Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36242 | |
Entity Registrant Name | ADAMIS PHARMACEUTICALS CORP | |
Entity Central Index Key | 0000887247 | |
Entity Tax Identification Number | 82-0429727 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 11682 El Camino Real | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92130 | |
City Area Code | (858) | |
Local Phone Number | 997-2400 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | ADMP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 148,886,141 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 28,731,894 | $ 6,748,945 |
Restricted Cash | 30,011 | |
Accounts Receivable, net | 734,962 | 242,221 |
Receivable from Fagron | 6,362,509 | |
Inventories | 1,227,061 | |
Prepaid Expenses and Other Current Assets | 891,460 | 1,289,667 |
Current Assets of Discontinued Operations, Note 2 | 5,147,464 | 3,016,227 |
Total Current Assets | 41,898,300 | 12,524,121 |
LONG TERM ASSETS | ||
Fixed Assets, net | 2,348,799 | 2,497,878 |
Right-of-Use Assets | 731,550 | 969,999 |
Other Non-Current Assets | 97,549 | 52,174 |
Long-Term Assets of Discontinued Operations, Note 2 | 14,823,290 | |
Total Assets | 45,076,198 | 30,867,462 |
CURRENT LIABILITIES | ||
Accounts Payable | 2,453,470 | 1,780,104 |
Deferred Revenue, current portion | 100,000 | 100,000 |
Accrued Other Expenses | 3,111,460 | 1,640,512 |
Accrued Bonuses | 752,575 | 1,047,719 |
Contingent Loss Liability | 7,900,000 | |
Lease Liabilities, current portion | 343,735 | 325,766 |
Paycheck Protection Plan (PPP) Loans, current portion | 2,300,253 | |
Current Liabilities of Discontinued Operations, Note 2 | 2,434,915 | 4,831,372 |
Total Current Liabilities | 9,196,155 | 19,925,726 |
LONG TERM LIABILITIES | ||
Deferred Revenue | 775,000 | 850,000 |
Lease Liabilities, net of current portion | 432,018 | 692,433 |
PPP Loan, net of current portion | 891,447 | |
Warrant Liabilities, at fair value | 202,299 | 4,485,000 |
Long-Term Liabilities of Discontinued Operations, Note 2 | 525,316 | |
Total Liabilities | 10,605,472 | 27,369,922 |
STOCKHOLDERS’ EQUITY | ||
Common Stock - Par Value $ .0001 ; 200,000,000 Shares Authorized; 149,409,098 and 94,365,015 Issued, 148,886,141 and 93,842,058 Outstanding at September 30, 2021 (Unaudited) and December 31, 2020, Respectively. | 14,941 | 9,437 |
Additional Paid-in Capital | 303,772,662 | 233,404,968 |
Accumulated Deficit | (269,311,627) | (229,911,615) |
Treasury Stock, at cost - 522,957 and 522,957 Shares at September 30, 2021 (Unaudited) and December 31, 2020, Respectively. | (5,250) | (5,250) |
Total Stockholders’ Equity | 34,470,726 | 3,497,540 |
Total Liabilities and Stockholders’ Equity | $ 45,076,198 | $ 30,867,462 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 149,409,098 | 94,365,015 |
Common stock, outstanding | 148,886,141 | 93,842,058 |
Treasury Stock, Shares | 522,957 | 522,957 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
REVENUE, net | $ 759,962 | $ 868,077 | $ 3,368,115 | $ 2,096,796 |
COST OF GOODS SOLD | 1,235,603 | 1,414,086 | 4,877,083 | 4,987,271 |
Gross Loss | (475,641) | (546,009) | (1,508,968) | (2,890,475) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 4,794,485 | 3,308,686 | 13,247,027 | 9,620,501 |
RESEARCH AND DEVELOPMENT | 4,620,143 | 1,647,746 | 9,066,608 | 6,610,586 |
Loss on Derecognition of Inventory | 330,319 | 330,319 | ||
IMPAIRMENT EXPENSE - Write-off of Contract Asset | 1,750,000 | |||
Loss from Operations | (10,220,588) | (5,502,441) | (24,152,922) | (20,871,562) |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (1,865) | (1,722) | (6,649) | (3,213) |
Interest/Other Income | 1,932 | 2,180 | 5,283 | 34,836 |
Gain on Forgiveness of PPP Loans | 5,009,590 | 5,009,590 | ||
Change in Fair Value of Warrant Liabilities | 42,525 | (4,500,000) | (7,642,949) | (3,135,000) |
Total Other Income (Expense), net | 5,052,182 | (4,499,542) | (2,634,725) | (3,103,377) |
Net Loss from Continuing Operations before Income Taxes | (5,168,406) | (10,001,983) | (26,787,647) | (23,974,939) |
Income Taxes | ||||
Net Loss from Continuing Operations | (5,168,406) | (10,001,983) | (26,787,647) | (23,974,939) |
DISCONTINUED OPERATIONS | ||||
Net Loss from Discontinued Operations before Income Taxes | (7,192,642) | (1,359,215) | (10,266,365) | (7,557,341) |
Income Taxes - Discontinued Operations | ||||
Net Loss from Discontinued Operations | (7,192,642) | (1,359,215) | (10,266,365) | (7,557,341) |
Net Loss Applicable to Common Stock | $ (12,361,048) | $ (11,361,198) | $ (37,054,012) | $ (31,532,280) |
Basic and Diluted Loss Per Share: | ||||
Continuing Operations | $ (0.03) | $ (0.13) | $ (0.19) | $ (0.33) |
Discontinued Operations | (0.05) | (0.02) | (0.07) | (0.11) |
Basic and Diluted Net Loss Per Share | $ (0.08) | $ (0.15) | $ (0.26) | $ (0.44) |
Basic and Diluted Weighted Average Shares Outstanding | 148,886,141 | 76,044,862 | 142,483,194 | 72,137,685 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 6,235 | $ 213,520,785 | $ (5,250) | $ (180,520,526) | $ 33,001,244 | |
Beginning balance, shares at Dec. 31, 2019 | 62,352,465 | 522,957 | ||||
Common Stock Issued, Net of Issuance Costs | $ 3,016 | 16,890,695 | 16,893,711 | |||
Common Stock Issued, Net of Issuance Costs (in shares) | 30,148,386 | |||||
Issuance of February 2020 Warrants | (1,914,000) | (1,914,000) | ||||
Series B Convertible Preferred Stock Issue | $ 100 | 589,900 | 590,000 | |||
Series B Convertible Preferred Stock Issued (in shares) | 1,000,000 | |||||
Preferred Stock conversion to Common Stock | $ (100) | $ 100 | ||||
Preferred Stock Conversion to Common Stock (in shares) | (1,000,000) | 1,000,000 | ||||
Issuance of Restricted Stock Units (RSUs) | $ 67 | (67) | ||||
Issuance of Restricted Stock Units (RSUs) (in shares) | 679,734 | |||||
Share Based Compensation | 3,432,367 | 3,432,367 | ||||
Net Loss | (31,532,280) | (31,532,280) | ||||
Ending balance, value at Sep. 30, 2020 | $ 9,418 | 232,519,680 | $ (5,250) | (212,052,806) | 20,471,042 | |
Ending balance, shares at Sep. 30, 2020 | 94,180,585 | 522,957 | ||||
Beginning balance, value at Jun. 30, 2020 | $ 100 | $ 7,444 | 220,762,294 | $ (5,250) | (200,691,608) | 20,072,980 |
Beginning balance, shares at Jun. 30, 2020 | 1,000,000 | 74,443,722 | 522,957 | |||
Series B Convertible Preferred Stock Conversion to common Stock | $ (100) | $ 100 | ||||
Series B Convertible Preferred Stock Issued (in shares) | (1,000,000) | 1,000,000 | ||||
Common Stock Issued, Net of Issuance Costs | $ 1,855 | 10,658,757 | 10,660,612 | |||
Common Stock Issued, Net of Issuance Costs (in shares) | 18,548,386 | |||||
Issuance of Restricted Stock Units (RSUs) | $ 19 | (19) | ||||
Issuance of Restricted Stock Units (RSUs) (in shares) | 188,477 | |||||
Share Based Compensation | 1,098,648 | 1,098,648 | ||||
Net Loss | (11,361,198) | (11,361,198) | ||||
Ending balance, value at Sep. 30, 2020 | $ 9,418 | 232,519,680 | $ (5,250) | (212,052,806) | 20,471,042 | |
Ending balance, shares at Sep. 30, 2020 | 94,180,585 | 522,957 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 9,437 | 233,404,968 | $ (5,250) | (229,911,615) | 3,497,540 | |
Beginning balance, shares at Dec. 31, 2020 | 94,365,015 | 522,957 | ||||
Adjustment, conversion of 2019 Warrant Liability upon Adoption of ASU 2020-06 at Dec. 31, 2020 | 4,830,000 | (2,346,000) | 2,484,000 | |||
Balance, December 31, 2020, as adjusted at Dec. 31, 2020 | $ 9,437 | 238,234,968 | $ (5,250) | (232,257,615) | 5,981,540 | |
Beginning balance, shares, adjusted at Dec. 31, 2020 | 94,365,015 | 522,957 | ||||
Common Stock Issued, Net of Issuance Costs | $ 4,661 | 48,414,585 | 48,419,246 | |||
Common Stock Issued, Net of Issuance Costs (in shares) | 46,621,621 | |||||
Exercise of Warrants | $ 836 | 15,292,714 | 15,293,550 | |||
Exercise of Warrants (in shares) | 8,356,000 | |||||
Issuance of Restricted Stock Units (RSUs) | $ 7 | (7) | ||||
Issuance of Restricted Stock Units (RSUs) (in shares) | 66,462 | |||||
Share Based Compensation | 1,830,402 | 1,830,402 | ||||
Net Loss | (37,054,012) | (37,054,012) | ||||
Ending balance, value at Sep. 30, 2021 | $ 14,941 | 303,772,662 | $ (5,250) | (269,311,627) | 34,470,726 | |
Ending balance, shares at Sep. 30, 2021 | 149,409,098 | 522,957 | ||||
Beginning balance, value at Jun. 30, 2021 | $ 14,941 | 303,620,101 | $ (5,250) | (256,950,579) | 46,679,213 | |
Beginning balance, shares at Jun. 30, 2021 | 149,409,098 | 522,957 | ||||
Share Based Compensation | 152,561 | 152,561 | ||||
Net Loss | (12,361,048) | (12,361,048) | ||||
Ending balance, value at Sep. 30, 2021 | $ 14,941 | $ 303,772,662 | $ (5,250) | $ (269,311,627) | $ 34,470,726 | |
Ending balance, shares at Sep. 30, 2021 | 149,409,098 | 522,957 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Common Stock Issued, issuance costs | $ 839,387 | $ 3,330,752 | $ 1,334,289 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (37,054,012) | $ (31,532,280) |
Less: Loss from Discontinued Operations | 10,266,365 | 7,557,341 |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Stock Based Compensation | 1,830,402 | 3,432,367 |
Acquired IPR&D | 840,000 | |
Provision for Excess and Obsolete Inventory | 587,824 | (97,307) |
Change in Fair Value of Warrant Liabilities | 7,642,949 | 3,135,000 |
(Cash Payments in Excess of Lease Expense) Lease Expense in Excess of Cash | (3,997) | 3,852 |
Depreciation and Amortization Expense | 1,071,830 | 1,753,745 |
Impairment of Contract Assets | 1,750,000 | |
Gain in Forgiveness of PPP Loans | (5,009,589) | |
Change in Assets and Liabilities: | ||
Accounts Receivable - Trade | (492,741) | 594,892 |
Receivable from Fagron | (6,492,321) | |
Inventories | 639,237 | 120,316 |
Prepaid Expenses and Other Current Assets | 352,833 | (848,226) |
Accounts Payable | 730,759 | (692,773) |
Contingent Loss Liability | (7,900,000) | |
Deferred Revenue | (75,000) | 75,000 |
Accrued Other Expenses and Bonuses | 1,203,498 | 1,940,873 |
Net Cash Used in Operating Activities of Continuing Operations | (32,701,963) | (11,967,200) |
Net Cash Provided by (Used in) Operating Activities of Discontinued Operations | 1,590,310 | (3,522,542) |
Net Cash Used in Operating Activities | (31,111,653) | (15,489,742) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Equipment | (996,268) | (481,006) |
Proceeds from Sale of Non-financial Asset | 129,811 | |
Purchase of IPR&D | (250,000) | |
Net Cash Used in Investing Activities of Continuing Operations | (866,457) | (731,006) |
Net Cash Used in Investing Activities of Discontinued Operations | (15,999) | (233,691) |
Net Cash Used in Investing Activities | (882,456) | (964,697) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Common Stock | 51,749,998 | 18,228,000 |
Costs of Issuance of Common Stock | (3,330,752) | (1,334,289) |
Proceeds from Exercise of Warrants | 5,851,900 | |
Proceeds of PPP Loan | 1,765,495 | 3,191,700 |
Net Cash Provided by Financing Activities of Continuing Operations | 56,036,641 | 20,085,411 |
Net Cash Used In Financing Activities of Discontinued Operations | (2,057,948) | (64,425) |
Net Cash Provided by Financing Activities | 53,978,693 | 20,020,986 |
Increase in Cash and Cash Equivalents and Restricted Cash | 21,984,584 | 3,566,547 |
Cash and Cash Equivalents: and Restricted Cash | ||
Beginning | 6,748,945 | 8,418,382 |
Change in Cash and Cash Equivalents of Discontinued Operations | 28,376 | 57,688 |
Ending | 28,761,905 | 12,042,617 |
RECONCILIATION OF CASH & CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash & Cash Equivalents | 28,731,894 | 12,042,617 |
Restricted Cash | 30,011 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash Paid for Income Taxes | 4,125 | 11,300 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING, FINANCING AND INVESTING ACTIVITIES | ||
Decrease in Accrued Capital Expenditures | (73,517) | (90,587) |
Forgiveness of PPP Loans | 5,009,590 | |
Series B Preferred Stock Issuance for License Agreement | $ 590,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments and the elimination of intercompany accounts) considered necessary for a fair statement of all periods presented. The results of operations of Adamis Pharmaceuticals Corporation (“the Company”) for any interim periods are not necessarily indicative of the results of operations for any other interim periods or for a full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). On January 30, 2020, the World Health Organization (“WHO”) declared that the novel coronavirus (COVID-19) outbreak was a global health emergency, which prompted national governments to begin putting actions in place to slow the spread of COVID-19. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic. The outbreak of COVID-19 has resulted in travel restrictions, quarantines, “stay-at-home” and “shelter-in-place” orders and extended shutdown of certain businesses around the world. The governmental actions and the widespread disruptions arising from the pandemic have adversely affected certain aspects of our business. The extent and duration of the pandemic is unknown, and the future effects on our business are uncertain and difficult to predict, including in light of recent new variants of the virus. The Company is continuing to monitor the events and circumstances surrounding the COVID-19 pandemic, which may require adjustments to the Company’s estimates and assumptions in the future. For fiscal years 2021 and 2020, the assets, liabilities, income, and cash flows of the Company’s subsidiary, US Compounding, Inc. (“USC”), have been separated from the comparative period amounts to conform to the current period presentation as discontinued operations as the result of the Company’s decision to wind down and cease operations of USC and liquidate its remaining assets. Moreover, for fiscal years 2021 and 2020, all gains and losses on disposition, impairment charges and disposal costs, along with the sales, costs and expenses and income taxes attributable to discontinued locations, have been aggregated in a single caption entitled “net loss from discontinued operations” in our consolidated statements of operations for all periods presented. See Note 2. Liquidity and Capital Resources The Company’s cash and cash equivalents was $ 28,731,894 The Company prepared the condensed consolidated financial statements assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. In preparing these condensed consolidated financial statements, consideration was given to the Company’s future business as described below, which may preclude the Company from realizing the value of certain assets. The Company has significant operating cash flow deficiencies. Additionally, the Company may need additional funding in the future to help support commercialization of its products and conduct the clinical and regulatory activities relating to the Company’s product candidates, satisfy existing obligations and liabilities, and otherwise support the Company’s intended business activities and working capital needs. The preceding conditions raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements for the nine months ended September 30, 2021, were prepared under the assumption that we would continue our operations as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Our unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Management’s plans include attempting to secure additional required funding through equity or debt financings, sales or out-licensing of intellectual property or other assets, products, product candidates or technologies, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions, and through revenues from existing agreements. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. In addition, the COVID-19 pandemic has had an adverse impact on the Company. A severe or prolonged economic downturn or political disruption could result in a variety of risks to our business, including our ability to raise capital when needed on acceptable terms, if at all. On May 11, 2021, the Company and USC each received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York (“USAO”). The USAO issued the subpoenas in connection with a criminal investigation and requested a broad range of documents and materials relating to, among other matters, certain veterinary products sold by USC, certain practices, agreements, and arrangements relating to products sold by USC, including veterinary products, and certain regulatory and other matters relating to the company and USC. The Audit Committee of the company’s Board of Directors (the “Board”) engaged outside counsel to conduct an independent internal investigation to review the matters brought forth in the subpoenas and certain other matters. See Note 9 for additional information. In addition to the subpoenas from the USAO, the Company has also received requests from the SEC for the voluntary production of documents and information relating to the subject matter of the USAO’s subpoenas and certain other matters. The Company has produced documents and will continue to produce and provide documents in response to the subpoenas and requests. The Company intends to cooperate with the USAO and the SEC. At this time, the Company is unable to predict the duration, scope, or outcome of the investigations by the USAO, SEC, or other agencies, or determine what, if any, proceedings the USAO, SEC, or other federal or state authorities may initiate, what, if any, remedies or remedial measures the USAO, SEC, or other federal or state authorities may seek, or what, if any, impact the foregoing matters may have on the company’s business, previously reported financial results, financial results included in this Report, or future financial results. The foregoing matters may divert management’s attention, cause the Company to suffer reputational harm, require the Company to devote significant financial resources, subject the company and its officers and directors to civil or criminal proceedings, and depending on the resolution of the matters or any proceedings, result in fines, penalties or equitable remedies, and affect the Company’s business, previously reported financial results, financial results included in this Report, or future financial results. The occurrence of any of these events, or any determination that our activities were not in compliance with existing laws or regulations, could have a material adverse effect on the Company’s business, liquidity, financial condition, and results of operations. Basic and Diluted Loss per Share The Company computes basic loss per share by dividing the loss attributable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The diluted loss per share calculation is based on the treasury stock method and gives effect to dilutive options, warrants and other potential dilutive common stock. The effect of common stock equivalents was anti-dilutive and was excluded from the calculation of weighted average shares outstanding. Potential dilutive securities, which are not included in diluted weighted average shares outstanding for the nine months ended September 30, 2021 and September 30, 2020, consist of 14,202,824 24,634,670 5,844,239 6,590,387 1,747,124 2,345,630 Discontinued Operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations The Company disposed of a component of its business in August 2021 and met the definition of a discontinued operation as of September 30, 2021. Accordingly, the operating results of the business disposed are reported as loss from discontinued operations in the accompanying unaudited condensed statements of operations for the three month and nine month periods ended September 30, 2021 and 2020. For additional information, see Note 2 - Discontinued Operations. Recent Accounting Pronouncement In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 9 Months Ended |
Sep. 30, 2021 | |
DISCONTINUED OPERATIONS | |
Discontinued Operations and Assets Held for Sale | Note 2: Discontinued Operations and Assets Held for Sale In August 2021, we announced our agreement with Fagron Compounding Services, LLC (“Fagron”) to sell to Fagron certain assets of our subsidiary, US Compounding, Inc. ("USC"), related to its human compounding pharmaceutical business including certain customer information and information on products sold to such customers by USC, including related formulations, know-how, and expertise regarding the compounding of pharmaceutical preparations, clinical support knowledge and other data and certain other information relating to the customers and products. The agreement includes fixed consideration of approximately $ 107,000 6,385,000 4,637,000 1,856,000 700,000 In July 2021, the Company decided to approve a restructuring process to wind down and cease the remaining operations at USC, with the remaining USC assets to be sold, liquidated or otherwise disposed of. As of September 30, 2021, the Company has begun shutting down the operations of USC and is also engaged in the process of selling or attempting to sell or otherwise dispose of USC’s remaining assets. The Company’s current goal is to attempt to substantially complete winding down the operations of USC by the end of December 2021, except for such activities as may be necessary to wind up and resolve USC’s affairs, and the employment of substantially all of USC’s employees is expected to be terminated by that time. In August 2021, the Company and its wholly-owned USC subsidiary entered into an Asset Purchase Agreement effective as of August 31, 2021 with a third party buyer, providing for the sale and transfer by USC of certain assets related to USC’s veterinary compounded pharmaceuticals business. The sale covers the transfer of all the veterinary business customers’ information belonging to USC or in USC’s control and possession and USC’s know how, information and expertise regarding the veterinary business. Pursuant to the agreement, the buyer agreed to pay the Company, for any sales of products in USC’s veterinary products list or equivalent products made to the customers included in the agreement during the five-year period after the date of the agreement, an amount equal to twenty percent ( 20 Discontinued operations comprise those activities that were disposed of during the period, abandoned or which were classified as held for sale at the end of the period and represent a separate major line of business or geographical area that was previously distinguished as Compounded Pharmaceuticals segment for operational and financial reporting purposes in prior reported financial statements. Assets Held for Sale The Company considers assets to be held for sale when management approves and commits to a plan to actively market the assets for sale at a reasonable price in relation to its fair value, the assets are available for immediate sale in their present condition, an active program to locate a buyer and other actions required to complete the sale have been initiated, the sale of the assets is expected to be completed within one year and it is unlikely that significant changes will be made to the plan. Upon designation as held for sale, the Company ceases to record depreciation and amortization expenses and measures the assets at the lower of their carrying value or estimated fair value less costs to sell. Assets held for sale are included as other current assets in the Company’s consolidated balance sheets and the gain or loss from sale of assets held for sale is included in the Company’s general and administrative expenses. The major assets and liabilities associated with discontinued operations included in our condensed consolidated balance sheets are as follows: September 30, December 31 Carrying amounts of major classes of assets included as part of discontinued operations Cash and Cash Equivalents $ 78,034 $ 106,410 Accounts Receivable, net 202,697 850,636 Inventories 121,900 1,888,865 Fixed Assets, Held for Sale 6,888,118 7,088,715 Intangible Assets, net — 6,280,010 Goodwill — 868,412 Right-of-Use Assets — 573,998 Other Assets 34,559 182,471 Less: Loss recognized on classification as held for sale (2,177,844 ) — Total assets of the disposal group classified as discontinued operations in the statement of financial position $ 5,147,464 $ 17,839,517 Carrying amounts of major classes of liabilities included as part of discontinued operations Accounts Payable 798,017 1,711,613 Accrued Other Expenses 659,162 883,900 Lease Liabilities 455,206 581,362 Contingent Loss Liability 410,000 — Deferred Revenue — 70 Bank Loans - Building — 2,067,213 Deferred Tax Liability, net 112,530 112,530 Total liabilities of the disposal group classified as discontinued operations in the statement of financial position $ 2,434,915 $ 5,356,688 The revenues and expenses associated with discontinued operations included in our condensed consolidated statements of operations were as follows: Three Months Ended 2021 2020 Major line items constituting pretax loss of discontinued operations REVENUE, net $ 705,143 $ 3,432,436 COST OF GOODS SOLD (1,882,558 ) (2,232,256 ) Gross Loss (1,177,415 ) 1,200,180 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2,457,162 ) (2,485,272 ) RESEARCH AND DEVELOPMENT (42,076 ) (51,664 ) Impairment Expense – Intangible Assets (3,835,158 ) — Impairment Expense – Goodwill (868,412 ) — Impairment Expense – Inventory (837,414 ) — Impairment Expense – Right of Use Asset (448,141 ) — Loss from Held for Sale Classification (2,177,844 ) — (11,843,622 ) (1,336,756 ) OTHER INCOME (EXPENSE) Interest Expense — (44,321 ) Interest Income 8,619 21,862 Gain on Sale of Assets to Fagron 4,636,702 — Other Income 5,659 — Net Loss from discontinued operations before income taxes $ (7,192,642 ) $ (1,359,215 ) Nine Months Ended 2021 2020 Major line items constituting pretax loss of discontinued operations REVENUE, net $ 6,216,826 $ 10,793,269 COST OF GOODS SOLD (5,753,658 ) (7,029,950 ) 463,168 3,763,319 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (7,055,739 ) (7,880,920 ) RESEARCH AND DEVELOPMENT (89,710 ) (211,380 ) Impairment Expense – Intangible (3,835,158 ) — Impairment Expense – Goodwill (868,412 ) (3,143,200 ) Impairment Expense – Inventory (837,414 ) — Impairment Expense – Right of Use Asset (448,141 ) — Impairment Expense – Fixed Assets (9,346 ) — Loss from Held for Sale Classification (2,177,844 ) — (14,858,596 ) (7,472,181 ) OTHER INCOME (EXPENSE) Interest Expense (70,903 ) (114,042 ) Interest Income 34 28,882 Gain on Sale of Assets to Fagron 4,636,702 — Other Income 26,398 — Net Loss from discontinued operations before income taxes $ (10,266,365 ) $ (7,557,341 ) Discontinued Operations - Impairments Impairment of Intangibles - 1,856,000 3,835,000 0 6,280,000 Impairment of Goodwill 868,000 0 868,412 Loss from Held for Sale Classification 2,178,000 Impairment of Right of Use (ROU) Assets 0 448,000 0 573,998 Impairment of Inventory 837,000 598,000 239,000 121,900 1,888,865 Inventories September 30, 2021 December 31, 2020 Finished Goods $ — $ 1,166,198 Devices 121,900 722,667 Inventories $ 121,900 $ 1,888,865 Reserve for obsolescence as of September 30, 2021 and December 31, 2020 was approximately $ 0 191,000 Restructuring Costs Due to the facts and circumstances detailed above, the Company has identified three major types of restructuring activities related to the disposal of USC in addition to the $ 8.2 827,000 410,000 294,000 93,000 127,000 410,000 The following summarizes the restructuring activities and their related accruals as of September 30, 2021: Employee Contract Chemical Termination Costs Termination Cost Destruction Costs Total Balance at December 31, 2020 $ - $ - $ - $ - Restructuring charges 826,523 410,000 293,554 1,530,077 Payments (610,523) - (47,056) (657,579) Balance at September 30, 2021 $ 216,000 $ 410,000 $ 246,498 $ 872,498 The liabilities of approximately $ 216,000 227,000 410,000 19,000 . Discontinued Operations - Debt Building Loan In connection with the sale of certain USC assets to Fagron, the Company paid to the lending bank the outstanding principal balance, accrued unpaid interest and other obligations under the Company’s loan agreement, promissory note and related loan documents relating to the outstanding building loan relating to the building and property on which USC’s offices are located. As of September 30, 2021 and December 31, 2020, the outstanding principal balance owed on the applicable note was approximately $ 0 2,067,000 |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 3: Revenues Revenue Recognition Revenue is recognized pursuant to ASC Topic 606, “ Revenue from Contracts with Customers 1. Identify the contract with the customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) each performance obligation is satisfied Adamis is a specialty biopharmaceutical company focused on developing and commercializing products in various therapeutic areas, including allergy, opioid overdose, respiratory and inflammatory disease. The Company’s USC subsidiary provides compounded sterile prescription medications and certain nonsterile preparations and compounds, for human and veterinary use by patients, physician clinics, hospitals, surgery centers, vet clinics and other clients throughout most of the United States. USC’s product offerings broadly include, among others, corticosteroids, hormone replacement therapies, hospital outsourcing products, and injectables. Adamis and USC have contracts with customers when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. Compounded Pharmaceuticals Facility Revenue Recognition With respect to sales of prescription compounded medications by the Company’s USC subsidiary, revenue arrangements consist of a single performance obligation which is satisfied at the point in time when goods are delivered to the customer. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer which is the price reflected in the individual customer’s order. Additionally, the transaction price for medication sales is adjusted for estimated product returns that the Company expects to occur under its return policy. The estimate is based upon historical return rates, which has been immaterial. The standard payment terms are 2%/10 and Net 30 Drug Development and Commercialization Revenue Recognition Sandoz See Note 5 to our consolidated financial statements in the 2020 Form 10-K for information relating to our exclusive distribution and commercialization agreement dated as of July 1, 2018 with Sandoz Inc. (the “Sandoz Agreement”), which was terminated pursuant to a termination agreement entered into on May 11, 2020. USWM The Company has determined that there are two performance obligations in its exclusive distribution and commercialization agreement (the “USWM Agreement”) with USWM, LLC (“USWM” or “US WorldMeds”): (i) the manufacture and supply of SYMJEPI™ and ZIMHI™ products to USWM; and (ii) the exclusive distribution and commercialization in the United States. Revenues from the manufacture and supply of SYMJEPI™ and ZIMHI™ are recognized at a point in time upon delivery to USWM. The right of exclusive distribution and commercialization is considered a symbolic license and will be recognized over time over the life of the contract. The Company believes that due to ongoing efforts to comply with regulations that a performance obligation continues to exist over the life of the contract. Under the terms of the USWM Agreement, the Company is entitled to receive various amounts and milestone payments, including: (1) certain non-refundable up-front fees for executing the agreement and regulatory milestone payments, both of which will be recognized over the expected customer life, estimated to be equal to the initial 10 Practical Expedients As part of the adoption of the ASC Topic 606, the Company elected to use the following practical expedients: (i) incremental costs of obtaining a contract in the form of sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded within Selling, General and Administrative expenses; (ii) taxes collected from customers and remitted to government authorities and that are related to the sales of the Company’s products, are excluded from revenues; and (iii) shipping and handling activities are accounted for as fulfillment costs and recorded in cost of sales. Revenue The Company outsources the manufacturing of the SYMJEPI product to third party manufacturers who bear the responsibility of maintaining a suitable environment as governed by specific regulatory and quality requirements. The Company’s revenues relating to its FDA approved product SYMJEPI are dependent on an exclusive distribution agreement with USWM, which replaced the previous Sandoz Agreement in May 2020. Deferred Revenue Deferred Revenue are contract liabilities that the Company records when cash payments are received or due in advance of the Company’s satisfaction of performance obligations. The Company’s performance obligation is met when control of the promised goods is transferred to the Company’s customers. For the three months ended September 30, 2021 and 2020, $ 25,000 462,500 75,000 900,000 875,000 950,000 Cost to Obtain a Contract The Company capitalizes costs related to contracts that would have not been incurred if the contract was not obtained and the Company expects to recover such costs. The deferred costs, reported in the prepaid expenses and other current assets and other non-current assets on the Company’s Condensed Consolidated Balance Sheets, will be amortized over the economic benefit period of the contract. In 2018, the Company capitalized the $ 2 1,750,000 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4: Inventories Inventories at September 30, 2021 and December 31, 2020 consisted of the following September 30, December 31, Finished Goods $ — $ 892,897 Work-in-Process — 334,164 Inventories $ — $ 1,227,061 Reserve for obsolescence as of September 30, 2021 and December 31, 2020 was approximately $ 0 $255,000 Inventory Derecognition In the third quarter of 2021, approximately $ 776,000 445,000 330,000 |
Fixed Assets, net
Fixed Assets, net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets, net | Note 5: Fixed Assets, net Fixed Assets, net at September 30, 2021 and December 31, 2020 are summarized in the table belo Description Useful Life (Years) September 30, 2021 December 31, 2020 Machinery and Equipment 3 7 $ 4,519,383 $ 4,072,261 Less: Accumulated Depreciation (2,817,652 ) (1,745,823 ) Construction In Progress - Equipment 647,068 171,440 Fixed Assets, net $ 2,348,799 $ 2,497,878 Depreciation expense for the three months ended September 30, 2021 and 2020 was approximately $ 375,000 342,000 1,072,000 978,000 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Leases | Note 6: Leases The Company has one operating lease for an office space. As of September 30, 2021, the lease has a remaining term of approximately 26 The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 Right-of Use Assets September 30, 2021 December 31, 2020 Operating Lease $ 731,550 $ 969,999 Lease Liabilities, Current September 30, 2021 December 31, 2020 Operating Lease $ 343,735 $ 325,766 Lease Liabilities, Non-Current Operating Lease 432,018 692,433 Total Lease Liabilities $ 775,753 $ 1,018,199 The amortizable lives of operating and financing leased assets are limited by the expected lease term. The Company’s lease does not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating and financing lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for leases that commenced prior to that date. The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of September 30, 2021 and December 31, 2020 were September 30, 2021 Operating Weighted Average Remaining Lease Term 2.17 Weighted Average Discount Rate 3.95% December 31, 2020 Operating Weighted Average Remaining Lease Term 2.92 Weighted Average Discount Rate 3.95% The table below reconciles the undiscounted future minimum lease payments Year Ending December 31, Operating Remainder of 2021 $ 90,710 2022 370,950 2023 349,365 Undiscounted Future Minimum Lease Payments 811,025 Less: Difference between undiscounted lease payments and discounted lease liabilities 35,272 Total Lease Liabilities $ 775,753 Short-Term Lease Liabilities $ 343,735 Long-Term Lease Liabilities $ 432,018 Operating lease expense for the three months ended September 30, 2021 and 2020 was approximately $ 88,000 88,000 265,000 265,000 Cash paid for amounts included in the measurement of operating lease liabilities were approximately $ 90,000 87,000 269,000 262,000 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Note 7: Debt First Draw Paycheck Protection Program Loan On April 13, 2020, the Company received $ 3,191,700 3,191,700 Under the terms of the Note and the PPP Loan, interest accrues on the outstanding principal at the rate of 1.0 The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. Under the PPP, the Company may apply for and be granted forgiveness for all or part of the PPP Loan. The amount of loan proceeds eligible for forgiveness is based on a formula that takes into account a number of factors, including the amount of loan proceeds used by the Company during a specified period after the loan origination for certain purposes including payroll costs, interest on certain mortgage obligations, rent payments on certain leases, and certain qualified utility payments, provided that at least 60 In December 2020, the Company submitted an application for the forgiveness of our PPP Loan. In August 2021, the Company received notification through the Bank that as of August 5, 2021, the PPP Loan, including principal and interest thereon, has been fully forgiven by the SBA and that the remaining PPP Loan balance is zero Second Draw PPP Loan On March 15, 2021, the Company entered into a Note (the “PPP2 Note”) in favor of the Bank, in the principal amount of $ 1,765,495 1.0 Upon the occurrence of an event of default, the Bank has customary remedies and may, among other things, require immediate payment of all amounts owed under the Note, collect all amounts owing from the Company, and file suit and obtain judgment against the Company. In September 2021, the Company submitted an application for the forgiveness of our Second Draw PPP Loan. In October 2021, the Company received notification through the Bank that as of September 28, 2021, the Second Draw PPP Loan, including principal and interest thereon, has been fully forgiven by the SBA and that the remaining PPP Loan balance is zero Even though the PPP Loan and the Second Draw PPP Loan have been forgiven, our PPP loans and applications for forgiveness of loan amounts remain subject to review and audit by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form, including without limitation the required economic necessity certification by the Company that was part of the PPP loan application process. Accordingly, the Company is subject to audit or review by federal or state regulatory authorities as a result of applying for and obtaining the PPP Loan and Second Draw PPP Loan or obtaining forgiveness of those loans. If we were to be audited or reviewed and receive an adverse determination or finding in such audit or review, we could be required to return or repay the full amount of the applicable loan and could be subject to fines or penalties, which could reduce our liquidity and adversely affect our business, financial condition and results of operations. If it is determined that the Company was ineligible to receive the PPP Loan and/or the Second Draw Loan, the Company may be required to repay the PPL Loan and Second Draw Loan in its entirety and/or be subject to additional penalties. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 8: Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to the short-term nature of these items. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the debt approximates fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3: Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. T The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy Fair Value Measurements at September 30, 2021 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant liability $ 202,299 — $ — $ 202,299 Total common stock warrant liabilities $ 202,299 $ — $ — $ 202,299 The fair value measurement of the warrants issued by the Company in February 2020 (the “2020 Warrants”) are based on significant inputs that are unobservable and thus represents a Level 3 measurement. The Company’s estimated fair value of the Warrant liability is calculated using the Black Scholes Option Pricing Model. Key assumptions at September 30, 2021 include the expected volatility of the Company’s stock of approximately 70 0.97 0.0 0.636 Fair Value Measurements at December 31, 2020 Total Level 1 Level 2 Level 3 Liabilities 2019 Warrant Liability $ 2,484,000 $ — $ — $ 2,484,000 2020 Warrant liability 2,001,000 — — 2,001,000 Total common stock warrant liabilities $ 4,485,000 $ — $ — $ 4,485,000 The fair value measurement of the warrants issued by the Company in August 2019 (the “2019 Warrants”) and the 2020 Warrants are based on significant inputs that are unobservable and thus represents a Level 3 measurement. The Company’s estimated fair value of the Warrant liability is calculated using the Black Scholes Option Pricing Model. Key assumptions include the expected volatility of the Company’s stock of approximately 80 70 0.49 0.0 0.26 0.36 The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments, which are treated as liabilities, as follows 2019 Warrant 2020 Warrant Number of Liability Number of Liability (in thousands) (in thousands) Balance at December 31, 2020 13,800,000 $ 2,484,000 8,700,000 $ 2,001,000 Adoption of ASC 2020-06 (13,800,000 ) (2,484,000 ) — — Change in Fair Value of Warrants at Date of Exercise — — — 7,521,150 Exercise of Warrants — — (8,350,000 ) (9,441,650 ) Change in Fair Value, March 31, 2021 — — — 120,750 Change in Fair Value, June 30, 2021 — — — 43,574 Change in Fair Value, September 30, 2021 — — — (42,525 ) Balance at September 30, 2021 — $ — 350,000 $ 202,299 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9: Commitments and Contingencies The Company has a production threshold commitment to a manufacturer of our SYMJEPI products where the Company would be required to pay for maintenance fees if it does not meet certain periodic purchase order minimums. Any such maintenance fees would be prorated as a percentage of the required minimum production threshold. Maintenance fees for the three months ended September 30, 2021 and 2020 were approximately $ 0 420,000 0 1,260,000 Contract Termination Cost In the third quarter of 2021, USC recorded a contingent loss liability of an estimated amount of approximately $ 410,000 Legal Proceedings The Company may from time to time become party to actions, claims, suits, investigations or proceedings arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, labor and employment claims, claims relating to our compounded pharmacy business, and other matters. We may also become party to litigation in federal and state courts relating to opioid drugs. Any litigation could divert management time and attention from Adamis, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations. Actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty. Except as described below, we are not currently involved in any legal proceedings that we believe are, individually or in the aggregate, material to our business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time. Investigation On May 11, 2021, the company and USC each received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York (“USAO”). The USAO issued the subpoenas in connection with a criminal investigation and requested a broad range of documents and materials relating to, among other matters, certain veterinary products sold by USC, certain practices, agreements, and arrangements relating to products sold by USC, including veterinary products, and certain regulatory and other matters relating to the company and USC. On May 11, 2021, the Audit Committee of the Board engaged outside counsel to conduct an independent internal investigation to review the matters brought forth in the subpoenas and certain other matters. The investigation involved, among other matters, interviews with employees and collection and review of a large number of documents. The company has taken a number of actions in response to the internal investigation, including personnel actions relating to certain USC veterinary sales employees. In addition, following the commencement of the investigation, as disclosed elsewhere in this Report the company has sold assets relating to its compounding pharmacy business, ceased selling human and veterinary compounded pharmaceutical products, is engaged in a process of winding down USC’s business, and the employment of substantially all USC employees has ended or will end in connection with the winding down of that business. As a result, the company will no longer be engaged in the sale of human or veterinary compounded pharmaceutical products. The company is also considering a number of additional actions in response to the internal investigation. As of the date of this Report, we believe that the investigation initially commenced by the Audit Committee is substantially complete. However, additional issues or facts could arise or be determined, which may expand the scope, duration, or outcome of the Audit Committee’s investigation. In addition to the subpoenas from the USAO, the company has also received requests from the U.S. Securities and Exchange Commission (“SEC”) for the voluntary production of documents and information relating to the subject matter of the USAO’s subpoenas and certain other matters. The company has produced documents and will continue to produce and provide documents in response to the subpoenas and requests. The company intends to cooperate with the USAO and the SEC. At this time, the company is unable to predict the duration, scope, or outcome of the investigations by the USAO, SEC, or other agencies, or determine what, if any, proceedings the USAO, SEC, or other federal or state authorities may initiate, what, if any, remedies or remedial measures the USAO, SEC, or other federal or state authorities may seek, or what, if any, impact the foregoing matters may have on the company’s business, previously reported financial results, financial results included in this Report, or future financial results. We could receive additional requests from the USAO, SEC, or other authorities, which may require further investigation. There can be no assurance that any discussions with the SEC or USAO to resolve these matters will be successful. The foregoing matters may divert management’s attention, cause the company to suffer reputational harm, require the company to devote significant financial resources, subject the company and its officers and directors to civil or criminal proceedings, and depending on the resolution of the matters or any proceedings, result in fines, penalties or equitable remedies, and affect the company’s business, previously reported financial results, financial results included in this Report, or future financial results. The occurrence of any of these events, or any determination that our activities were not in compliance with existing laws or regulations, could have a material adverse effect on the company’s business, financial condition, and results of operations. Regulatory In October 2021, following the sale in July 2021 of certain assets of the Company’s USC subsidiary relating to USC’s human compounding pharmaceutical business and the Company’s approval of a restructuring process of winding down the remaining operations and business of USC and selling or disposing of the remaining assets of USC, the Company entered into a Consent Order with the Arkansas State Board of Pharmacy to resolve an ongoing administrative proceeding before the pharmacy board, pursuant to which USC agreed to surrender its Arkansas retail pharmacy permit and wholesaler/outsourcer permit effective October 31, 2021, to pay a civil penalty of $ 75,000 75,000 150,000 Jerald Hammann On June 8, 2021, Jerald Hammann filed a complaint against the Company and each of its directors in the Court of Chancery of the State of Delaware, captioned Jerald Hammann v. Adamis Pharmaceuticals Corporation et al. On June 10, 2021, the plaintiff filed a motion for a temporary restraining order and for expedited proceedings, seeking an order enjoining the Company from printing or disseminating its proxy statement relating to the 2021 annual meeting or from convening the 2021 annual meeting on July 16, 2021. Following a hearing, on June 17, 2021, the Court determined that: (i) it did not have jurisdiction to consider the plaintiff’s claims relating to alleged violations of the Exchange Act; (ii) plaintiff’s claims regarding the books and records request and alleged violations of section 220 of the DGCL should be pursued in a separate proceeding, and the Court denied the plaintiff’s motion to expedite the books and records claims; (iii) certain of the plaintiff’s claims alleging breach of the fiduciary duty of disclosure against the individual defendants, including claims based on alleged misrepresentations and omissions in the Company’s proxy statement, were not colorable; and (iv) plaintiff’s claim alleging that the individual defendants violated their fiduciary duty by taking action purportedly intended to prevent the plaintiff from pursuing a proxy contest survived a low threshold of colorability, but the Court denied the plaintiff’s motion for a temporary restraining order. The Court granted in part the motion to expedite the proceedings. The case is proceeding and the parties are currently engaged in discovery. The Company believes the claims in plaintiff’s Complaint are without merit, and intends to vigorously dispute them. The Company records accruals for loss contingencies associated with legal matters when the Company determines it is probable that a loss has been or will be incurred and the amount of the loss can be reasonably estimated. Where a material loss contingency is reasonably possible and the reasonably possible loss or range of possible loss can be reasonably estimated, U.S. GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. The company has not accrued any amount in respect of the matters described under the headings “Investigation” or “Jerald Hammann,” since even if it is probable that such matters may result in a material loss contingency, we cannot estimate the probable loss or the range of probable losses that we may incur. We are unable to make such an estimate because (i) with respect to the matters described under the heading “Investigation,” we are unable to predict whether any proceedings will be initiated by the USAO, SEC or other authorities arising from such matters, what, if any, relief, remedies or remedial measures the USAO, SEC, or other authorities may seek if proceedings are commenced, and the duration, scope, or outcome of any such proceedings, if they are commenced, (ii) litigation and other proceedings are inherently uncertain and unpredictable, and (iii) with respect to the matters described under the heading “Jerald Hammann,” the complaint seeks declaratory and injunctive relief. Because legal proceedings and investigations are uncertain and unpredictable and unfavorable results could occur, assessing contingencies is highly subjective and requires significant judgments about future events, including determining both the probability and reasonably estimated amount of a possible loss or range of loss. The amount of any ultimate loss may differ from any accruals or estimates that the Company may make. Nasdaq Compliance On May 25, 2021, Nasdaq sent the company a letter notifying the Company that it was no longer in compliance with Nasdaq Listing Rule 5250(c)(1) because the Company had not yet filed its Quarterly Report on Form 10-Q for the period ended March 31,2021. We submitted a plan to regain compliance. In August, we received a notification letter from Nasdaq notifying us that because we had not filed our Quarterly Report on Form 10-Q for the period ended June 30, 2021, as well as the Form 10-Q for the period ended March 31, 2021 (together, the “Form 10-Qs”), we did not comply with NASDAQ Listing Rule 5250(c)(1). Nasdaq subsequently requested that we submit an updated plan to regain compliance, which we submitted, and Nasdaq granted an exception of up to November 22, 2021, to regain compliance. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2021 | |
Common Stock | |
Common Stock | Note 10: Common Stock In January and February 2021, the Company issued common stock upon exercise of investor warrants. The warrant holders exercised for cash at exercise prices ranging from $ 0.70 1.15 5,852,000 8,356,000 On February 2, 2021, the Company completed the closing of an underwritten public offering of 46,621,621 1.11 6,081,081 48.4 3.3 |
Stock-based Compensation, Warra
Stock-based Compensation, Warrants and Shares Reserved | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation, Warrants and Shares Reserved | Note 11: Stock-based Compensation, Warrants and Shares Reserved At the Company’s 2020 annual meeting of stockholders, the stockholders approved the Company’s 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation (collectively “stock awards”). In addition, the 2020 Plan provides for the grant of cash awards. The initial aggregate number of shares of common stock that may be issued initially pursuant to stock awards under the 2020 Plan is 2,000,000 5.0 3.00 ten On January 1, 2021, pursuant to the 2020 Equity Incentive Plan the number of shares reserved for the issuance of stock awards increased by 4,692,103 Stock Options The following table summarizes the stock option activity for the nine months ended September 30, 2021 2009 Weighted-Average Weighted-Average Total Outstanding Vested and Expected to Vest as of December 31, 2020 6,508,296 $ 4.29 5.60 Options Canceled/Expired (664,057 ) $ 4.05 — Total Outstanding Vested and Expected to Vest as of September 30, 2021 5,844,239 $ 4.32 3.88 Vested at September 30, 2021 5,844,239 $ 4.32 3.88 Continuing operations expense related to stock options for the three months ended September 30, 2021 and 2020 was approximately $ 0 208,000 113,000 729,000 0 62,000 33,000 263,000 The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) of 5,844,239 6,508,296 0 5,844,239 6,397,703 0 Restricted Stock Units The following summarizes the stock option activity for the nine months ended September 30, 2021 below Number of Shares/Units Weighted Average Grant Date Fair Value Non-vested RSUs as of December 31, 2020 2,136,893 $ 3.64 RSUs Vested During the Period (66,462 ) $ 3.04 RSUs Forfeited During the Period (323,307 ) $ 3.34 Non-vested RSUs as of September 30, 2021 1,747,124 Expense related to RSUs for the three months ended September 30, 2021 and 2020 was approximately $ 153,000 829,000 1,683,000 2,440,000 1,858,000 1.61 488,000 Warrants The following table summarizes warrants outstanding at September 30, 2021 and December 31, 2020 September 30, 2021 Warrant Exercise Price Date Expiration Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2021 2019 Warrants 13,794,000 ** $ 1.15 August 5, 2019 August 5, 2024 2020 Warrants 350,000 *** $ 0.70 February 25, 2020 * September 3, 2025 Total Warrants 14,202,824 * On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. ** The Company adopted ASU 2020-06. See Note 8 in the Company’s March 31, 2021 10-Q. *** As of September 30, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 202,299 *** As of September 30, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 202,299. See Note 8. December 31, 2020 Warrant Exercise Price Date Expiration Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2021 Preferred Stock Series A-1 Warrants 1,183,432 $ 4.10 January 26, 2016 January 26, 2021 Preferred Stock Series A-2 Warrants 192,414 $ 2.90 July 11, 2016 July 11, 2021 2016 Common Stock Warrants, Private Placement 700,000 $ 2.98 August 3, 2016 August 3, 2021 2019 Warrants 13,800,000 ** $ 1.15 August 5, 2019 August 5, 2024 2020 Warrants 8,700,000 *** $ 0.70 February 25, 2020 * September 3, 2025 Total Warrants 24,634,670 * On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. ** As of December 31, 2020, the fair value of the warrant liability related to the 2019 Warrants was $ 2,484,000 *** As of December 31, 2020, the fair value of the warrant liability related to the 2020 Warrants was $ 2,001,000 ** As of December 31, 2020, the fair value of the warrant liability related to the 2019 Warrants was $2,484,000. See Note 8. *** As of December 31, 2020, the fair value of the warrant liability related to the 2020 Warrants was $2,001,000. See Note 8. At September 30, 2021, the Company has reserved shares of common stock for issuance upon exercise of Warrants 14,202,824 RSU 1,747,124 2009 Equity Incentive Plan 5,844,239 Total Shares Reserved 21,794,187 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12: Subsequent Events FDA Approval of ZIMHI On October 18, 2021, the issued a press release announcing that the FDA has approved the Company’s ZIMHI ™ (naloxone HCL Injection, USP) 5 mg/0.5 mL product. ZIMHI is a high-dose naloxone injection product FDA-approved for the treatment of opioid overdose. The approval was pursuant to the FDA’s review of the Company’s New Drug Application (“NDA”), which was resubmitted to the FDA in May 2021, pursuant to the Food, Drug & Cosmetic Act, as amended. Regulatory In October 2021, following the sale in July 2021 of certain assets of USC relating to USC’s human compounding pharmaceutical business and the Company’s approval of a restructuring process of winding down the remaining operations and business of USC and selling or disposing of the remaining assets of USC, the Company entered into a Consent Order with the Arkansas State Board of Pharmacy to resolve an ongoing administrative proceeding before the pharmacy board, pursuant to which USC agreed to surrender its Arkansas retail pharmacy permit and wholesaler/outsourcer permit effective October 31, 2021, to pay a civil penalty of $ 75,000 75,000 150,000 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources The Company’s cash and cash equivalents was $ 28,731,894 The Company prepared the condensed consolidated financial statements assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. In preparing these condensed consolidated financial statements, consideration was given to the Company’s future business as described below, which may preclude the Company from realizing the value of certain assets. The Company has significant operating cash flow deficiencies. Additionally, the Company may need additional funding in the future to help support commercialization of its products and conduct the clinical and regulatory activities relating to the Company’s product candidates, satisfy existing obligations and liabilities, and otherwise support the Company’s intended business activities and working capital needs. The preceding conditions raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements for the nine months ended September 30, 2021, were prepared under the assumption that we would continue our operations as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Our unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Management’s plans include attempting to secure additional required funding through equity or debt financings, sales or out-licensing of intellectual property or other assets, products, product candidates or technologies, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions, and through revenues from existing agreements. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. In addition, the COVID-19 pandemic has had an adverse impact on the Company. A severe or prolonged economic downturn or political disruption could result in a variety of risks to our business, including our ability to raise capital when needed on acceptable terms, if at all. On May 11, 2021, the Company and USC each received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York (“USAO”). The USAO issued the subpoenas in connection with a criminal investigation and requested a broad range of documents and materials relating to, among other matters, certain veterinary products sold by USC, certain practices, agreements, and arrangements relating to products sold by USC, including veterinary products, and certain regulatory and other matters relating to the company and USC. The Audit Committee of the company’s Board of Directors (the “Board”) engaged outside counsel to conduct an independent internal investigation to review the matters brought forth in the subpoenas and certain other matters. See Note 9 for additional information. In addition to the subpoenas from the USAO, the Company has also received requests from the SEC for the voluntary production of documents and information relating to the subject matter of the USAO’s subpoenas and certain other matters. The Company has produced documents and will continue to produce and provide documents in response to the subpoenas and requests. The Company intends to cooperate with the USAO and the SEC. At this time, the Company is unable to predict the duration, scope, or outcome of the investigations by the USAO, SEC, or other agencies, or determine what, if any, proceedings the USAO, SEC, or other federal or state authorities may initiate, what, if any, remedies or remedial measures the USAO, SEC, or other federal or state authorities may seek, or what, if any, impact the foregoing matters may have on the company’s business, previously reported financial results, financial results included in this Report, or future financial results. The foregoing matters may divert management’s attention, cause the Company to suffer reputational harm, require the Company to devote significant financial resources, subject the company and its officers and directors to civil or criminal proceedings, and depending on the resolution of the matters or any proceedings, result in fines, penalties or equitable remedies, and affect the Company’s business, previously reported financial results, financial results included in this Report, or future financial results. The occurrence of any of these events, or any determination that our activities were not in compliance with existing laws or regulations, could have a material adverse effect on the Company’s business, liquidity, financial condition, and results of operations. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share The Company computes basic loss per share by dividing the loss attributable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The diluted loss per share calculation is based on the treasury stock method and gives effect to dilutive options, warrants and other potential dilutive common stock. The effect of common stock equivalents was anti-dilutive and was excluded from the calculation of weighted average shares outstanding. Potential dilutive securities, which are not included in diluted weighted average shares outstanding for the nine months ended September 30, 2021 and September 30, 2020, consist of 14,202,824 24,634,670 5,844,239 6,590,387 1,747,124 2,345,630 |
Discontinued Operations | Discontinued Operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations The Company disposed of a component of its business in August 2021 and met the definition of a discontinued operation as of September 30, 2021. Accordingly, the operating results of the business disposed are reported as loss from discontinued operations in the accompanying unaudited condensed statements of operations for the three month and nine month periods ended September 30, 2021 and 2020. For additional information, see Note 2 - Discontinued Operations. |
Recent Accounting Pronouncement | Recent Accounting Pronouncement In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options |
Discontinued Operations and A_2
Discontinued Operations and Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DISCONTINUED OPERATIONS | |
The major assets and liabilities associated with discontinued operations included in our condensed consolidated balance sheets are as follows: | The major assets and liabilities associated with discontinued operations included in our condensed consolidated balance sheets are as follows: September 30, December 31 Carrying amounts of major classes of assets included as part of discontinued operations Cash and Cash Equivalents $ 78,034 $ 106,410 Accounts Receivable, net 202,697 850,636 Inventories 121,900 1,888,865 Fixed Assets, Held for Sale 6,888,118 7,088,715 Intangible Assets, net — 6,280,010 Goodwill — 868,412 Right-of-Use Assets — 573,998 Other Assets 34,559 182,471 Less: Loss recognized on classification as held for sale (2,177,844 ) — Total assets of the disposal group classified as discontinued operations in the statement of financial position $ 5,147,464 $ 17,839,517 Carrying amounts of major classes of liabilities included as part of discontinued operations Accounts Payable 798,017 1,711,613 Accrued Other Expenses 659,162 883,900 Lease Liabilities 455,206 581,362 Contingent Loss Liability 410,000 — Deferred Revenue — 70 Bank Loans - Building — 2,067,213 Deferred Tax Liability, net 112,530 112,530 Total liabilities of the disposal group classified as discontinued operations in the statement of financial position $ 2,434,915 $ 5,356,688 |
The revenues and expenses associated with discontinued operations included in our condensed consolidated statements of operations were as follows: | The revenues and expenses associated with discontinued operations included in our condensed consolidated statements of operations were as follows: Three Months Ended 2021 2020 Major line items constituting pretax loss of discontinued operations REVENUE, net $ 705,143 $ 3,432,436 COST OF GOODS SOLD (1,882,558 ) (2,232,256 ) Gross Loss (1,177,415 ) 1,200,180 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2,457,162 ) (2,485,272 ) RESEARCH AND DEVELOPMENT (42,076 ) (51,664 ) Impairment Expense – Intangible Assets (3,835,158 ) — Impairment Expense – Goodwill (868,412 ) — Impairment Expense – Inventory (837,414 ) — Impairment Expense – Right of Use Asset (448,141 ) — Loss from Held for Sale Classification (2,177,844 ) — (11,843,622 ) (1,336,756 ) OTHER INCOME (EXPENSE) Interest Expense — (44,321 ) Interest Income 8,619 21,862 Gain on Sale of Assets to Fagron 4,636,702 — Other Income 5,659 — Net Loss from discontinued operations before income taxes $ (7,192,642 ) $ (1,359,215 ) Nine Months Ended 2021 2020 Major line items constituting pretax loss of discontinued operations REVENUE, net $ 6,216,826 $ 10,793,269 COST OF GOODS SOLD (5,753,658 ) (7,029,950 ) 463,168 3,763,319 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (7,055,739 ) (7,880,920 ) RESEARCH AND DEVELOPMENT (89,710 ) (211,380 ) Impairment Expense – Intangible (3,835,158 ) — Impairment Expense – Goodwill (868,412 ) (3,143,200 ) Impairment Expense – Inventory (837,414 ) — Impairment Expense – Right of Use Asset (448,141 ) — Impairment Expense – Fixed Assets (9,346 ) — Loss from Held for Sale Classification (2,177,844 ) — (14,858,596 ) (7,472,181 ) OTHER INCOME (EXPENSE) Interest Expense (70,903 ) (114,042 ) Interest Income 34 28,882 Gain on Sale of Assets to Fagron 4,636,702 — Other Income 26,398 — Net Loss from discontinued operations before income taxes $ (10,266,365 ) $ (7,557,341 ) |
Inventories | Inventories September 30, 2021 December 31, 2020 Finished Goods $ — $ 1,166,198 Devices 121,900 722,667 Inventories $ 121,900 $ 1,888,865 |
The following summarizes the restructuring activities and their related accruals as of September 30, 2021: | Due to the facts and circumstances detailed above, the Company has identified three major types of restructuring activities related to the disposal of USC in addition to the $ 8.2 827,000 410,000 294,000 93,000 127,000 410,000 The following summarizes the restructuring activities and their related accruals as of September 30, 2021: Employee Contract Chemical Termination Costs Termination Cost Destruction Costs Total Balance at December 31, 2020 $ - $ - $ - $ - Restructuring charges 826,523 410,000 293,554 1,530,077 Payments (610,523) - (47,056) (657,579) Balance at September 30, 2021 $ 216,000 $ 410,000 $ 246,498 $ 872,498 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories at September 30, 2021 and December 31, 2020 consisted of the following | Inventories at September 30, 2021 and December 31, 2020 consisted of the following September 30, December 31, Finished Goods $ — $ 892,897 Work-in-Process — 334,164 Inventories $ — $ 1,227,061 |
Fixed Assets, net (Tables)
Fixed Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets, net at September 30, 2021 and December 31, 2020 are summarized in the table belo | Fixed Assets, net at September 30, 2021 and December 31, 2020 are summarized in the table belo Description Useful Life (Years) September 30, 2021 December 31, 2020 Machinery and Equipment 3 7 $ 4,519,383 $ 4,072,261 Less: Accumulated Depreciation (2,817,652 ) (1,745,823 ) Construction In Progress - Equipment 647,068 171,440 Fixed Assets, net $ 2,348,799 $ 2,497,878 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 | The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 Right-of Use Assets September 30, 2021 December 31, 2020 Operating Lease $ 731,550 $ 969,999 Lease Liabilities, Current September 30, 2021 December 31, 2020 Operating Lease $ 343,735 $ 325,766 Lease Liabilities, Non-Current Operating Lease 432,018 692,433 Total Lease Liabilities $ 775,753 $ 1,018,199 |
The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of September 30, 2021 and December 31, 2020 were | The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of September 30, 2021 and December 31, 2020 were September 30, 2021 Operating Weighted Average Remaining Lease Term 2.17 Weighted Average Discount Rate 3.95% December 31, 2020 Operating Weighted Average Remaining Lease Term 2.92 Weighted Average Discount Rate 3.95% |
The table below reconciles the undiscounted future minimum lease payments | The table below reconciles the undiscounted future minimum lease payments Year Ending December 31, Operating Remainder of 2021 $ 90,710 2022 370,950 2023 349,365 Undiscounted Future Minimum Lease Payments 811,025 Less: Difference between undiscounted lease payments and discounted lease liabilities 35,272 Total Lease Liabilities $ 775,753 Short-Term Lease Liabilities $ 343,735 Long-Term Lease Liabilities $ 432,018 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy Fair Value Measurements at September 30, 2021 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant liability $ 202,299 — $ — $ 202,299 Total common stock warrant liabilities $ 202,299 $ — $ — $ 202,299 The fair value measurement of the warrants issued by the Company in February 2020 (the “2020 Warrants”) are based on significant inputs that are unobservable and thus represents a Level 3 measurement. The Company’s estimated fair value of the Warrant liability is calculated using the Black Scholes Option Pricing Model. Key assumptions at September 30, 2021 include the expected volatility of the Company’s stock of approximately 70 0.97 0.0 0.636 Fair Value Measurements at December 31, 2020 Total Level 1 Level 2 Level 3 Liabilities 2019 Warrant Liability $ 2,484,000 $ — $ — $ 2,484,000 2020 Warrant liability 2,001,000 — — 2,001,000 Total common stock warrant liabilities $ 4,485,000 $ — $ — $ 4,485,000 |
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments, which are treated as liabilities, as follows | The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments, which are treated as liabilities, as follows 2019 Warrant 2020 Warrant Number of Liability Number of Liability (in thousands) (in thousands) Balance at December 31, 2020 13,800,000 $ 2,484,000 8,700,000 $ 2,001,000 Adoption of ASC 2020-06 (13,800,000 ) (2,484,000 ) — — Change in Fair Value of Warrants at Date of Exercise — — — 7,521,150 Exercise of Warrants — — (8,350,000 ) (9,441,650 ) Change in Fair Value, March 31, 2021 — — — 120,750 Change in Fair Value, June 30, 2021 — — — 43,574 Change in Fair Value, September 30, 2021 — — — (42,525 ) Balance at September 30, 2021 — $ — 350,000 $ 202,299 |
Stock-based Compensation, War_2
Stock-based Compensation, Warrants and Shares Reserved (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
The following table summarizes the stock option activity for the nine months ended September 30, 2021 | The following table summarizes the stock option activity for the nine months ended September 30, 2021 2009 Weighted-Average Weighted-Average Total Outstanding Vested and Expected to Vest as of December 31, 2020 6,508,296 $ 4.29 5.60 Options Canceled/Expired (664,057 ) $ 4.05 — Total Outstanding Vested and Expected to Vest as of September 30, 2021 5,844,239 $ 4.32 3.88 Vested at September 30, 2021 5,844,239 $ 4.32 3.88 |
The following summarizes the stock option activity for the nine months ended September 30, 2021 below | The following summarizes the stock option activity for the nine months ended September 30, 2021 below Number of Shares/Units Weighted Average Grant Date Fair Value Non-vested RSUs as of December 31, 2020 2,136,893 $ 3.64 RSUs Vested During the Period (66,462 ) $ 3.04 RSUs Forfeited During the Period (323,307 ) $ 3.34 Non-vested RSUs as of September 30, 2021 1,747,124 |
The following table summarizes warrants outstanding at September 30, 2021 and December 31, 2020: | The following table summarizes warrants outstanding at September 30, 2021 and December 31, 2020 September 30, 2021 Warrant Exercise Price Date Expiration Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2021 2019 Warrants 13,794,000 ** $ 1.15 August 5, 2019 August 5, 2024 2020 Warrants 350,000 *** $ 0.70 February 25, 2020 * September 3, 2025 Total Warrants 14,202,824 * On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. ** The Company adopted ASU 2020-06. See Note 8 in the Company’s March 31, 2021 10-Q. *** As of September 30, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 202,299 *** As of September 30, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 202,299. See Note 8. December 31, 2020 Warrant Exercise Price Date Expiration Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2021 Preferred Stock Series A-1 Warrants 1,183,432 $ 4.10 January 26, 2016 January 26, 2021 Preferred Stock Series A-2 Warrants 192,414 $ 2.90 July 11, 2016 July 11, 2021 2016 Common Stock Warrants, Private Placement 700,000 $ 2.98 August 3, 2016 August 3, 2021 2019 Warrants 13,800,000 ** $ 1.15 August 5, 2019 August 5, 2024 2020 Warrants 8,700,000 *** $ 0.70 February 25, 2020 * September 3, 2025 Total Warrants 24,634,670 * On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. ** As of December 31, 2020, the fair value of the warrant liability related to the 2019 Warrants was $ 2,484,000 *** As of December 31, 2020, the fair value of the warrant liability related to the 2020 Warrants was $ 2,001,000 ** As of December 31, 2020, the fair value of the warrant liability related to the 2019 Warrants was $2,484,000. See Note 8. *** As of December 31, 2020, the fair value of the warrant liability related to the 2020 Warrants was $2,001,000. See Note 8. |
At September 30, 2021, the Company has reserved shares of common stock for issuance upon exercise of | At September 30, 2021, the Company has reserved shares of common stock for issuance upon exercise of Warrants 14,202,824 RSU 1,747,124 2009 Equity Incentive Plan 5,844,239 Total Shares Reserved 21,794,187 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash and cash equivalents | $ 28,731,894 | $ 12,042,617 | $ 6,748,945 |
Warrant [Member] | |||
Potential dilutive securities, excluded from computation of earnings | 14,202,824 | 24,634,670 | |
Share-based Payment Arrangement, Option [Member] | |||
Potential dilutive securities, excluded from computation of earnings | 5,844,239 | 6,590,387 | |
Restricted Stock Units (RSUs) [Member] | |||
Potential dilutive securities, excluded from computation of earnings | 1,747,124 | 2,345,630 |
The major assets and liabilitie
The major assets and liabilities associated with discontinued operations included in our condensed consolidated balance sheets are as follows: (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents | $ 78,034 | $ 106,410 |
Accounts Receivable, net | 202,697 | 850,636 |
Inventories | 121,900 | 1,888,865 |
Fixed Assets, Held for Sale | 6,888,118 | 7,088,715 |
Intangible Assets, net | 6,280,010 | |
Goodwill | 868,412 | |
Right-of-Use Assets | 573,998 | |
Other Assets | 34,559 | 182,471 |
Less: Loss recognized on classification as held for sale | (2,177,844) | |
Total assets of the disposal group classified as discontinued operations in the statement of financial position | 5,147,464 | 17,839,517 |
Carrying amounts of major classes of liabilities included as part of discontinued operations | ||
Accounts Payable | 798,017 | 1,711,613 |
Accrued Other Expenses | 659,162 | 883,900 |
Lease Liabilities | 455,206 | 581,362 |
Contingent Loss Liability | 410,000 | |
Deferred Revenue | 70 | |
Bank Loans - Building | 2,067,213 | |
Deferred Tax Liability, net | 112,530 | 112,530 |
Total liabilities of the disposal group classified as discontinued operations in the statement of financial position | $ 2,434,915 | $ 5,356,688 |
The revenues and expenses assoc
The revenues and expenses associated with discontinued operations included in our condensed consolidated statements of operations were as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Major line items constituting pretax loss of discontinued operations | ||||
REVENUE, net | $ 705,143 | $ 3,432,436 | $ 6,216,826 | $ 10,793,269 |
COST OF GOODS SOLD | (1,882,558) | (2,232,256) | (5,753,658) | (7,029,950) |
(1,177,415) | 1,200,180 | 463,168 | 3,763,319 | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | (2,457,162) | (2,485,272) | (7,055,739) | (7,880,920) |
RESEARCH AND DEVELOPMENT | (42,076) | (51,664) | (89,710) | (211,380) |
Impairment Expense – Intangible | (3,835,158) | (3,835,158) | ||
Impairment Expense – Goodwill | (868,412) | (868,412) | (3,143,200) | |
Impairment Expense – Inventory | (837,414) | (837,414) | ||
Impairment Expense – Right of Use Asset | (448,141) | (448,141) | ||
Impairment Expense – Fixed Assets | (9,346) | |||
Loss from Held for Sale Classification | (2,177,844) | (2,177,844) | ||
(11,843,622) | (1,336,756) | (14,858,596) | (7,472,181) | |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (44,321) | (70,903) | (114,042) | |
Interest Income | 8,619 | 21,862 | 34 | 28,882 |
Gain on Sale of Assets to Fagron | 4,636,702 | 4,636,702 | ||
Other Income | 5,659 | 26,398 | ||
Net Loss from discontinued operations before income taxes | $ (7,192,642) | $ (1,359,215) | $ (10,266,365) | $ (7,557,341) |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Inventories | $ 121,900 | $ 1,888,865 |
USC [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Finished Goods | 1,166,198 | |
Devices | 121,900 | 722,667 |
Inventories | $ 121,900 | $ 1,888,865 |
The following summarizes the re
The following summarizes the restructuring activities and their related accruals as of September 30, 2021: (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Balance at December 31, 2021 | |
Restructuring charges | 1,530,077 |
Payments | (657,579) |
Balance at September 30, 2021 | 872,498 |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance at December 31, 2021 | |
Restructuring charges | 826,523 |
Payments | (610,523) |
Balance at September 30, 2021 | 216,000 |
Contract Termination [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance at December 31, 2021 | |
Restructuring charges | 410,000 |
Payments | |
Balance at September 30, 2021 | 410,000 |
Chemical Destruction Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Balance at December 31, 2021 | |
Restructuring charges | 293,554 |
Payments | (47,056) |
Balance at September 30, 2021 | $ 246,498 |
Discontinued Operations and A_3
Discontinued Operations and Assets Held for Sale (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale | $ 4,636,702 | $ 4,636,702 | ||||
Financial advisor fee payable | 700,000 | 700,000 | ||||
Percentage of variable consideration receivable | 20.00% | |||||
Impairment Expense - Intangible | 3,835,158 | 3,835,158 | ||||
Intangible assets | $ 6,280,010 | |||||
Impairment Expense - Goodwill | 868,412 | 868,412 | 3,143,200 | |||
Goodwill | 868,412 | |||||
Loss from Held for Sale Classification - Fixed Assets | 2,177,844 | 2,177,844 | ||||
Right-of-Use Assets | 573,998 | |||||
Impairment Expense - ROU | 448,141 | 448,141 | ||||
Impairment Expense - Inventory | 837,414 | 837,414 | ||||
Inventory | 121,900 | 121,900 | 1,888,865 | |||
Reserve for obsolescence | 0 | 0 | 255,000 | |||
Restructuring charges | 1,530,077 | |||||
Restructuring liabilities | 872,498 | 872,498 | ||||
Bank Loans - Building | 2,067,213 | |||||
Employee Severance [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring charges | 826,523 | |||||
Restructuring liabilities | 216,000 | 216,000 | ||||
Contract Termination [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring charges | 410,000 | |||||
Restructuring liabilities | 410,000 | 410,000 | ||||
Chemical Destruction Costs [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring charges | 293,554 | |||||
Restructuring liabilities | 246,498 | 246,498 | ||||
Discontinued Operations [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Asset impairments | 8,200,000 | |||||
Discontinued Operations [Member] | Employee Severance [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring charges | 827,000 | 827,000 | ||||
Remaining restructuring costs | 93,000 | 93,000 | ||||
Discontinued Operations [Member] | Employee Severance [Member] | Accrued Other Expenses [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring liabilities | 216,000 | 216,000 | ||||
Discontinued Operations [Member] | Contract Termination [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring charges | 410,000 | 410,000 | ||||
Discontinued Operations [Member] | Contract Termination [Member] | Contingent Loss Liability [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring liabilities | 410,000 | 410,000 | ||||
Discontinued Operations [Member] | Chemical Destruction Costs [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring charges | 294,000 | 294,000 | ||||
Remaining restructuring costs | 127,000 | 127,000 | ||||
Discontinued Operations [Member] | Chemical Destruction Costs [Member] | Accrued Other Expenses [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring liabilities | 227,000 | 227,000 | ||||
Discontinued Operations [Member] | Chemical Destruction Costs [Member] | Accounts Payable [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restructuring liabilities | 19,000 | 19,000 | ||||
USC [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain from sale of intangible assets | 1,856,000 | |||||
Impairment Expense - Intangible | 3,835,000 | |||||
Intangible assets | 0 | 0 | 6,280,000 | |||
Impairment Expense - Goodwill | 868,000 | |||||
Goodwill | 0 | 0 | 868,412 | |||
Loss from Held for Sale Classification - Fixed Assets | 2,178,000 | 2,178,000 | ||||
Right-of-Use Assets | 0 | 0 | 573,998 | |||
Impairment Expense - ROU | 448,000 | |||||
Impairment Expense - Inventory | 837,000 | 837,000 | ||||
Inventory | 121,900 | 121,900 | 1,888,865 | |||
Reserve for obsolescence | 0 | 0 | 191,000 | |||
Bank Loans - Building | $ 0 | 0 | $ 2,067,000 | |||
USC [Member] | Chemicals [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Impairment Expense - Inventory | 598,000 | |||||
USC [Member] | Devices [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Impairment Expense - Inventory | $ 239,000 | |||||
Fagron Compounding Services LLC [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration for assets sold | $ 107,000 | |||||
Variable consideration | 6,385,000 | |||||
Gain on sale | 4,637,000 | |||||
Allocated costs | $ 1,856,000 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | 3 Months Ended | 7 Months Ended | 8 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Aug. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | |
Standard payment terms | The standard payment terms are 2%/10 and Net 30 | |||||||
Revenues recognized previously reported as deferred revenue | $ 25,000 | $ 462,500 | $ 900,000 | $ 75,000 | ||||
Impairment of Contract Assets | $ 1,750,000 | |||||||
SYMJEPI [Member] | ||||||||
Capitalized contract cost | $ 2,000,000 | |||||||
USWM Agreement [Member] | ||||||||
Term of agreement | 10 years | |||||||
Sandoz Agreement [Member] | Sandoz [Member] | ||||||||
Deferred revenue | $ 875,000 | $ 875,000 | $ 875,000 | $ 950,000 |
Inventories at September 30, 20
Inventories at September 30, 2021 and December 31, 2020 consisted of the following (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 892,897 | |
Work-in-Process | 334,164 | |
Inventories | $ 1,227,061 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |||
Reserve for obsolescence | $ 0 | $ 0 | $ 255,000 |
Inventory derecognized | 776,000 | ||
Consideration received for inventory derecognized | 445,000 | ||
Inventory loss | $ 330,000 | $ 330,000 |
Fixed Assets, net at September
Fixed Assets, net at September 30, 2021 and December 31, 2020 are summarized in the table belo (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Machinery and Equipment | $ 4,519,383 | $ 4,072,261 |
Less: Accumulated Depreciation | (2,817,652) | (1,745,823) |
Construction In Progress - Equipment | 647,068 | 171,440 |
Fixed Assets, net | $ 2,348,799 | $ 2,497,878 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years |
Fixed Assets, net (Details Narr
Fixed Assets, net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 375,000 | $ 342,000 | $ 1,072,000 | $ 978,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Aug. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | |||||
Lease remaining term | 26 months | 26 months | |||
Operating lease expense | $ 88,000 | $ 88,000 | $ 265,000 | $ 265,000 | |
Cash paid operating lease | $ 90,000 | $ 87,000 | $ 269,000 | $ 262,000 |
The tables below present the op
The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Right-of Use Assets | ||
Operating Lease | $ 731,550 | $ 969,999 |
Lease Liabilities, Current | ||
Operating Lease | 343,735 | 325,766 |
Lease Liabilities, Non-Current | ||
Operating Lease | 432,018 | 692,433 |
Total Lease Liabilities | $ 775,753 | $ 1,018,199 |
The Company_s weighted average
The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of September 30, 2021 and December 31, 2020 were (Details) | Sep. 30, 2021 | Dec. 31, 2020 |
Leases | ||
Weighted Average Remaining Lease Term - Operating | 2 years 2 months 1 day | 2 years 11 months 1 day |
Weighted Average Discount Rate - Operating | 3.95% | 3.95% |
The table below reconciles the
The table below reconciles the undiscounted future minimum lease payments (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Leases | ||
Operating, Remainder of 2021 | $ 90,710 | |
Operating, 2022 | 370,950 | |
Operating, 2023 | 349,365 | |
Operating, Undiscounted Future Minimum Lease Payments | 811,025 | |
Operating, Less: Difference between undiscounted lease payments and discounted lease liabilities | 35,272 | |
Operating, Total Lease Liabilities | 775,753 | $ 1,018,199 |
Operating, Short-Term Lease Liabilities | 343,735 | 325,766 |
Operating, Long-Term Lease Liabilities | $ 432,018 | $ 692,433 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Apr. 13, 2020 | Sep. 30, 2021 | Sep. 28, 2021 | Aug. 05, 2021 | Mar. 15, 2021 |
First Draw PPP Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount | $ 0 | ||||
Second Draw PPP Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount | $ 0 | ||||
Paycheck Protection Program [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of loan amount use for eligible costs | 60.00% | ||||
Paycheck Protection Program [Member] | Promissory Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from debt | $ 3,191,700 | ||||
Debt amount | $ 3,191,700 | ||||
Interest rate | 1.00% | ||||
Second Draw PPP Loan [Member] | Promissory Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt amount | $ 1,765,495 | ||||
Interest rate | 1.00% |
The following table sets forth
The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
2020 Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | $ 202,299 | $ 2,001,000 |
2019 Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | 2,484,000 | |
Fair Value, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | 202,299 | 4,485,000 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | ||
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | ||
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | 202,299 | 4,485,000 |
Fair Value, Recurring [Member] | 2020 Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | 202,299 | 2,001,000 |
Fair Value, Recurring [Member] | 2020 Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | ||
Fair Value, Recurring [Member] | 2020 Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | ||
Fair Value, Recurring [Member] | 2020 Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | $ 202,299 | 2,001,000 |
Fair Value, Recurring [Member] | 2019 Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | 2,484,000 | |
Fair Value, Recurring [Member] | 2019 Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | ||
Fair Value, Recurring [Member] | 2019 Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | ||
Fair Value, Recurring [Member] | 2019 Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total common stock warrant liability | $ 2,484,000 |
The following table sets fort_2
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments, which are treated as liabilities, as follows (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | |
Class of Warrant or Right [Line Items] | ||||
Number of warrants, beginning balance | 24,634,670 | 24,634,670 | ||
Number of warrants, ending balance | 14,202,824 | 14,202,824 | ||
Warrants 2019 [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants, beginning balance | 13,800,000 | 13,800,000 | ||
Warrant liability, beginning balance | $ 2,484,000 | $ 2,484,000 | ||
Adoption of ASC 2020-06 (in shares) | (13,800,000) | |||
Adoption of ASC 2020-06 | $ (2,484,000) | |||
Number of warrants, ending balance | ||||
Warrant liability, ending balance | ||||
Warrants 2020 [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants, beginning balance | 8,700,000 | 8,700,000 | ||
Warrant liability, beginning balance | $ 2,001,000 | $ 2,001,000 | ||
Change in Fair Value of Warrants at date of exercise | $ 7,521,150 | |||
Exercise of Warrants (in shares) | (8,350,000) | |||
Exercise of Warrants | $ (9,441,650) | |||
Change in Fair Value | $ (42,525) | $ 43,574 | $ 120,750 | |
Number of warrants, ending balance | 350,000 | 350,000 | ||
Warrant liability, ending balance | $ 202,299 | $ 202,299 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details Narrative) | Sep. 30, 2021$ / shares | Dec. 31, 2020$ / shares |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.70 | |
Measurement Input, Price Volatility [Member] | 2019 Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.80 | |
Measurement Input, Price Volatility [Member] | 2020 Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.70 | |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.97 | 0.49 |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0 | 0 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.00636 | |
Measurement Input, Risk Free Interest Rate [Member] | 2019 Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.0026 | |
Measurement Input, Risk Free Interest Rate [Member] | 2020 Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.0036 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Oct. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||||||
Maintenance fees | $ 0 | $ 420,000 | $ 0 | $ 1,260,000 | ||
Contingent Loss Liability | 410,000 | $ 410,000 | ||||
Consent Order [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Amount accrued | $ 150,000 | |||||
Subsequent Event [Member] | Consent Order [Member] | Civil Penalty [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement amount | $ 75,000 | |||||
Subsequent Event [Member] | Consent Order [Member] | Investigative Costs [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement amount | $ 75,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Feb. 02, 2021 | Feb. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Class of Stock [Line Items] | ||||
Proceeds from warrant exercises | $ 5,852,000 | $ 5,851,900 | ||
Warrants exercised | 8,356,000 | |||
Number of shares issued | 46,621,621 | |||
Offering price (in dollars per share) | $ 1.11 | |||
Proceeds from issuance of common stock | $ 48,400,000 | 51,749,998 | 18,228,000 | |
Underwriting discounts and commissions | $ 3,300,000 | $ 3,330,752 | $ 1,334,289 | |
Over-Allotment Option [Member] | ||||
Class of Stock [Line Items] | ||||
Number of shares issued | 6,081,081 | |||
Minimum [Member] | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in dollars per share) | $ 0.70 | |||
Maximum [Member] | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in dollars per share) | $ 1.15 |
The following table summarizes
The following table summarizes the stock option activity for the nine months ended September 30, 2021 (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total outstanding and vested and expected to vest at beginning | 6,508,296 |
Total outstanding and vested and expected to vest at ending | 5,844,239 |
Vested at ending | 5,844,239 |
2009 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total outstanding and vested and expected to vest at beginning | 6,508,296 |
Options outstanding, weighted average exercise price, beginning balance | $ / shares | $ 4.29 |
Options outstanding, weighted average remaining contractual term at beginning | 5 years 7 months 6 days |
Options canceled/expired | (664,057) |
Options canceled/expired, weighted average exercise price | $ / shares | $ 4.05 |
Total outstanding and vested and expected to vest at ending | 5,844,239 |
Options outstanding, weighted average exercise price, ending balance | $ / shares | $ 4.32 |
Options outstanding, weighted average remaining contractual term at ending | 3 years 10 months 17 days |
Vested at ending | 5,844,239 |
Option vested, weighted average exercise price at ending | $ / shares | $ 4.32 |
Options vested, weighted average remaining contractual term at ending | 3 years 10 months 17 days |
The following summarizes the st
The following summarizes the stock option activity for the nine months ended September 30, 2021 below (Details) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested RSUs, beginning balance | 2,136,893 |
Weighted average grant date fair value of non-vested RSUs, beginning balance | $ / shares | $ 3.64 |
RSUs vested during the period | (66,462) |
Weighted average grant date fair value of RSUs vested during the period | $ / shares | $ 3.04 |
RSUs forfeited during the period | (323,307) |
Weighted average grant date fair value of RSUs forfeited during the period | $ / shares | $ 3.34 |
Non-vested RSUs, ending balance | 1,747,124 |
The following table summarize_2
The following table summarizes warrants outstanding at September 30, 2021 and December 31, 2020: (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | |||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 14,202,824 | 24,634,670 | ||
Old Adamis Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 58,824 | 58,824 | ||
Warrants exercise price (in dollars per share) | $ 8.50 | $ 8.50 | ||
Date issued | Nov. 15, 2007 | Nov. 15, 2007 | ||
Expiration date | Nov. 15, 2021 | Nov. 15, 2021 | ||
2019 Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 13,794,000 | [1] | 13,800,000 | [2] |
Warrants exercise price (in dollars per share) | $ 1.15 | $ 1.15 | ||
Date issued | Aug. 5, 2019 | Aug. 5, 2019 | ||
Expiration date | Aug. 5, 2024 | Aug. 5, 2024 | ||
Warrant liability | $ 2,484,000 | |||
2020 Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 350,000 | [3] | 8,700,000 | [4] |
Warrants exercise price (in dollars per share) | $ 0.70 | $ 0.70 | ||
Date issued | Feb. 25, 2020 | [5] | Feb. 25, 2020 | [6] |
Expiration date | Sep. 3, 2025 | Sep. 3, 2025 | ||
Warrant liability | $ 202,299 | $ 2,001,000 | ||
Preferred Stock Series A-1 Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 1,183,432 | |||
Warrants exercise price (in dollars per share) | $ 4.10 | |||
Date issued | Jan. 26, 2016 | |||
Expiration date | Jan. 26, 2021 | |||
Preferred Stock Series A-2 Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 192,414 | |||
Warrants exercise price (in dollars per share) | $ 2.90 | |||
Date issued | Jul. 11, 2016 | |||
Expiration date | Jul. 11, 2021 | |||
2016 Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants outstanding | 700,000 | |||
Warrants exercise price (in dollars per share) | $ 2.98 | |||
Date issued | Aug. 3, 2016 | |||
Expiration date | Aug. 3, 2021 | |||
[1] | The Company adopted ASU 2020-06. See Note 8 in the Company’s March 31, 2021 10-Q. | |||
[2] | As of December 31, 2020, the fair value of the warrant liability related to the 2019 Warrants was $2,484,000. See Note 8. | |||
[3] | As of September 30, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 202,299. See Note 8. | |||
[4] | As of December 31, 2020, the fair value of the warrant liability related to the 2020 Warrants was $2,001,000. See Note 8. | |||
[5] | On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. | |||
[6] | On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. |
At September 30, 2021, the Comp
At September 30, 2021, the Company has reserved shares of common stock for issuance upon exercise of (Details) | Sep. 30, 2021shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total Shares Reserved | 21,794,187 |
2009 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total Shares Reserved | 5,844,239 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total Shares Reserved | 1,747,124 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total Shares Reserved | 14,202,824 |
Stock-based Compensation, War_3
Stock-based Compensation, Warrants and Shares Reserved (Details Narrative) | Jan. 02, 2021shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)d$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expenses | $ 1,830,402 | $ 3,432,367 | ||||
Number of stock options outstanding | shares | 5,844,239 | 5,844,239 | 6,508,296 | |||
Agrregate intrinsic value | $ 0 | $ 0 | $ 0 | |||
Number of stock options exercisable | shares | 5,844,239 | 5,844,239 | 6,397,703 | |||
Options exercisable, aggregate intrinsic value | $ 0 | $ 0 | $ 0 | |||
Share-based Payment Arrangement, Option [Member] | Continuing Operations [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expenses | 0 | $ 208,000 | 113,000 | 729,000 | ||
Share-based Payment Arrangement, Option [Member] | Discontinued Operations [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expenses | 0 | 62,000 | 33,000 | 263,000 | ||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expenses | 153,000 | $ 829,000 | 1,683,000 | $ 2,440,000 | ||
Unrecognized stock compensation | 1,858,000 | $ 1,858,000 | ||||
Period for recognition | 1 year 7 months 9 days | |||||
Reduction in Share Based Compensation Expense due to Employee Termination | $ 488,000 | |||||
Equity Incentive Plan 2020 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | shares | 2,000,000 | |||||
Increase in shares reserved, percentage | 5.00% | |||||
Minimum closing price per share requirement for plan awards | $ / shares | $ 3 | |||||
Threshold consecutive trading days | d | 10 | |||||
Number of additional shares authorized | shares | 4,692,103 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Consent Order [Member] - USD ($) | Oct. 31, 2021 | Sep. 30, 2021 |
Subsequent Event [Line Items] | ||
Amount accrued | $ 150,000 | |
Subsequent Event [Member] | Civil Penalty [Member] | ||
Subsequent Event [Line Items] | ||
Settlement amount | $ 75,000 | |
Subsequent Event [Member] | Investigative Costs [Member] | ||
Subsequent Event [Line Items] | ||
Settlement amount | $ 75,000 |