received by the secretary at the
principal executive offices of the Company not later than the 45th
day nor earlier than the 75th day before the one-year anniversary
of the date on which the Company first mailed its proxy materials
or a notice of availability of proxy materials (whichever is
earlier) for the preceding year’s annual meeting; provided,
however, that in the event that no annual meeting was held in the
previous year or if the date of the annual meeting is advanced by
more than 30 days prior to or delayed by more than 60 days after
the one-year anniversary of the date of the previous year’s annual
meeting, then, for notice by the stockholder to be timely, it must
be so received by the secretary not earlier than the close of
business on the 120th day prior to such annual meeting and not
later than the close of business on the later of (i) the 90th day
prior to such annual meeting, or (ii) the tenth day following the
day on which Public Announcement (which is a disclosure in a press
release reported by the Dow Jones News Service, Associated Press or
a comparable national news service or in a document publicly filed
by the Corporation with the SEC pursuant to Section 13, 14 or 15(d)
of the Exchange Act) of the date of such annual meeting is first
made. In no event shall any adjournment or postponement of an
annual meeting or the announcement thereof commence a new time
period for the giving of a stockholder’s notice.
To be
in proper written form, a stockholder’s notice to the secretary
must set forth as to each matter of business the stockholder
intends to bring before the annual meeting: (1) a brief description
of the business intended to be brought before the annual meeting,
the text of the proposed business (including the text of any
resolutions proposed for consideration) and the reasons for
conducting such business at the annual meeting, (2) the name and
address, as they appear on the Company’s books, of the stockholder
proposing such business, (3) the class and number of shares of the
Company that are held of record or are beneficially owned by the
stockholder and any derivative positions held or beneficially held
by the stockholder as of the date of delivery of such notice, (4)
whether and the extent to which any hedging or other transaction or
series of transactions has been entered into by or on behalf of
such stockholder with respect to any securities of the Company, and
a description of any other agreement, arrangement or understanding
(including any short position or any borrowing or lending of
shares), the effect or intent of which is to mitigate loss to, or
to manage the risk or benefit from share price changes for, or to
increase or decrease the voting power of, such stockholder with
respect to any securities of the Company, (5) any material interest
of the stockholder in such business, and (6) a statement whether
either such stockholder will deliver a proxy statement and form of
proxy to holders of at least the percentage of the voting power of
the Company’s voting shares required under applicable law to carry
the proposal (such information provided and statements made as
required by clauses (1) through (6), a “Business Solicitation
Statement”). In addition, to be in proper written form, a
stockholder’s notice to the secretary must be supplemented not
later than ten days following the record date for notice of the
meeting to disclose the information contained in clauses (3) and
(4) above as of the record date for notice of the
meeting.
Advance
Notice of Director Nominations at Annual Meetings
Nominations
of persons for election or re-election to the Board shall be made
at an annual meeting of stockholders only (A) by or at the
direction of the Board or (B) by a stockholder of the Company who
(1) was a stockholder of record at the time of the giving of the
notice required and on the record date for the determination of
stockholders entitled to vote at the annual meeting and (2) has
complied with the notice procedures. In addition to any other
applicable requirements, for a nomination to be made by a
stockholder, the stockholder must have given timely notice thereof
in proper written form to the secretary of the Company.
To
comply with clause (B) of the above, a nomination to be made by a
stockholder must set forth all information required and must be
received by the secretary of the Company at the principal executive
offices of the Company at the time set forth in, and in accordance
with, the final three sentences of Section 2.4(i)(a) in the Amended
and Restated Bylaws; provided additionally, however, that in the
event the number of directors to be elected to the board of
directors is increased and there is no Public Announcement naming
all of the nominees for director or specifying the size of the
increased board made by the Company at least ten (10) days before
the last day a stockholder may deliver notice of nomination
pursuant to the foregoing provisions, a stockholder’s notice shall
also be considered timely, but only with respect to nominees for
any new positions created by such increase, if it shall be received
by the secretary at the principal executive offices of the Company
not later than the close of business on the tenth day following the
date on which such Public Announcement is first made by the
Company.
Advance
Notice of Director Nominations for Special Meetings
If
the Board has authorized in the specific case that stockholders may
fill a vacancy or newly created directorship at a special meeting
of stockholders, and a special meeting has been properly called for
such purpose, nominations of persons for election or appointment to
the Board at such special meeting shall be made only (1) by or at
the direction of the Board or (2) by any stockholder of the Company
who (A) is a stockholder of record at the time of the giving of the
notice and on the record date for the determination of stockholders
entitled to vote at the special meeting and (B) delivers a timely
written notice of the nomination to the secretary of the Company.
To be timely, such notice must be received by the secretary at the
principal executive offices of the Company not later than the close
of business on the later of the 90th day prior to such special
meeting or the tenth day following the day on which Public
Announcement is first made of the date of the special meeting and
of the nominees proposed by the board of directors to be elected or
appointed at such meeting.
The
foregoing description of the Amended and Restated Bylaws does not
purport to be complete and is qualified entirely by reference to
the full text of the Amended and Restated Bylaws, which is attached
hereto as Exhibit 3.4 and is incorporated by reference
herein.
New CUSIP Numbers
In
connection with the Offer and the Reverse Stock Split, the Common
Stock possesses a new CUSIP number (29405E 109), and the AMRHW
Warrants possess a new CUSIP number (29405E 117).
Press Releases
On December 30, 2020, the Company issued a press release announcing
the Reverse Stock Split. On December 31, 2020, the Company issued a
press release announcing the completion of the Offer. Copies of
such press releases are attached hereto as Exhibits 99.1 and 99.2
and are incorporated by reference herein.
|
Item
9.01. |
Financial
Statements and Exhibits. |
|
|
(a) |
Financial
Statements of Business Acquired. |
The
Company will file the financial statements required to be filed by
this Item 9.01(a) not later than seventy-one (71) days after the
date on which this Current Report on Form 8-K is required to be
filed.
|
|
(b) |
Pro
Forma Financial Information. |
The
Company will file the financial statements required to be filed by
this Item 9.01(b) not later than seventy one (71) days after the
date on which this Current Report on Form 8-K is required to be
filed.
(d)
Exhibits.
|
Exhibit
No. |
|
Description |
| 2.1 |
|
TENDER
OFFER SUPPORT AGREEMENT AND TERMINATION OF AMALGAMATION AGREEMENT,
dated August 12, 2020, by and among Ameri, Jay Pharma Merger Sub,
Inc., Jay Pharma Inc., 1236567 B.C. Unlimited Liability Company and
Barry Kostiner, as the Ameri representative (incorporated by
reference to Exhibit 2.5 to the Company’s Form S-4 filed with the
Securities and Exchange Commission on August 12,
2020) |
| 2.2 |
|
AMENDMENT
NO. 1 to TENDER OFFER SUPPORT AGREEMENT AND TERMINATION OF
AMALGAMATION AGREEMENT, dated December 18, 2020, by and among
Ameri, Jay Pharma Merger Sub, Inc., Jay Pharma Inc., 1236567 B.C.
Unlimited Liability Company and Barry Kostiner, as the Ameri
representative (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 18, 2020) |
| 2.3 |
|
Share
Purchase Agreement, dated January 10, 2020, by and between Ameri
Holdings, Inc. and Ameri100, Inc. (incorporated by reference to
Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 13,
2020) |
| 3.1 |
|
Amended
and Restated Certificate of Incorporation, effective December 30,
2020 |
| 3.2 |
|
Certificate
of Amendment to Amended and Restated Certificate of Incorporation,
effective December 30, 2020 |
| 3.3 |
|
Series
B Preferred Stock Certificate of Designations, effective December
30, 2020 |
| 3.4 |
|
Amended
and Restated Bylaws, effective December 30, 2020 |
| 10.1 |
|
Employment
Agreement, by and between the Company and David Johnson, dated
January 10, 2020 |
| 10.2 |
|
Employment
Agreement, by and between the Company and Avani Kanubaddi, dated
December 2, 2020 |
| 10.3 |
|
Employment
Agreement, by and between the Company and Robert Wilkins, dated
December 22, 2020 |
| 10.4 |
|
Consulting
Agreement, by and between the Company and Barry Kostiner, dated
December 29, 2020 |
| 10.5 |
|
Enveric
Biosciences, Inc. 2020 Long-Term Equity Incentive
Plan |
| 10.6 |
|
Form
of RSU Award Agreement |
| 99.1 |
|
Press
Release, issued December 30, 2020 |
| 99.2 |
|
Press
Release, issued December 31, 2020 |
* *
*
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
| |
|
ENVERIC BIOSCIENCES, INC. |
| |
|
|
|
| Date: |
January
6, 2021 |
By: |
/s/
David Johnson |
| |
|
|
David
Johnson |
| |
|
|
Chief
Executive Officer and Chairman of the Board of
Directors |
