SUMMARY

 

This summary highlights selected information from this proxy statement/prospectus and may not contain all of the information that is important to you. You are urged to carefully read this entire document, including the Annexes, and the other documents to which we refer for a more complete understanding of the Amalgamation. In addition, ENVB encourages you to read the information in the section entitled “ENVB’s Business,” which includes important business and financial information about ENVB, and to read the information in the section entitled “MagicMed’s Business,” which includes important business and financial information about MagicMed, beginning on pages 150 and 188, respectively, of this proxy statement/prospectus. Each item in this summary refers to the page of this proxy statement/prospectus on which that subject is discussed in more detail.

 

This summary and the balance of this document contain forward-looking statements about events that are not certain to occur, and you should not place undue reliance on those statements. Please carefully read “Cautionary Statement Regarding Forward-Looking Statements” on page 85 of this document.

 

The Parties to the Amalgamation (see page 92)

 

Enveric Biosciences, Inc.

 

Enveric Biosciences, Inc. is a Delaware corporation with its headquarters in Naples, Florida. ENVB is an early-development-stage biosciences company with an initial focus on developing innovative, evidence-based prescription products and combination therapies containing cannabinoids to address unmet needs in cancer care. ENVB seeks to improve the lives of patients suffering from cancer, initially by developing palliative and supportive care products for people suffering from certain side effects of cancer and cancer treatment such as pain or skin irritation. ENVB intends to offer such palliative and supportive care products in the United States, following approval through established regulatory pathways. ENVB is also aiming to advance a pipeline of novel cannabinoid combination therapies for hard-to-treat cancers, including glioblastoma multiforme (GBM) and several other indications which are currently being researched.

 

ENVB’s principal executive offices are located at 4851 Tamiami Trail N, Suite 200 in Naples, Florida 34103 and its telephone number is (239) 302-1707. ENVB common stock trades on the NASDAQ Capital Market under the symbol “ENVB.”

 

HoldCo

 

1306432 B.C. Ltd. is a wholly-owned subsidiary of ENVB that was incorporated on May 20, 2021 under the BCBCA solely for the purpose of entering into the Amalgamation Agreement and effecting the Amalgamation and the other transactions contemplated by the Amalgamation Agreement. It is not engaged in any business and has no material assets, liabilities or other obligations of any nature other than as set forth in the Amalgamation Agreement.

 

HoldCo’s principal executive offices are located at 4851 Tamiami Trail N, Suite 200 in Naples, Florida 34103 and its telephone number is (239) 302-1707. HoldCo’s registered office is located at 666 Burrard St., Suite 1700, Vancouver, British Columbia, V6C 2X8.

 

Purchaser

 

1306436 B.C. Ltd. is an indirect, wholly-owned subsidiary of ENVB that was incorporated on May 20, 2021 under the BCBCA solely for the purpose of entering into the Amalgamation Agreement and effecting the Amalgamation and the other transactions contemplated by the Amalgamation Agreement. It is not engaged in any business and has no material assets, liabilities or other obligations of any nature other than as set forth in the Amalgamation Agreement.

 

Purchaser’s principal executive offices are located at 4851 Tamiami Trail N, Suite 200 in Naples, Florida 34103 and its telephone number is (239) 302-1707. Purchaser’s registered office is located at 666 Burrard St., Suite 1700, Vancouver, British Columbia, V6C 2X8.

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MagicMed Industries Inc.

 

MagicMed is a neuro-pharmaceutical drug discovery and development platform. MagicMed has focused on assembling a portfolio of intellectual property (referred to as the PsybraryTM described further below) relating to the synthesis, production and manufacturing of novel psychedelic molecular compounds and derivatives (“Psychedelic Derivatives”) along with processes relating to their synthesis, production and manufacturing. These Psychedelic Derivatives are intended to be essential building blocks in the development of psychedelic therapies and medicines for diverse psychological and neuropsychiatric indications. MagicMed considers its business and related activities to be typical for a biopharma business focused on preclinical drug discovery and development. MagicMed’s business is centered on the development of the PsybraryTM, a proprietary physical and knowledgebase collection of novel Psychedelic Derivative drug candidates, manufacturing methods, pharmacological data, and patent filings that protect the foregoing. MagicMed has 13 patent applications filed for derivatives of psilocybin and DMT, 2 patent applications filed for derivatives of mescaline and MDMA with further intellectual property protection for mescaline, MDMA, ibogaine and LSD in process.

 

MagicMed’s principal executive offices are located at 777 Hornby Street, Suite 600, Vancouver, British Columbia, V6Z 1S and its telephone number is (508) 627-0485. MagicMed Shares are not traded on a national securities exchange.

 

The Amalgamation Agreement (see page 111 and Annex A)

 

On May 24, 2021, ENVB, HoldCo, Purchaser, and MagicMed entered into an Amalgamation Agreement. The Amalgamation Agreement is a legal document governing the Amalgamation and is included in this proxy statement/prospectus as Annex A. All descriptions in this summary and elsewhere in this proxy statement/prospectus of the terms and conditions of the Amalgamation are qualified in their entirety by reference to the full text of the Amalgamation Agreement. Please read the Amalgamation Agreement carefully for a more complete understanding of the Amalgamation.

 

The Amalgamation (see page 93)

 

Pursuant to the Amalgamation Agreement, at the effective time of the Amalgamation, Purchaser, a wholly owned subsidiary of HoldCo, will be amalgamated with MagicMed. Upon completion of the Amalgamation, the separate corporate existences of Purchaser and MagicMed will cease, and the surviving corporation (“AmalCo”) will be a wholly owned subsidiary of HoldCo under the name “Enveric Biosciences Canada Inc.”

  

Consideration to MagicMed Shareholders (see page 93)

 

At the effective time of the Amalgamation (the “Effective Time”), each outstanding common share of MagicMed (the “MagicMed Shares”) held by MagicMed shareholders will be converted into one fully paid and non-assessable AmalCo redeemable preferred share, which shall immediately following the Amalgamation be redeemed by AmalCo for the AmalCo redemption consideration. Immediately following the redemption of the AmalCo redeemable preferred shares, each holder of MagicMed Shares shall receive from ENVB as additional consideration for the disposition of their MagicMed Shares that number of shares of ENVB common stock equal to the product of the Exchange Ratio multiplied by the number of MagicMed Shares held by such MagicMed shareholder (collectively, the “Amalgamation Consideration”).

 

At the Effective Time of the Amalgamation, each outstanding MagicMed option shall be amended such that each holder of MagicMed options shall be entitled to receive, for each option held, that number of shares of ENVB common stock equal to the product of the Exchange Ratio multiplied by the number of MagicMed Shares subject to such option. Such options (the “Converted Options”) shall have an exercise price per share of ENVB common stock equal to the exercise price per MagicMed Share of such option immediately prior to the effective time divided by the Exchange Ratio, rounded up to the nearest whole cent.

 

Following the Effective Time of the Amalgamation, each holder of a MagicMed warrant shall be entitled to receive (and such holder shall accept) upon the exercise of such holder’s warrants, in lieu of MagicMed Shares to which such holder was theretofore entitled upon such exercise, and for the same aggregate consideration payable therefor, that number of shares of ENVB common stock which the holder would have been entitled to receive as a result of the amalgamation if, immediately prior to the effective time of the amalgamation, 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 of the amalgamation. The terms of the options and warrants have not yet been finalized. Once the terms of the options and warrants are finalized, this may or may not impact the classification and accounting for such options and warrants.

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ENVB will not issue any fractional shares of ENVB common stock in the Amalgamation. In lieu of such fractional shares, (a) the number of shares of ENVB common stock to be received by a MagicMed shareholder will be rounded up to the nearest whole share of ENVB common stock for MagicMed shareholders entitled to receive a fractional share representing one-half (1/2) or more of a share of ENVB common stock, or (b) the number of shares of ENVB common stock to be received by a MagicMed shareholder will be rounded down to the nearest whole share of ENVB common stock in the event that a MagicMed shareholder is entitled to receive a fractional share representing less than one-half (1/2) of share of ENVB common stock. After the Amalgamation is completed, MagicMed equity holders will have only the right to receive the Amalgamation Consideration and will no longer have any rights as MagicMed stockholders, including voting or other rights.

 

For a full description of the Amalgamation Consideration, see the sections titled “The Amalgamation Agreement—Effects of Amalgamation; Amalgamation Consideration” on page 111; “—Treatment of MagicMed Shares” on page 112, “—Treatment of MagicMed Stock Options” beginning on page 112, and “—Treatment of MagicMed Warrant” on page 113 of this proxy statement/prospectus.

 

Comparative Per Share Market Price and Dividend Information (see page 44)

 

ENVB common stock is listed on The NASDAQ Capital Market under the symbol “ENVB.” Currently there is no established public trading market for MagicMed Shares. The following table sets forth the closing sale prices per share of ENVB common stock on May 21, 2021, the last full trading day immediately preceding the public announcement of the Amalgamation Agreement, and on August 2, 2021, the latest practicable date prior to the date of this proxy statement/prospectus.

 

		ENVB Common Stock				MagicMed Common Stock
May 21, 2021		$	2.72				N/A
August 2, 2021		$	1.91				N/A

 

Recommendation of the ENVB Board of Directors; ENVB’s Reasons for the Transactions (see page 98)

 

After careful consideration, the ENVB board of directors has (i) determined that the Amalgamation Agreement and the other transactions contemplated thereby, including the Amalgamation of Purchaser with MagicMed and the issuance of ENVB common stock contemplated by the ENVB Share Issuance Proposal, are advisable and in the best interests of ENVB and the ENVB stockholders, (ii) authorized and approved ENVB’s execution, delivery and performance of the Amalgamation Agreement in accordance with its terms and ENVB’s consummation of the transactions contemplated thereby, including the Amalgamation and the issuance of ENVB common stock contemplated by the ENVB Share Issuance Proposal, (iii) resolved that the approval of the ENVB Share Issuance Proposal be submitted to a vote at a meeting of the holders of ENVB common stock and (iv) recommended that the holders of ENVB common stock approve the ENVB Share Issuance Proposal. ENVB’s board of directors unanimously recommends that ENVB stockholders vote “FOR” the ENVB Share Issuance Proposal and “FOR” the ENVB Adjournment Proposal. For the factors considered by ENVB’s board of directors in reaching its decision to approve the Amalgamation and Amalgamation Agreement, see the section titled “The Amalgamation—Recommendation of the ENVB Board of Directors; ENVB’s Reasons for the Transactions” beginning on page 98 of this proxy statement/prospectus.

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The ENVB Annual Meeting (see page 86)

 

The ENVB annual meeting will be held virtually on September 14, 2021, at 10:00 a.m., Eastern Time. At the annual meeting, ENVB stockholders will be asked to consider and vote upon the following matters:

 

	(1)	the election of five directors, to serve until the Company’s 2022 annual meeting of stockholders and until their successors are duly elected and qualified;
	(2)	a proposal to approve the ENVB Share Issuance Proposal;
	(3)	a proposal to approve the Say-on-Pay Proposal;
	(4)	a proposal to approve the Auditor Ratification Proposal; and
	(5)	a proposal to approve the ENVB Adjournment Proposal;

 

Only the holders of record of shares of ENVB common stock at the close of business on July 30, 2021 (the “Record Date”) will be entitled to vote at the ENVB annual meeting. Each share of ENVB common stock is entitled to one vote on each proposal to be considered at the ENVB annual meeting. As of the Record Date, there were 21,432,415 shares of ENVB common stock outstanding and entitled to vote at the ENVB annual meeting.

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As of the close of business on the Record Date, the directors and executive officers of ENVB and their affiliates were entitled to vote zero (0) shares of ENVB common stock. In accordance with the voting agreements entered into between the directors and executive officers of ENVB and MagicMed, ENVB currently expects that ENVB’s directors and executive officers will vote their shares in favor of the ENVB Share Issuance Proposal and the ENVB Adjournment Proposal.

 

Provided a quorum is present (except with respect to the ENVB Adjournment Proposal):

 

Election of Directors – Directors are elected by a plurality of the votes cast, and the five nominees who receive the greatest number of favorable votes of the holders of the common stock cast in the Election of Directors at the ENVB annual meeting will be elected directors to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified. Failures to vote, broker non-votes and abstentions will have no effect on such proposal. 

 

ENVB Share Issuance Proposal - The approval of the ENVB Share Issuance Proposal requires the affirmative vote of a majority of the votes cast by holders of ENVB’s common stock as of the Record Date. Failures to vote, broker non-votes and abstentions will have no effect on such proposal.

 

Say-on-Pay Proposal - The approval of the Say-on-Pay Proposal requires the favorable vote of the holders of a majority of the common stock having voting power present in person or represented by proxy and entitled to vote on the proposal. Failures to vote and abstentions will have the same effect as a vote cast “AGAINST” the approval of such proposal; however, broker non-votes will have no effect on such proposal.

 

Auditor Ratification Proposal - The ratification of the appointment of our independent auditors requires the affirmative vote of the holders of a majority of the ENVB common stock having voting power present in person or represented by proxy at the ENVB annual meeting and entitled to vote thereon. Failures to vote and abstentions will have the same effect as a vote cast “AGAINST” the approval of such proposal. The approval of the Auditor Ratification Proposal is a routine proposal on which a broker or other nominee is generally empowered to vote in the absence of voting instructions from the beneficial owner, so broker non-votes are unlikely to result from Proposal 4.

 

ENVB Adjournment Proposal - Whether or not a quorum is present, the approval of the ENVB Adjournment Proposal requires the affirmative vote of a majority of the voting power of the shares of ENVB common stock present in person or represented by proxy at the ENVB annual meeting and entitled to vote on the proposal. Failures to vote and abstentions will have the same effect as a vote cast “AGAINST” the approval of such proposal. The approval of the ENVB Adjournment Proposal is a routine proposal on which a broker or other nominee is generally empowered to vote in the absence of voting instructions from the beneficial owner, so broker non-votes are unlikely to result from Proposal 5.

 

If you are a stockholder of record and you do not sign and return your proxy card or vote over the Internet, by telephone or at the ENVB annual meeting, your shares will not be voted at the ENVB annual meeting, will not be counted as present in person or by proxy at the ENVB annual meeting and will not be counted as present for purposes of determining whether a quorum exists.

 

Interests of ENVB’s Directors and Executive Officers in the Amalgamation

 

Other than with respect to continued service for, employment by and the right to continued indemnification by ENVB, as of the date of this proxy statement/prospectus, ENVB’s directors and executive officers do not have interests in the Amalgamation that are different from, or in addition to, the interests of other ENVB stockholders generally. The ENVB board of directors was aware of and considered these factors, among other matters, in determining that the terms of the Amalgamation Agreement and the Amalgamation are fair to and in the best interests of ENVB and ENVB stockholders, approving and adopting the Amalgamation Agreement and the transactions contemplated thereby, including the Amalgamation and the shares of ENVB common stock to be issued in connection with the ENVB Share Issuance Proposal, and recommending that the ENVB stockholders approve the ENVB Share Issuance Proposal.

 

For a more complete description of these interests, see “The Amalgamation—Interests of ENVB’s Directors and Executive Officers in the Amalgamation” and “The Amalgamation—Governance of ENVB After the Amalgamation” beginning on page 108 of this proxy statement/prospectus.

 

Interests of Executive Officers and Directors of MagicMed in the Amalgamation (see page 107)

 

Certain of MagicMed’s directors and officers have interests in the Amalgamation and have arrangements that are different from, or in addition to, those of MagicMed equity holders generally.

 

These interests include:

 

●

the employment agreement with ENVB and related appointment of Dr. Joseph Tucker, the President and Chief Executive Officer of MagicMed; Dr. Peter Facchini, Chief Scientific Officer of MagicMed; and Dr. Jillian Hagel, Chief Technology Officer of MagicMed, to the positions of Chief Executive Officer, Chief Scientific Officer, and Chief Technology Officer of ENVB, respectively, upon the effective time of the Amalgamation;

 

●

the appointment of Dr. Joseph Tucker and Brad Thompson, directors of MagicMed, to the ENVB board of directors upon the effective time of the Amalgamation;

 

●

each of Dr. Tucker, Dr. Facchini and Dr. Hagel have agreed to waive their rights to certain payments upon a change of control of MagicMed pursuant to the terms of their respective employment agreement with MagicMed to which they may have been entitled;

 

●

pursuant to the terms of the Amalgamation Agreement, MagicMed’s current and former directors and officers will be entitled to certain ongoing indemnification and insurance coverage for their prior acts for a period of time after the Effective Time and MagicMed may purchase directors’ and officers’ “run-off” insurance to further supplement any current coverage in connection with the Amalgamation; and

 

●

certain of MagicMed’s shareholders who have entered into voting agreements with ENVB, pursuant to which, among other things, such shareholders have agreed to vote or to execute and deliver a written consent with respect to all the MagicMed shares owned by them as of the applicable record date in favor of the adoption and approval of the Amalgamation Agreement and Amalgamation, are affiliated with directors of MagicMed.

 

For a more complete description of these interests, see “The Amalgamation—Interests of MagicMed’s Directors and Executive Officers in the Amalgamation and “The Amalgamation—Governance of ENVB After the Amalgamation” beginning on pages 107 and 108, respectively of this proxy statement/prospectus.

 

Governance of ENVB After the Amalgamation (see page 108)

 

The directors and officers of ENVB immediately prior to the effective time of the Amalgamation will continue to be directors and officers of ENVB immediately following the Amalgamation. Pursuant to the terms of the Amalgamation Agreement, ENVB has agreed to appoint Dr. Joseph Tucker and Dr. Brad Thompson, both directors of MagicMed, to the ENVB board of directors upon the effective time of the Amalgamation. In addition, at the effective time of the Amalgamation, Dr. Joseph Tucker, the President and Chief Executive Officer of MagicMed; Dr. Peter Facchini, Chief Scientific Officer of MagicMed; and Dr. Jillian Hagel, Chief Technology Officer of MagicMed, will be appointed to the positions of Chief Executive Officer, Chief Scientific Officer, and Chief Technology Officer of ENVB, respectively.

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Appraisal Rights (see page 110)

 

ENVB stockholders are not entitled to appraisal or dissenters’ rights in connection with the Amalgamation.

 

No Solicitation (see page 118)

 

Each of ENVB and MagicMed agreed that, subject to certain exceptions, during the pre-closing period, ENVB and MagicMed and any of their respective subsidiaries will not, whether directly or indirectly, through their respective officers, directors, employees, representatives or other agents retained by ENVB, MagicMed or their respective subsidiaries, or otherwise, and will not permit any such person to:

 

	●	solicit, assist, initiate, encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of ENVB, MagicMed and their respective subsidiaries or entering into any form of agreement, arrangement or understanding) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an acquisition proposal;
	●	enter into or otherwise engage or participate in any discussions or negotiations with any person (other than the parties to the Amalgamation Agreement) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an acquisition proposal for MagicMed or ENVB, provided that, for greater certainty, MagicMed and ENVB, as applicable, may advise any Person making an unsolicited acquisition proposal that such acquisition proposal does not constitute a superior proposal when applicable board has so determined;
	●	subject to certain exceptions, change the recommendation of the ENVB or MagicMed board of directors with regard the amalgamation;
	●	accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend, or take no position or remain neutral with respect to, any acquisition proposal; or
	●	accept or enter into or publicly propose to accept or enter into any agreement, understanding or arrangement in respect of an acquisition proposal.

 

However, if ENVB or MagicMed receives an acquisition proposal from a third party and the receipt of such acquisition proposal was not initiated, sought, solicited, knowingly encouraged or knowingly induced by ENVB, MagicMed or their respective subsidiaries, then ENVB or MagicMed may:

 

	●	contact the person who has made such acquisition proposal in order to clarify the terms of such acquisition proposal so that the applicable board of directors (or any committee thereof) may inform itself about such acquisition proposal;
	●	engage in discussions and negotiations with the person making the proposal, its representatives and potential financing sources; and
	●	furnish information concerning its business, properties or assets to any person pursuant to a confidentiality agreement, and negotiate and participate in discussions and negotiations with such person concerning an acquisition proposal if the applicable board of directors determines in good faith that such acquisition proposal constitutes a “superior proposal.”

 

The receiving party must provide prompt notice to the other party of any acquisition proposal and terms and conditions of the superior proposal, and a list of, and, at the request of the responding party, copies of, the information provided to such person and immediately provided with access to similar information to which such person was provided. The receiving party agrees that it will not accept, approve or enter into any agreement, other than a confidentiality and standstill agreement as contemplated by the Amalgamation Agreement, with any person providing for or to facilitate any acquisition proposal unless:

 

	●	the board of directors of the receiving party determines that the acquisition proposal constitutes a Superior Proposal;
	●	in respect of MagicMed, the MagicMed special meeting has not occurred;
	●	in respect of ENVB, the ENVB annual meeting has not occurred;
	●	the receiving party has provided the responding party with a notice in writing that there is a superior proposal together with all documentation related to and detailing the superior proposal;
	●	ten business days shall have elapsed from the date the responding party received the notice and documentation referred to in the Amalgamation Agreement from receiving party and, if the responding party has proposed to amend the terms of the Amalgamation Agreement and the transaction in accordance with the Amalgamation Agreement, the board of directors of the receiving party shall have determined, in good faith, after consultation with its financial advisors and outside legal counsel, that the acquisition proposal continues to constitute a superior proposal compared to the proposed amendment to the terms of the Amalgamation Agreement and the transactions contemplated thereby by the responding party; and
	●	the receiving party terminates the Amalgamation Agreements by paying the amounts required thereunder pursuant to the terms of the Amalgamation Agreement.

 

If either ENVB or MagicMed accepts a superior proposal, such party is required to pay $4.5 million pursuant to the termination fee payment terms therein.

 

Conditions to Completion of the Amalgamation (see page 114)

 

Each party’s obligation to complete the amalgamation is subject to the satisfaction or waiver by each of the parties, at or prior to the closing of the amalgamation, of various conditions, which include, in addition to other customary closing conditions, the following:

 

	●	the affirmative vote of not less than 66 2/3% of the votes cast at the MagicMed special meeting or represented by proxy for the approval of the MagicMed Amalgamation Proposal;
	●	the approval by ENVB stockholders of the ENVB Share Issuance Proposal and related amalgamation;
	●	no temporary restraining order, preliminary or permanent injunction or other order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the amalgamation will be in effect, nor will any legal action or proceeding brought by any administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, seeking any of the foregoing be pending. There will not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the amalgamation, which makes the consummation of the amalgamation illegal;
	●	each required regulatory approval has been made, given or obtained and each such regulatory approval is in force and has not been modified. Any waiting period applicable to the consummation of the amalgamation under any regulatory approval will have expired or been terminated;
	●	the shares of ENVB common stock issued in connection with the amalgamation shall have been approved for listing on NASDAQ; and
	●	a registration statement on Form S-4 (including a prospectus) in connection with the issuance of shares of ENVB common stock as amalgamation consideration in the amalgamation, which will include a proxy statement to be sent to the stockholders of ENVB shall have become effective under the Securities Act, and shall not be the subject of any stop order.

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The obligation of ENVB and Purchaser to complete the amalgamation is subject to the satisfaction or waiver of the following additional conditions:

 

	●	the representations and warranties of MagicMed in the Amalgamation Agreement qualified as to materiality shall be true and correct in all respects, and those not so qualified shall be true and correct in all material respects as of the date of the Amalgamation Agreement and the closing date as though made on and as of the date of the Amalgamation Agreement and the closing date (as applicable), except to the extent such representations and warranties speak as of another date (in which case, such representations and warranties shall be true and correct as of such date);
	●	MagicMed shall have performed or complied with in all material respects with each of the covenants of MagicMed contained in the Amalgamation Agreement to be fulfilled or complied with by it on or prior to the closing of the amalgamation;
	●	MagicMed shall have delivered certain certificates and other documents required under the Amalgamation Agreement for the closing of the amalgamation;
	●	MagicMed shall have delivered audited financial statements for fiscal year 2020 and year-to-date 2021 in accordance with U.S. GAAP to ENVB as required by SEC rules, as well as any other financial statements as may be required by the rules and regulations of the Securities Act and the Exchange Act;
	●	no legal action or proceeding can be pending or threatened (excluding any such action or proceeding initiated by ENVB) to (a) cease trade, enjoin, prohibit, or impose any limitations, damages or conditions on, the Purchaser’s ability to acquire, hold, or exercise full rights of ownership over, any MagicMed Shares, including the right to vote the MagicMed Shares, (b) prohibit, restrict or impose terms or conditions on, the amalgamation, or the ownership or operation by ENVB and the Purchaser of the business or assets of ENVB, HoldCo, the Purchaser, MagicMed or their respective subsidiaries, or compel ENVB or the Purchaser to dispose of or hold separate any of the business or assets of ENVB, HoldCo, the Purchaser, MagicMed or their respective subsidiaries as a result of the amalgamation, or (c) prevent or materially delay the consummation of the amalgamation, or if the amalgamation were to be consummated, have a material adverse effect with respect to MagicMed or its subsidiaries;
	●	there shall not have been any result, change, event, occurrence, effect, state of facts or circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the Amalgamation Agreement) that, either individually or in the aggregate is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, condition (financial or otherwise) or liabilities (contingent or otherwise) or prospects of MagicMed and its subsidiaries, taken as a whole, and would, or would be reasonably expected to, prevent or materially delay MagicMed from consummating the transactions contemplated by the Amalgamation Agreement by December 31, 2021, except any such change, event, occurrence, effect, state of facts or circumstance resulting from or relating to: (a) any change in general political, economic, financial, currency exchange, securities, capital or credit market conditions in Canada or the United States; (b) any change or proposed change in applicable laws, IFRS or U.S. GAAP; (c) any change affecting the industries or markets in which MagicMed operates; (d) any natural disaster or the commencement or continuity of any act of war, armed hostilities or acts of terrorism; (e) the announcement of the Amalgamation Agreement or the transactions contemplated thereby; (f) any action taken (or omitted to be taken) by MagicMed or its subsidiaries which is required to be taken (or omitted to be taken) pursuant to the Amalgamation Agreement; (g) any change in the market price or trading volume of any securities of MagicMed (it being understood that the causes underlying such change in market price or trading volume may be taken into account in determining whether a material adverse effect has occurred); (h) any epidemic, pandemic, disease outbreak (including COVID-19), other health crisis or public health event; or (i) any matter which has been publicly disclosed or communicated in writing by MagicMed to ENVB as of the date of the Amalgamation Agreement and ENVB has acknowledged receipt of such written communication; provided, however, that with respect to clauses; (a) through to and including (c), such matters do not have a materially disproportionate effect on MagicMed and its subsidiaries, taken as a whole, relative to companies of similar size operating in the industries or markets in which MagicMed operates (in which case the incremental disproportionate effect may be taken into account in determining whether there has been, or is reasonably expected to be, a material adverse effect), and provided further, however, that unless expressly provided in any particular section of the Amalgamation Agreement, references in certain sections of the Amalgamation Agreement to dollar amounts are not intended to be, and shall be deemed not to be, illustrative or interpretive for the purpose of determining whether a “Material Adverse Effect” has occurred;

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	●	MagicMed shall have unencumbered, unrestricted cash on hand of at least C$4,000,000 minus any cash expended or to be expended on reasonable and documented out-of-pocket costs primarily related to the transaction contemplated by the Amalgamation Agreement; and
	●	evidence in form and substance reasonably satisfactory to ENVB that (i) MagicMed shall have obtained or made any consent, approval, order or authorization of, or registration, declaration or filing with, any governmental authority required to be obtained or made in connection with the execution and delivery of the Amalgamation Agreement or the consummation of the transactions contemplated hereby and (ii) MagicMed shall have obtained all consents, waivers and approvals set forth on Schedule 8.2(l) of the Amalgamation Agreement in a form and substance reasonably satisfactory to ENVB and copies thereof shall have been delivered to ENVB.

 

The obligation of MagicMed to complete the amalgamation is subject to the satisfaction or waiver of the following additional conditions:

 

	●	the representations and warranties of ENVB and the Purchaser set forth in the Amalgamation Agreement shall be true and correct as of the date of the Amalgamation Agreement and the closing date as though made on and as of the date of the Amalgamation Agreement and the closing date (as applicable), except to the extent such representations and warranties speak as of another date (in which case, such representations and warranties shall be true and correct as of such date);
	●	ENVB and Purchaser shall have fulfilled or complied in all material respects with each of the covenants of ENVB and the Purchaser contained in this Agreement to be fulfilled or complied with by it on or prior to the closing of the amalgamation;
	●	ENVB and Purchaser shall have delivered certain certificates and other documents required under the Amalgamation Agreement for the closing of the amalgamation;
	●	evidence in form and substance reasonably satisfactory to MagicMed that (i) ENVB shall have obtained or made any consent, approval, order or authorization of, or registration, declaration or filing with, any governmental authority required to be obtained or made in connection with the execution and delivery of the Amalgamation Agreement or the consummation of the transactions contemplated hereby and (ii) ENVB shall have obtained all consents, waivers and approvals set forth on Schedule 8.3(f) of the Amalgamation Agreement in a form and substance reasonably satisfactory to MagicMed and copies thereof shall have been delivered to MagicMed;
	●	there shall not have been any result, change, event, occurrence, effect, state of facts or circumstance (whether or not constituting a breach of a representation, warranty or covenant set forth in the Amalgamation Agreement) that, either individually or in the aggregate is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, condition (financial or otherwise) or liabilities (contingent or otherwise) or prospects of ENVB and its subsidiaries, taken as a whole, and would, or would be reasonably expected to, prevent or materially delay ENVB from consummating the transactions contemplated by the Amalgamation Agreement by the end date, except any such change, event, occurrence, effect, state of facts or circumstance resulting from or relating to: (a) any change in general political, economic, financial, currency exchange, securities, capital or credit market conditions in Canada or the United States; (b) any change or proposed change in applicable laws, IFRS or U.S. GAAP; (c) any change affecting the industries or markets in which ENVB operates; (d) any natural disaster or the commencement or continuity of any act of war, armed hostilities or acts of terrorism; (e) the announcement of the Amalgamation Agreement or the transactions contemplated thereby; (f) any action taken (or omitted to be taken) by ENVB or its subsidiaries which is required to be taken (or omitted to be taken) pursuant to the Amalgamation Agreement; (g) any change in the market price or trading volume of any securities of ENVB (it being understood that the causes underlying such change in market price or trading volume may be taken into account in determining whether a material adverse effect has occurred); (h) any epidemic, pandemic, disease outbreak (including COVID-19), other health crisis or public health event; or (i) any matter which has been publicly disclosed or communicated in writing by ENVB to MagicMed as of the date of the Amalgamation Agreement and MagicMed has acknowledged receipt of such written communication; provided, however, that with respect to clauses; (a) through to and including (c), such matters do not have a materially disproportionate effect on ENVB and its subsidiaries, taken as a whole, relative to companies of similar size operating in the industries or markets in which ENVB operates (in which case the incremental disproportionate effect may be taken into account in determining whether there has been, or is reasonably expected to be, a material adverse effect), and provided further, however, that unless expressly provided in any particular section of the Amalgamation Agreement, references in certain sections of the Amalgamation Agreement to dollar amounts are not intended to be, and shall be deemed not to be, illustrative or interpretive for the purpose of determining whether a “Material Adverse Effect” has occurred;

 

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	●	ENVB shall have unencumbered, unrestricted cash on hand of at least $15.0 million minus any cash expended or to be expended on reasonable and documented out-of-pocket costs primarily related to the transaction contemplated by the Amalgamation Agreement;
	●	ENVB shall have prepared a Form 8-K as required by SEC rules and regulations, in a form and substance reasonably satisfactory to MagicMed; and
	●	ENVB shall have provided MagicMed evidence satisfactory to MagicMed, acting reasonably, that the appointments and elections contemplated by the Amalgamation Agreement will become effective as of the closing.

 

Neither MagicMed nor ENVB can be certain when, or if, the conditions to the amalgamation will be satisfied or waived, or that the amalgamation will be completed. See “The Amalgamation Agreement—Conditions to the Completion of the Amalgamation” on page 114 of this proxy statement/prospectus for a more complete summary of the conditions that must be satisfied prior to closing

 

Regulatory Matters (see page 110)

 

The completion of the Amalgamation is subject to:

 

	●	no temporary restraining order, preliminary or permanent injunction or other order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Amalgamation will be in effect, nor will any legal action or proceeding brought by any administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, seeking any of the foregoing be pending;
	●	there will not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Amalgamation, which makes the consummation of the Amalgamation illegal;
	●	each required regulatory approval has been made, given or obtained and each such regulatory approval is in force and has not been modified;
	●	any waiting period applicable to the consummation of the Amalgamation under any regulatory approval will have expired or been terminated; and
	●	the parties shall have obtained or made any consent, approval, order or authorization of, or registration, declaration or filing with, any governmental authority required to be obtained or made in connection with the execution and delivery of the Amalgamation Agreement or the consummation of the transactions contemplated thereby and the parties shall have obtained all consents, waivers and approvals set forth in the schedules to the Amalgamation Agreement.

 

Both ENVB and MagicMed have agreed to use their commercially reasonable efforts and cooperate to prepare and file, as promptly as possible, all necessary documentation and to obtain as promptly as practicable all regulatory and other governmental approvals or orders required or advisable to complete the transactions contemplated by the Amalgamation Agreement. Although neither ENVB nor MagicMed knows of any reason why these regulatory approvals cannot be obtained, ENVB and MagicMed cannot be certain when or if they will be obtained, as the length of the review process may vary based on, among other things, requests by regulators for additional information or materials.

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Listing of ENVB Common Stock (see page 110)

 

Pursuant to the terms of the Amalgamation Agreement, application will be made to have the shares of ENVB common stock issued to MagicMed equity holders in the Amalgamation approved for listing on the NASDAQ Capital Market.

 

Ancillary Agreements (see page 128)

 

Voting Agreements (see page 128 and Annex B-1 and Annex B-2)

 

Simultaneously with the execution of the Amalgamation Agreement, holders of approximately 30% of the MagicMed Shares entered into voting agreements with ENVB, and certain directors and executive officers of ENVB entered into voting 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. The forms of voting agreement are included in this proxy statement/prospectus as Annex B-1 and Annex B-2.

 

Lock-Up Agreements (see page 128 and Annex C-1 and Annex C-2)

 

Certain shareholders of MagicMed have also entered into lock-up agreements with ENVB pursuant to which the holders have agreed not to sell shares of ENVB common stock to be received in the Amalgamation in excess of certain limits specified in the lock-up agreements for a period of either five (5) or twenty (20) months after the effective time of the Amalgamation. The lock-up agreements will survive for five months or twenty months, respectively after the effective time of the Amalgamation. The forms of lock-up agreement are included in this proxy statement/prospectus as Annex C-1 and Annex C-2.

 

Termination of Amalgamation Agreement (see page 125)

 

The Amalgamation Agreement may be terminated at any time prior to the effective time of the amalgamation, whether before or after the required stockholder approvals to complete the amalgamation and related matters have been obtained, as set forth below:

 

	●	by mutual written consent of ENVB, Purchaser, HoldCo and MagicMed;
	●	by either MagicMed or the Purchaser if the ENVB stockholder approval is not obtained at the ENVB annual meeting of the stockholders; provided, however, that neither MagicMed or the Purchaser may terminate the Amalgamation Agreement if the failure to obtain such approval was caused by, or is a result of, a breach by such terminating party of its representations or warranties or failure to perform its covenants or agreements under the Amalgamation Agreement;
	●	by either MagicMed or the Purchaser if the MagicMed shareholder approval is not obtained at the MagicMed special meeting; provided, however, that neither MagicMed or the Purchaser may terminate the Amalgamation Agreement if the failure to obtain such approval was caused by, or is a result of, a breach by such terminating party of its representations or warranties or failure to perform its covenants or agreements under the Amalgamation Agreement;

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	●	by either MagicMed or the Purchaser if, after the date of the Amalgamation Agreement, any applicable law is enacted, made, enforced or amended that makes the consummation of the amalgamation illegal or otherwise permanently prohibits or enjoins ENVB, MagicMed or the Purchaser from consummating the amalgamation, and such applicable law has, if applicable, become final and non-appealable;
	●	by either MagicMed or the Purchaser if the effective time does not occur by December 31, 2021; provided that a party may not terminate if the failure of the effective time to occur is a result of a breach by such party of its representations or warranties or the failure of such party to perform its covenants or agreements; provided, however, in the event that the SEC has not concluded its review of the S-4 Registration Statement by the date which is sixty (60) days prior to December 31, 2021, then either ENVB or MagicMed shall be entitled to extend the end date for an additional sixty (60) days by providing written notice to the other party;
	●	by either MagicMed or the Purchaser if there shall be in effect a final nonappealable order of a governmental authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the Amalgamation Agreement; provided, that the right to terminate shall not be available to a party if such order was primarily due to the failure of such party to perform any of its obligations under the Amalgamation Agreement;
	●	by MagicMed if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of ENVB or the Purchaser under the Amalgamation Agreement occurs that would cause any condition precedent to the closing of the amalgamation not to be satisfied, and such breach or failure is incapable of being cured on or prior to December 31, 2021 or is not cured in the manner described above; provided that (a) any willful breach is deemed incurable and (b) MagicMed is not in breach so as to cause any condition to the closing of the amalgamation to not be satisfied;
	●	by MagicMed if it wishes to enter into a binding written agreement with respect to a superior proposal (other than a confidentiality and standstill agreement permitted by the Amalgamation Agreement), in compliance with the Amalgamation Agreement and provided that no termination shall be effective unless and until MagicMed shall have paid to the Purchaser the termination fee required to be paid pursuant to the Amalgamation Agreement;
	●	by MagicMed if (a) ENVB’s board or any committee of thereof fails to unanimously recommend or withdraws, amends, modifies or qualifies its approval of the amalgamation, or publicly proposes or states its intention to do so; (b) ENVB’s board or a committee thereof shall have approved or recommended any acquisition proposal or authorized ENVB to enter into binding written agreement with respect to a superior proposal (other than a confidentiality and standstill agreement permitted by the Amalgamation Agreement); or (c) ENVB breaches the non-solicitation provisions in any material respect, provided, however, no termination shall be effective unless and until MagicMed shall have paid to the Purchaser the termination fee required to be paid pursuant to the Amalgamation Agreement;
	●	by MagicMed if there is a material adverse effect with respect to ENVB that has not been disclosed by ENVB prior to the date of the Amalgamation Agreement;
	●	by ENVB if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of MagicMed under the Amalgamation Agreement occurs that would cause any condition precedent to the closing of the amalgamation not to be satisfied, and such breach or failure is incapable of being cured on or prior to December 31, 2021 or is not cured in the manner described above; provided that (a) any willful breach is deemed incurable and (b) ENVB is not in breach so as to cause any condition to the closing of the amalgamation to not be satisfied;
	●	by ENVB if it wishes to enter into a binding written agreement with respect to a superior proposal (other than a confidentiality and standstill agreement permitted by the Amalgamation Agreement), subject to compliance with the Amalgamation Agreement and provided that no termination shall be effective unless and until ENVB shall have paid to MagicMed the termination fee required to be paid pursuant to the Amalgamation Agreement;

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	●	by ENVB if (a) the MagicMed Board or any committee of thereof fails to unanimously recommend or withdraws, amends, modifies or qualifies the its approval of the amalgamation, or publicly proposes or states its intention to do so; (b) the MagicMed board or a committee thereof shall have approved or recommended any acquisition proposal or authorized MagicMed to enter into binding written agreement with respect to a superior proposal (other than a confidentiality and standstill agreement permitted by the Amalgamation Agreement); or (c) MagicMed breaches the non-solicitation provisions in any material respect; provided, however, no termination pursuant to shall be effective unless and until ENVB shall have paid to MagicMed the termination fee required to be paid pursuant to Amalgamation Agreement; or
	●	by ENVB if there is a material adverse effect with respect to MagicMed that has not been disclosed by MagicMed prior to the date of the Amalgamation Agreement.

 

Termination Fees (see page 127)

 

A termination fee of $4.5 million is payable by (i) MagicMed, if the Agreement is terminated by (a) ENVB 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 (as defined in the Amalgamation Agreement), or (3) a breach of the non-solicit covenant by MagicMed, or (b) MagicMed in order to accept a Superior Proposal; or (ii) ENVB, if the Amalgamation Agreement is terminated by (a) MagicMed as a result of (1) a change in recommendation by the ENVB board of directors, (2) an approval or recommendation by the ENVB board of directors of a different acquisition proposal or authorization by the ENVB board of directors of a Superior Proposal or (3) a breach of the non-solicit covenant by ENVB, or (b) ENVB in order to accept a Superior Proposal.

 

Comparison of the Rights of Holders of ENVB Common Stock and MagicMed Shares (see page 203)

 

As a result of the completion of the Amalgamation, holders of MagicMed Shares and, upon exercise, in-the-money options and warrants to acquire MagicMed Shares will become holders of ENVB common stock. ENVB is a Delaware corporation governed by the DGCL, while MagicMed is a corporation existing under the laws of the Province of British Columbia, governed by the Business Corporations Act (British Columbia). The rights of ENVB stockholders currently are, and from and after the Amalgamation will be, governed by the ENVB amended and restated certificate of incorporation, as amended, and the ENVB amended and restated bylaws, while the rights of MagicMed shareholders are currently governed by the MagicMed organizational documents. This proxy statement/prospectus includes summaries of the material differences between the rights of ENVB stockholders and MagicMed shareholders arising because of differences between the ENVB organizational documents and the MagicMed organizational documents.

 

Litigation Relating to the Amalgamation (see page 110)

 

Stockholder request letters and DGCL Section 220 demand letters, as well as securities class action lawsuits and derivative lawsuits, are often brought against public companies that have entered into amalgamation or merger-related agreements. As of August 3, 2021, ENVB has received two separate request letters from purported stockholders of ENVB. ENVB received a letter dated July 14, 2021 by a purported stockholder of ENVB relating to the Amalgamation (the “July 14 Letter”) noting that the purported stockholder believes the registration statement filed by ENVB with the SEC on June 21, 2021 omits material information with respect to the Amalgamation and requesting that ENVB and the ENVB board of directors provide certain corrective disclosures in an amendment or supplement to the registration statement. In addition, ENVB received a DGCL Section 220 books and records demand letter dated July 22, 2021 (the “July 22 Letter”) by a purported stockholder of ENVB seeking access to certain relevant books and records of ENVB in connection with the process underlying the Amalgamation and ENVB’s engagement of its financial advisors.

 

ENVB and MagicMed do not believe that these stockholder requests have merit or will result in any material monetary damages payable by either ENVB or MagicMed. There can be no assurance regarding the ultimate outcome of these stockholder requests. For additional information, see the section entitled “The Amalgamation—Litigation Relating to the Amalgamation.”

 

Accounting Treatment (see page 109)

 

The Amalgamation will be accounted for using the acquisition method of accounting in accordance with ASC 805 — Business Combinations, which we refer to as “ASC 805.” ENVB’s management has evaluated the guidance contained in ASC 805 with respect to the identification of the acquirer in the Amalgamation and concluded, based on a consideration of the pertinent facts and circumstances, that ENVB will be the acquirer for financial accounting purposes. Accordingly, ENVB’s cost to acquire MagicMed has been allocated to MagicMed’s acquired assets, liabilities and commitments based upon their estimated fair values. The allocation of the purchase price is estimated and is dependent upon estimates of certain valuations that are subject to change.

 

U.S. Federal Income Tax Considerations (see page 109)

 

The Amalgamation is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, for U.S. federal income tax purposes. It is further expected that no gain or loss should be recognized by ENVB or ENVB stockholders for U.S. federal income tax purposes as a result of the Amalgamation. The completion of the Amalgamation is not conditioned upon the receipt of an opinion of counsel to the effect that the Amalgamation qualifies for its intended tax treatment. In addition, neither ENVB nor MagicMed intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the Amalgamation. Accordingly, no assurance can be given that the IRS will not challenge the intended tax treatment or that a court would not sustain such a challenge. For further information, see “The Amalgamation—U.S. Federal Income Tax Consequences of the Amalgamation Generally” on page 109 of this proxy statement/prospectus.

 

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Opinion of ENVB’s Financial Advisor (see page 102 and Annex D)

 

Pursuant to an engagement letter, ENVB retained Gemini Valuation Services, LLC (“Gemini”) as its financial advisor in connection with the proposed Amalgamation.

 

At the meeting of the ENVB board of directors on May 21, 2021, Gemini rendered its oral opinion to the ENVB board of directors that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Gemini in preparing the opinion, the consideration for the ENVB stockholders in the Amalgamation was fair, from a financial point of view, to ENVB. Gemini confirmed its May 21, 2021 oral opinion by delivering its written opinion, dated May 21, 2021, to the ENVB board of directors that, as of such date, the consideration for the ENVB stockholders in the Amalgamation was fair, from a financial point of view, to ENVB.

 

The full text of the written opinion of Gemini, dated May 21, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Gemini in preparing the opinion, is attached as Annex D to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of Gemini set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. ENVB stockholders are urged to read the opinion in its entirety. Gemini’s opinion was addressed to the ENVB board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Amalgamation, was directed only to the consideration in the proposed Amalgamation and did not address any other aspect of the proposed Amalgamation. The opinion does not constitute a recommendation to any stockholder of ENVB as to how such stockholder should vote with respect to the ENVB Share Issuance Proposal or any other matter. For a description of the opinion that the ENVB board of directors received from Gemini, see the section entitled “The Amalgamation—Opinion of ENVB’s Financial Advisor.”

 

Risk Factors (see page 45)

 

Both ENVB and MagicMed are subject to various risks associated with their businesses and their industries. In addition, the amalgamation, including the possibility that the amalgamation may not be completed, poses a number of risks to each company and its respective securityholders, including the following risks:

 

Risks Related to the Amalgamation

 

	●	There is no assurance when or if the Amalgamation will be completed. Any delay in completing the Amalgamation may substantially reduce the benefits that ENVB expects to obtain from the Amalgamation.
	●	ENVB is expected to incur substantial expenses related to the Amalgamation and the integration of MagicMed.
	●	The announcement and pendency of the Amalgamation could have an adverse effect on ENVB’s and/or MagicMed’s business, financial condition, results of operations or business prospects.
	●	Some ENVB and MagicMed directors and executive officers have interests in the Amalgamation that are different from yours and that may influence them to support or approve the Amalgamation without regard to your interests.
	●	Because the Exchange Ratio is fixed and because the market price of ENVB common stock will fluctuate prior to the completion of the Amalgamation, MagicMed shareholders cannot be sure of the market value of ENVB common stock they will receive as Amalgamation consideration relative to the value of the MagicMed shares they will exchange in connection with the Amalgamation.
	●	The issuance of ENVB common stock in connection with the Amalgamation could decrease the market price of ENVB common stock.
	●	ENVB and MagicMed securityholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the Amalgamation as compared to their current ownership and voting interests in the respective companies.
	●	During the pendency of the Amalgamation, ENVB and MagicMed may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Amalgamation Agreement, which could adversely affect their respective business prospects.
	●	Certain provisions of the Amalgamation Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the transactions contemplated by the Amalgamation Agreement.
	●	Failure to complete the Amalgamation could negatively affect the value of ENVB common stock and ENVB’s future business and financial results.
	●	There has been no public market for MagicMed common shares and the lack of a public market makes it difficult to determine the fair market value of MagicMed.
	●	The Amalgamation may be completed even though material adverse changes may result from the announcement of the Amalgamation, industry-wide changes or other causes.
	●	The fairness opinion of ENVB’s financial advisor in connection with the Amalgamation does not reflect changes in circumstances between the date of the signing of the Amalgamation Agreement and the closing of the Amalgamation.
	●	Shareholders of the combined company may experience dilution of their ownership interests due to the future issuance of additional shares of stock of the combined company which could have an adverse effect on the price of the combined company’s stock.
	●	Potential litigation against ENVB and MagicMed could result in substantial costs and may delay or prevent the Amalgamation from being completed.

 

These risks and other risks, including risks related to the combined company, risks related to ENVB’s business, risks related to certain regulatory matters, risks related to ENVB’s intellectual property, risks related to the ownership of ENVB common stock, and risks related to MagicMed’s business are discussed in greater detail under the section titled “Risk Factors” beginning on page 45 of this proxy statement/prospectus. ENVB and MagicMed both encourage you to read and consider all of these risks carefully.

 

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