Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 11, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
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 | 149,733,265 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 17,767,735 | $ 23,220,770 |
Restricted Cash | 30,034 | 30,023 |
Accounts Receivable, net | 1,516,149 | 815,565 |
Receivable from Fagron | 3,084,812 | 5,084,452 |
Inventories | 31,998 | 418,607 |
Prepaid Expenses and Other Current Assets | 1,082,545 | 1,313,546 |
Current Assets of Discontinued Operations, Note 2 | 4,277,153 | 4,320,659 |
Total Current Assets | 27,790,426 | 35,203,622 |
LONG TERM ASSETS | ||
Fixed Assets, net | 2,137,895 | 2,334,768 |
Right-of-Use Assets | 568,537 | 650,460 |
Other Non-Current Assets | 52,174 | 109,137 |
Total Assets | 30,549,032 | 38,297,987 |
CURRENT LIABILITIES | ||
Accounts Payable | 4,891,462 | 3,754,010 |
Deferred Revenue, current portion | 100,000 | 100,000 |
Accrued Other Expenses | 2,498,731 | 2,800,241 |
Accrued Bonuses | 353,026 | 535,624 |
PPP2 Loan Contingent Loss Liability | 1,850,000 | |
Product Recall Liability | 2,000,000 | 2,000,000 |
Lease Liabilities, Current Portion | 356,122 | 349,871 |
Current Liabilities of Discontinued Operations, Note 2 | 1,533,781 | 1,683,246 |
Total Current Liabilities | 13,583,122 | 11,222,992 |
LONG TERM LIABILITIES | ||
Deferred Revenue, net of current portion | 725,000 | 750,000 |
Lease Liabilities, net of current portion | 250,361 | 342,562 |
Warrant Liabilities, at fair value | 90,268 | 99,655 |
Total Liabilities | 14,648,751 | 12,415,209 |
STOCKHOLDERS’ EQUITY | ||
Preferred Stock - Par Value $0.0001; 10,000,000 Shares Authorized; no shares Issued and Outstanding at March 31, 2022 (Unaudited) and December 31, 2021, respectively. | ||
Common Stock - Par Value $.0001 ; 200,000,000 Shares Authorized; 150,256,222 and 150,117,219 Issued, 149,733,265 and 149,594,262 Outstanding at March 31, 2022 (Unaudited) and December 31, 2021, respectively | 15,026 | 15,012 |
Additional Paid-in Capital | 304,330,933 | 303,958,829 |
Accumulated Deficit | (288,440,428) | (278,085,813) |
Treasury Stock - 522,957 Shares, at cost | (5,250) | (5,250) |
Total Stockholders’ Equity | 15,900,281 | 25,882,778 |
Total Liabilities and Stockholders’ Equity | $ 30,549,032 | $ 38,297,987 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, oustanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 150,256,222 | 150,117,219 |
Common stock, outstanding | 149,733,265 | 149,594,262 |
Treasury Stock, Shares | 522,957 | 522,957 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
REVENUE, net | $ 1,154,514 | $ 1,393,097 |
COST OF GOODS SOLD | 1,463,582 | 1,845,237 |
Gross Loss | (309,068) | (452,140) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 3,382,696 | 3,518,052 |
RESEARCH AND DEVELOPMENT | 4,221,525 | 2,249,744 |
Loss from Operations | (7,913,289) | (6,219,936) |
OTHER INCOME (EXPENSE) | ||
Interest Income | 4,148 | 1,452 |
Interest Expense | (1,884) | |
Other Expense | (440,000) | |
Loss on PPP2 loan | (1,850,000) | |
Change in Fair Value of Warrants | 9,387 | (7,641,900) |
Total Other Income (Expense), net | (2,276,465) | (7,642,332) |
Net Loss from Continuing Operations | (10,189,754) | (13,862,268) |
DISCONTINUED OPERATIONS | ||
Net Loss from Discontinued Operations before Income Taxes | (164,861) | (1,516,966) |
Income Taxes - Discontinued Operations | ||
Net Loss from Discontinued Operations | (164,861) | (1,516,966) |
Net Loss Applicable to Common Stock | $ (10,354,615) | $ (15,379,234) |
Basic and Diluted (Loss) Per Share: | ||
Continuing Operations, Basic (Loss) Per Share | $ (0.07) | $ (0.11) |
Continuing Operations, Diluted (Loss) Per Share | (0.07) | (0.11) |
Discontinued Operations, Basic (Loss) Per Share | (0.01) | |
Discontinued Operations, Diluted (Loss) Per Share | (0.01) | |
Basic Loss Per Share | (0.07) | (0.12) |
Diluted Loss Per Share | $ (0.07) | $ (0.12) |
Basic Weighted Average Shares Outstanding | 149,617,429 | 129,463,867 |
Diluted Weighted Average Shares Outstanding | 149,617,429 | 129,463,867 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 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, 2020 | $ 9,437 | $ 238,234,968 | $ (5,250) | $ (232,257,615) | $ 5,981,540 | |
Beginning balance, shares at Dec. 31, 2020 | 94,365,015 | 522,957 | ||||
Common Stock Issued, Net of Issuance Costs of $3,330,752 | $ 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 | 879,774 | 879,774 | ||||
Net Loss | (15,379,234) | (15,379,234) | ||||
Ending balance, value at Mar. 31, 2021 | $ 14,941 | 302,822,034 | $ (5,250) | (247,636,849) | 55,194,876 | |
Ending balance, shares at Mar. 31, 2021 | 149,409,098 | 522,957 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 15,012 | 303,958,829 | $ (5,250) | (278,085,813) | 25,882,778 | |
Beginning balance, shares at Dec. 31, 2021 | 150,117,219 | 522,957 | ||||
Issuance of Restricted Stock Units (RSUs) | $ 14 | (14) | ||||
Issuance of Restricted Stock Units (RSUs) (in shares) | 139,003 | |||||
Share Based Compensation | 372,118 | 372,118 | ||||
Net Loss | (10,354,615) | (10,354,615) | ||||
Ending balance, value at Mar. 31, 2022 | $ 15,026 | $ 304,330,933 | $ (5,250) | $ (288,440,428) | $ 15,900,281 | |
Ending balance, shares at Mar. 31, 2022 | 150,256,222 | 522,957 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Common Stock Issued, issuance costs | $ 3,330,752 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (10,354,615) | $ (15,379,234) |
Less: Loss from Discontinued Operations | 164,861 | 1,516,966 |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Stock Based Compensation | 372,118 | 879,774 |
Provision for Excess and Obsolete Inventory | (7,421) | 194,092 |
Change in Fair Value of Warrant Liability | (9,387) | 7,641,900 |
(Cash Payments in Excess of Lease Expense) Lease Expense in Excess of Cash | (4,027) | |
Depreciation and Amortization Expense | 344,155 | 327,907 |
Change in Operating Assets and Liabilities: | ||
Accounts Receivable | (784,524) | 42,574 |
Variable Consideration of Receivable from Fagron | 440,000 | |
Inventories | 394,030 | 192,256 |
Prepaid Expenses and Other Current & Non-current Assets | 371,905 | 466,917 |
Accounts Payable | 1,171,894 | 1,007,334 |
Operating Leases | (1,331) | |
PPP2 Loan Contingent Loss Liability | 1,850,000 | |
Deferred Revenue | (25,000) | (25,000) |
Accrued Other Expenses and Bonuses | (638,905) | (85,343) |
Net Cash Used in Operating Activities of Continuing Operations | (6,714,916) | (3,221,188) |
Net Cash Used in Operating Activities in Discontinued Operations | (270,820) | (1,315,565) |
Net Cash Used in Operating Activities | (6,985,736) | (4,536,753) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Equipment | (26,928) | (405,496) |
Proceeds from Receivable from Fagron | 1,559,640 | |
Net Cash Provided by (Used in) Investing Activities of Continuing Operations | 1,532,712 | (405,496) |
Net Cash Provided by (Used in) Investing Activities of Discontinued Operations | (689) | |
Net Cash Provided by (Used in) Investing Activities | 1,532,712 | (406,185) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Common Stock | 51,749,998 | |
Costs of Issuance of Common Stock | (3,330,752) | |
Proceeds from Exercise of Warrants | 5,851,900 | |
Proceeds of PPP Loan | 1,765,495 | |
Net Cash Provided by Financing Activities of Continuing Operations | 56,036,641 | |
Net Cash Used in Financing Activities of Discontinued Operations | (25,857) | |
Net Cash Provided by Financing Activities | 56,010,784 | |
(Decrease) Increase in Cash and Cash Equivalents and Restricted Cash | (5,453,024) | 51,067,846 |
Cash and Cash Equivalents and Restricted Cash: | ||
Beginning Balance | 23,250,793 | 6,855,355 |
(Decrease) Increase in Cash and Restricted Cash from Discontinued Operations | (292,572) | |
Ending Balance | 17,797,769 | 57,630,629 |
RECONCILIATION OF CASH & CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash & Cash Equivalents | 17,767,735 | 57,630,629 |
Restricted Cash | 30,034 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Increase (Decrease) in Accrued Capital Expenditures | $ 120,355 | $ 28,259 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
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 8 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, 2021 (the “2021 Form 10-K”). For the quarters ended March 31, 2022 and March 31, 2021, and year ended December 31, 2021, 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 the quarters ended March 31, 2022 and 2021, 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 were $ 17,797,769 23,250,793 The Condensed consolidated financial statements were prepared under the assumption that the Company will continue our operations 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 will 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 and future 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 three months ended March 31, 2022, 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 and sales of prescription compounded formulations. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. In addition, a severe or prolonged economic downturn, political disruption or pandemic, such as the COVID-19 pandemic, could result in a variety of risks to our business, including our ability to raise capital when needed on acceptable terms, if at all. Basic and Diluted 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 three months ended March 31, 2022 and March 31, 2021, consist of outstanding equity classified warrants covering 14,202,824 15,095,238 4,916,142 6,431,796 900,000 2,034,260 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 March 31, 2022. 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 year ended March 31, 2022 and March 31, 2021. For additional information, see Note 2 - Discontinued Operations and Assets Held for Sale. Recent Accounting Pronouncements 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 | 3 Months Ended |
Mar. 31, 2022 | |
DISCONTINUED OPERATIONS | |
Discontinued Operations and Assets Held for Sale | Note 2: Discontinued Operations and Assets Held for Sale In August 2021, the Company announced an agreement with Fagron Compounding Services, LLC (“Fagron”) to sell to Fagron certain assets of the Company’s subsidiary, US Compounding, Inc. (“USC”), related to the Company’s 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 1,856,000 440,000 700,000 In July 2021, the Company approved 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 December 31, 2021, the Company had shut down the operations of USC, terminated all of USC’s employees and is 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 the disposal of USC’s assets by the end of December 2022. 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 consolidated balance sheets are as follows (unaudited): Carrying amounts of major classes of assets included as part of discontinued operations (unaudited): March 31, 2022 December 31, 2021 Cash and Cash Equivalents $ 23,629 $ 37,849 Accounts Receivable, net — 693 Inventories 12,000 12,000 Fixed Assets, net 4,189,648 6,799,090 Other assets 51,875 72,469 Loss recognized on classification as held for sale — (2,601,442 ) Total assets of the disposal group classified as held for sale in the statement of financial position $ 4,277,152 $ 4,320,659 Carrying amounts of major classes of liabilities included as part of discontinued operations Accounts Payable 623,670 681,646 Accrued Other Expenses 84,161 133,313 Lease Liabilities 370,020 412,357 Contingent Loss Liability 410,000 410,000 Deferred Tax Liability 45,930 45,930 Total liabilities of the disposal group classified as held for sale in the statement of financial position $ 1,533,781 $ 1,683,246 The revenues and expenses associated with discontinued operations included in our consolidated statements of operations were as follows (unaudited): Three-Months Ended March 31, 2022 2021 Major line items constituting pretax profit (loss) of discontinued operations REVENUE, net $ — $ 2,775,853 COST OF GOODS SOLD — (1,857,129 ) Gross Profit — 918,724 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (172,472 ) (2,401,422 ) RESEARCH AND DEVELOPMENT — (11,578 ) OTHER INCOME (EXPENSE) Interest Expense — (37,441 ) Interest Income 11 14,751 Gain from asset disposal 7,600 — Loss from discontinued operations before income taxes (164,861 ) (1,516,966 ) Income tax benefit — — Loss from discontinued operations after income taxes $ (164,861 ) $ (1,516,966 ) Discontinued Operations - Revenue Compounded Pharmaceuticals Facility Revenue Recognition. The standard payment terms are 2%/10 and Net 30 Discontinued Operations - Lease USC has two one one one year four years 10,824 December 31, 2023 As part of the restructuring process to wind down and cease the operations at USC, the Company is working to cancel or transfer the leases of the discontinued operations. During the year ended December 31, 2021, the Right-of-Use assets related to the leases of approximately $ 448,000 412,000 370,000 Discontinued Operations - 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. These three types of activities are employee terminations, contract termination costs, and chemical destruction costs. For those restructuring activities, the Company recorded approximately $ 920,000 410,000 422,000 410,000 410,000 3,000 Discontinued Operations - Building Loan On November 10, 2016, a Loan Amendment and Assumption Agreement was entered with into the lender. Pursuant to the agreement, as subsequently amended, the Company agreed to pay the lender monthly 19,000 In July 2021, the Company, in connection with the sale of certain USC assets to Fagron, paid to the lender 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. The land and building were included in the assets of discontinued operations. As of March 31, 2022 and December 31, 2021, the outstanding principal balance owed on the applicable note was $ 0 0 6.00% 0 37,000 |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2022 | |
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” (ASC 606). Accordingly, revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following 5-step process: 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 subsidiary US Compounding, Inc. or USC, provided 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. In July 2021, the Company sold certain assets relating to USC’s human compounding pharmaceutical business and approved a restructuring process to wind down the remaining USC business and sell, liquidate or otherwise dispose of the remaining USC assets. Effective October 31, 2021, USC surrendered its Arkansas retail pharmacy permit and wholesaler/outsourcer permit and is no longer selling compounded pharmaceutical or veterinary products. 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. Exclusive Distribution and Commercialization Agreement for SYMJEPI and ZIMHI with US WorldMeds On May 11, 2020, the Company also entered into an exclusive distribution and commercialization agreement (the “USWM Agreement”) with USWM for the United States commercial rights for the SYMJEPI products, as well as for the Company’s ZIMHI ™ Under the terms of the USWM Agreement, the Company appointed USWM as the exclusive (including as to the Company) distributor of SYMJEPI in the United States and related territories (“Territory”) effective upon the termination of the Sandoz Agreement, and of the ZIMHI product if approved by the U.S. Food and Drug Administration (“FDA”) for marketing, and granted USWM an exclusive license under the Company’s patent and other intellectual property rights and know-how to market, sell, and otherwise commercialize and distribute the products in the Territory, subject to the provisions of the USWM Agreement, in partial consideration of an initial payment by USWM and potential regulatory and commercial based milestone payments totaling up to $ 26 USWM Effective May 11, 2020 (the “Effective Date”), Adamis and USWM entered into the USWM Agreement. The initial term for the USWM Agreement began on the Effective Date and continues for a period of 10 five year 10 The Company has determined that there are two performance obligations in the contract: (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 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 Revenues do not include any state or local taxes collected from customers on behalf of governmental authorities. The Company made the accounting policy election to continue to exclude these amounts from revenues. Revenue The Company outsources the manufacturing of the SYMJEPI and ZIMHI products 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 products SYMJEPI and ZIMHI are dependent on an exclusive distribution agreement with USWM. Product Recall As disclosed elsewhere in this Report, on March 21, 2022, we announced a voluntary recall of four lots of SYMJEPI (epinephrine) Injection 0.15 mg (0.15 mg/0.3 mL) and 0.3 mg (0.3 mg/0.3 mL) Pre-Filled Single-Dose Syringes to the consumer level, due to the potential clogging of the needle preventing the dispensing of epinephrine. USWM will handle the entire recall process for the Company, with Company oversight. SYMJEPI is manufactured and tested for us by Catalent Belgium S.A. The costs of the recall and the allocation of costs of the recall, including the costs to us resulting from the recall, were estimated at approximately $ 2 Our consolidated financial statements for the year ended December 31, 2021, included and reflect a reserve of approximately $ 2 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 March 31, 2022 and 2021, $ 25,000 25,000 825,000 850,000 Cost to Obtain a Contract The Company capitalizes incremental costs of obtaining a contract with a customer if the Company expects to recover those costs and that it would not have been incurred if the contract had not been obtained. The deferred costs, reported in the prepaid expenses and other current assets and other non-current assets on the Company’s Consolidated Balance Sheets, will be amortized over the economic benefit period of the contract. 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. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4: Inventories Inventories at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Work-in-Process — 386,610 Raw Materials 31,998 31,997 Total Inventories $ 31,998 $ 418,607 There was no reserve for obsolescence as of March 31, 2022 and December 31, 2021. |
Fixed Assets
Fixed Assets | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 5: Fixed Assets Fixed assets at March 31, 2022 and December 31, 2021 are summarized in the table below: Description Useful Life March 31, December 31, Machinery and Equipment 3 5 $ 4,519,382 $ 4,522,583 Less: Accumulated Depreciation (3,525,722) (3,181,567 ) Construction In Progress - Equipment 1,144,235 993,752 Fixed Assets, net $ 2,137,895 $ 2,334,768 For the three months ended March 31, 2022 and 2021, depreciation expense was approximately $ 344,000 328,000 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Leases | Note 6: Leases The Company has one 20 The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of March 31,2022 and December 31, 2021: Right-of Use Assets March 31, 2022 December 31, 2021 Operating Leases $ 568,537 $ 650,460 Lease Liabilities, Current March 31, 2022 December 31, 2021 Operating Leases $ 356,122 $ 349,871 Lease Liabilities, Non-Current Operating Leases 250,361 342,562 Total Lease Liabilities $ 606,483 $ 692,433 The amortizable lives of operating and financing leased assets are limited by the expected lease term. The Company’s lease generally does not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating 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 and the prevailing incremental borrowing rate thereafter. The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of March 31, 2022, and December 31, 2021, are: March 31, 2022 Operating Weighted Average Remaining Lease Term 1.67 Weighted Average Discount Rate 3.95 % December 31, 2021 Operating Weighted Average Remaining Lease Term 1.92 Weighted Average Discount Rate 3.95 % The table below reconciles the undiscounted future minimum lease payments Year Ending December 31, Operating Remainder of 2022 $ 278,444 2023 349,365 Undiscounted Future Minimum Lease Payments $ 627,809 Less: Difference between undiscounted lease payments and discounted lease liabilities 21,326 Total Lease Liabilities $ 606,483 Short-Term Lease Liabilities $ 356,122 Long-Term Lease Liabilities $ 250,361 Operating lease expense was approximately $ 88,000 136,000 Cash paid for amounts included in the measurement of operating lease liabilities were approximately $ 93,000 137,000 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
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 PPP Loan and Second Draw PPP Loan in its entirety and/or be subject to additional penalties, and has accrued $ 1,850,000 1,850,000 1,765,495 84,505 See Note 9 below for additional information concerning certain matters relating to the Second Draw PPP Loan. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 8: Fair Value Measurement 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. 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 1 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. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 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 March 31, 2022 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant Liability $ 90,268 $ — $ — $ 90,268 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 March 31, 2022 include the expected volatility of the Company’s stock of approximately 70 0.571 0.0 2.446 Fair Value Measurements at December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant Liability $ 99,655 $ — $ — $ 99,655 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 December 31, 2021 include the expected volatility of the Company’s stock of approximately 70 0.605 0.0 1.038 |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Note 9: Legal Matters We 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 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. Investigations 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 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 winding down USC’s business, and the employment of substantially all USC employees has ended. As a result, the Company is no longer 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. 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 as needed. Additionally, on March 16, 2022, the Company was informed that the Civil Division of the USAO (“Civil Division”) is investigating the Company’s Second Draw PPP Loan application and the company’s eligibility for the Second Draw PPP Loan. The Audit Committee of the Board engaged outside counsel to conduct an internal inquiry into the matter. The Company intends to continue cooperating with the USAO, SEC, and Civil Division. At this time, the Company is unable to predict the duration, scope, or outcome of the investigations by the USAO, SEC, Civil Division, or other agencies; what, if any, proceedings the USAO, SEC, Civil Division, or other federal or state authorities may initiate; what, if any, remedies or remedial measures the USAO, SEC, Civil Division 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, Civil Division, or other authorities, which may require further investigation. There can be no assurance that any discussions with the USAO, SEC or Civil Division 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. As disclosed at Note 7 in this Report, the Company could also be required to repay the full amount of the Second Draw PPP Loan. 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. As a result of the investigation by the Civil Division, the financial statements included in this Report recognize a $ 1,850,000 Nasdaq Compliance On December 31, 2021, we received a notice from the Nasdaq Listing Qualifications Department of The NASDAQ Capital Market (“Nasdaq”) informing us that because the closing bid price of our common stock had been below $ 1.00 30 1.00 30 180 1.00 10 180 1.00 10 180 180 180 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. In March 2022, plaintiff filed a motion for a temporary restraining order and for expedited proceedings, seeking an order enjoining the Company and its directors from (a) changing the number of members of the Company’s board of directors, (b) adding members to the Company’s board of directors, and/or (c) replacing any resigning members of the Company’s board of directors. The Company filed a response to the plaintiff’s motion. The Court held a hearing on March 28, 2022, and denied the plaintiff’s motion in full. On April 4, 2022, plaintiff filed a motion to amend the plaintiff’s complaint. The proposed amended Complaint adds additional allegations relating to the manner in which the defendants established and disclosed the date of the Company’s 2021 annual meeting of stockholders and to statements the defendants made about the plaintiff to the Company’s stockholders. On April 28, 2022, the Court granted the motion, noting that as a general rule, leave to amend is freely given. On April 25, 2022, plaintiff filed a motion for a preliminary injunction seeking to enjoin the Company from holdings its 2022 annual meeting of stockholders until the plaintiff’s Complaint is resolved. The Company opposed the motion, and on April 28, 2022, the Court denied the plaintiff’s motion. The case continues to proceed, 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. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2022 | |
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 | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation, Warrants and Shares Reserved | Note 11: Stock-based Compensation, Warrants and Shares Reserved The Company accounts for stock-based compensation transactions in which the Company receives employee services in exchange for restricted stock units (“RSUs”) or options to purchase common stock and the Company recognizes stock-based compensation cost as expense ratably on a straight-line basis over the requisite service period. Stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. Stock-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes option-pricing model. The Company accounts for forfeitures as they occur and will reduce compensation cost at the time of forfeiture. Cash-settled Stock Appreciation Rights provide for the cash payment of the excess of the fair market value of the Company’s common stock price on the date of exercise over the grant price. The fair value of the SARs is calculated during each reporting period and estimated using the Black-Scholes option pricing model. The SARs will vest over a period of three years 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, 2022, pursuant to the 2020 Equity Incentive Plan the number of shares reserved for the issuance of stock awards increased by 7,479,713 Stock Options The following table summarizes the outstanding stock option activity for the three months ended March 31, 2022: Non-Plan Awards: Non - Plan Awards Weighted Average Weighted Average Remaining Contract Life Total Outstanding Vested and Expected to Vest as of December 31, 2021 — $ — — Granted 130,000 0.62 — Options Canceled/Expired — — — Total Outstanding Vested and Expected to Vest as of March 31, 2022 130,000 0.62 9.88 Vested at March 31, 2022 25,000 0.62 9.88 2009 Equity Incentive Plan: 2009 Equity Weighted Average Weighted Average Remaining Contract Life Total Outstanding Vested and Expected to Vest as of December 31, 2021 4,985,415 $ 4.21 4.05 Options Canceled/Expired (199,273 ) 4.61 — Total Outstanding Vested and Expected to Vest as of March 31, 2022 4,786,142 4.19 3.97 Vested at March 31, 2022 4,781,209 4.19 3.97 Continuing operations expense related to stock options for the three months ended March 31, 2022 and 2021, was approximately $ 10,000 110,000 0 33,000 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 4,916,142 4,985,415 0 4,806,209 4,980,482 0 0 Restricted Stock Units The following table summarizes the RSUs outstanding at March 31, 2022: Number of Shares/Unit Weighted Non-vested RSUs as of December 31, 2021 1,039,003 $ 4.16 RSUs vested during the period (139,003 ) 3.09 RSUs forfeited during the period — — Non-vested RSUs as of March 31, 2022 900,000 $ 4.33 For the three months ended March 31, 2022 and 2021, continuing operations expense related to RSUs was approximately $ 362,000 737,000 no 784,000 1.72 Warrants The following table summarizes warrants outstanding at March 31, 2022 and at December 31, 2021: Warrant Shares Exercise Price Date Issued Expiration Date Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2022 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. ** As of March 31, 2022 and as of December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 90,268 99,655 respectively ** As of March 31, 2022 and as of December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $90,268 and $99,655 respectively. See Note 8. At March 31, 2022, the Company has reserved shares of common stock for issuance Warrants 14,202,824 Restricted Stock Units (“RSUs”) 900,000 2009 Equity Incentive Plan 4,916,142 Total Shares Reserved 20,018,966 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12: 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 years ended March 31, 2022 and 2021 were approximately $ 0 0 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources The Company’s cash and cash equivalents were $ 17,797,769 23,250,793 The Condensed consolidated financial statements were prepared under the assumption that the Company will continue our operations 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 will 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 and future 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 three months ended March 31, 2022, 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 and sales of prescription compounded formulations. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. In addition, a severe or prolonged economic downturn, political disruption or pandemic, such as the COVID-19 pandemic, could result in a variety of risks to our business, including our ability to raise capital when needed on acceptable terms, if at all. |
Basic and Diluted per Share | Basic and Diluted 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 three months ended March 31, 2022 and March 31, 2021, consist of outstanding equity classified warrants covering 14,202,824 15,095,238 4,916,142 6,431,796 900,000 2,034,260 |
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 March 31, 2022. 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 year ended March 31, 2022 and March 31, 2021. For additional information, see Note 2 - Discontinued Operations and Assets Held for Sale. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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) | 3 Months Ended |
Mar. 31, 2022 | |
DISCONTINUED OPERATIONS | |
The major assets and liabilities associated with discontinued operations included in our consolidated balance sheets are as follows (unaudited): | The major assets and liabilities associated with discontinued operations included in our consolidated balance sheets are as follows (unaudited): Carrying amounts of major classes of assets included as part of discontinued operations (unaudited): March 31, 2022 December 31, 2021 Cash and Cash Equivalents $ 23,629 $ 37,849 Accounts Receivable, net — 693 Inventories 12,000 12,000 Fixed Assets, net 4,189,648 6,799,090 Other assets 51,875 72,469 Loss recognized on classification as held for sale — (2,601,442 ) Total assets of the disposal group classified as held for sale in the statement of financial position $ 4,277,152 $ 4,320,659 Carrying amounts of major classes of liabilities included as part of discontinued operations Accounts Payable 623,670 681,646 Accrued Other Expenses 84,161 133,313 Lease Liabilities 370,020 412,357 Contingent Loss Liability 410,000 410,000 Deferred Tax Liability 45,930 45,930 Total liabilities of the disposal group classified as held for sale in the statement of financial position $ 1,533,781 $ 1,683,246 |
The revenues and expenses associated with discontinued operations included in our consolidated statements of operations were as follows (unaudited): | The revenues and expenses associated with discontinued operations included in our consolidated statements of operations were as follows (unaudited): Three-Months Ended March 31, 2022 2021 Major line items constituting pretax profit (loss) of discontinued operations REVENUE, net $ — $ 2,775,853 COST OF GOODS SOLD — (1,857,129 ) Gross Profit — 918,724 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (172,472 ) (2,401,422 ) RESEARCH AND DEVELOPMENT — (11,578 ) OTHER INCOME (EXPENSE) Interest Expense — (37,441 ) Interest Income 11 14,751 Gain from asset disposal 7,600 — Loss from discontinued operations before income taxes (164,861 ) (1,516,966 ) Income tax benefit — — Loss from discontinued operations after income taxes $ (164,861 ) $ (1,516,966 ) |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories at March 31, 2022 and December 31, 2021 consisted of the following: | Inventories at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Work-in-Process — 386,610 Raw Materials 31,998 31,997 Total Inventories $ 31,998 $ 418,607 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets at March 31, 2022 and December 31, 2021 are summarized in the table below: | Fixed assets at March 31, 2022 and December 31, 2021 are summarized in the table below: Description Useful Life March 31, December 31, Machinery and Equipment 3 5 $ 4,519,382 $ 4,522,583 Less: Accumulated Depreciation (3,525,722) (3,181,567 ) Construction In Progress - Equipment 1,144,235 993,752 Fixed Assets, net $ 2,137,895 $ 2,334,768 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of March 31,2022 and December 31, 2021: | The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of March 31,2022 and December 31, 2021: Right-of Use Assets March 31, 2022 December 31, 2021 Operating Leases $ 568,537 $ 650,460 Lease Liabilities, Current March 31, 2022 December 31, 2021 Operating Leases $ 356,122 $ 349,871 Lease Liabilities, Non-Current Operating Leases 250,361 342,562 Total Lease Liabilities $ 606,483 $ 692,433 |
The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of March 31, 2022, and December 31, 2021, are: | The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of March 31, 2022, and December 31, 2021, are: March 31, 2022 Operating Weighted Average Remaining Lease Term 1.67 Weighted Average Discount Rate 3.95 % December 31, 2021 Operating Weighted Average Remaining Lease Term 1.92 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 2022 $ 278,444 2023 349,365 Undiscounted Future Minimum Lease Payments $ 627,809 Less: Difference between undiscounted lease payments and discounted lease liabilities 21,326 Total Lease Liabilities $ 606,483 Short-Term Lease Liabilities $ 356,122 Long-Term Lease Liabilities $ 250,361 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant Liability $ 90,268 $ — $ — $ 90,268 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 March 31, 2022 include the expected volatility of the Company’s stock of approximately 70 0.571 0.0 2.446 Fair Value Measurements at December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant Liability $ 99,655 $ — $ — $ 99,655 |
Stock-based Compensation, War_2
Stock-based Compensation, Warrants and Shares Reserved (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
The following table summarizes the outstanding stock option activity for the three months ended March 31, 2022: | The following table summarizes the outstanding stock option activity for the three months ended March 31, 2022: Non-Plan Awards: Non - Plan Awards Weighted Average Weighted Average Remaining Contract Life Total Outstanding Vested and Expected to Vest as of December 31, 2021 — $ — — Granted 130,000 0.62 — Options Canceled/Expired — — — Total Outstanding Vested and Expected to Vest as of March 31, 2022 130,000 0.62 9.88 Vested at March 31, 2022 25,000 0.62 9.88 2009 Equity Incentive Plan: 2009 Equity Weighted Average Weighted Average Remaining Contract Life Total Outstanding Vested and Expected to Vest as of December 31, 2021 4,985,415 $ 4.21 4.05 Options Canceled/Expired (199,273 ) 4.61 — Total Outstanding Vested and Expected to Vest as of March 31, 2022 4,786,142 4.19 3.97 Vested at March 31, 2022 4,781,209 4.19 3.97 |
The following table summarizes the RSUs outstanding at March 31, 2022: | The following table summarizes the RSUs outstanding at March 31, 2022: Number of Shares/Unit Weighted Non-vested RSUs as of December 31, 2021 1,039,003 $ 4.16 RSUs vested during the period (139,003 ) 3.09 RSUs forfeited during the period — — Non-vested RSUs as of March 31, 2022 900,000 $ 4.33 |
The following table summarizes warrants outstanding at March 31, 2022 and at December 31, 2021: | The following table summarizes warrants outstanding at March 31, 2022 and at December 31, 2021: Warrant Shares Exercise Price Date Issued Expiration Date Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2022 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. ** As of March 31, 2022 and as of December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 90,268 99,655 respectively ** As of March 31, 2022 and as of December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $90,268 and $99,655 respectively. See Note 8. |
At March 31, 2022, the Company has reserved shares of common stock for issuance | At March 31, 2022, the Company has reserved shares of common stock for issuance Warrants 14,202,824 Restricted Stock Units (“RSUs”) 900,000 2009 Equity Incentive Plan 4,916,142 Total Shares Reserved 20,018,966 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash and cash equivalents | $ 17,797,769 | $ 57,630,629 | $ 23,250,793 | $ 6,855,355 |
Warrant [Member] | ||||
Potential dilutive securities, excluded from computation of earnings | 14,202,824 | 15,095,238 | ||
Share-based Payment Arrangement, Option [Member] | ||||
Potential dilutive securities, excluded from computation of earnings | 4,916,142 | 6,431,796 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Potential dilutive securities, excluded from computation of earnings | 900,000 | 2,034,260 |
The major assets and liabilitie
The major assets and liabilities associated with discontinued operations included in our consolidated balance sheets are as follows (unaudited): (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying amounts of major classes of assets included as part of discontinued operations: | ||
Cash and Cash Equivalents | $ 23,629 | $ 37,849 |
Accounts Receivable, net | 693 | |
Inventories | 12,000 | 12,000 |
Fixed Assets, net | 4,189,648 | 6,799,090 |
Other assets | 51,875 | 72,469 |
Loss recognized on classification as held for sale | (2,601,442) | |
Total assets of the disposal group classified as held for sale in the statement of financial position | 4,277,152 | 4,320,659 |
Carrying amounts of major classes of liabilities included as part of discontinued operations | ||
Accounts Payable | 623,670 | 681,646 |
Accrued Other Expenses | 84,161 | 133,313 |
Lease Liabilities | 370,020 | 412,357 |
Contingent Loss Liability | 410,000 | 410,000 |
Deferred Tax Liability | 45,930 | 45,930 |
Total liabilities of the disposal group classified as held for sale in the statement of financial position | $ 1,533,781 | $ 1,683,246 |
The revenues and expenses assoc
The revenues and expenses associated with discontinued operations included in our consolidated statements of operations were as follows (unaudited): (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Major line items constituting pretax profit (loss) of discontinued operations | ||
REVENUE, net | $ 2,775,853 | |
COST OF GOODS SOLD | (1,857,129) | |
Gross Profit | 918,724 | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | (172,472) | (2,401,422) |
RESEARCH AND DEVELOPMENT | (11,578) | |
OTHER INCOME (EXPENSE) | ||
Interest Expense | (37,441) | |
Interest Income | 11 | 14,751 |
Gain from asset disposal | 7,600 | |
Loss from discontinued operations before income taxes | (164,861) | (1,516,966) |
Income tax benefit | ||
Loss from discontinued operations after income taxes | $ (164,861) | $ (1,516,966) |
Discontinued Operations and A_3
Discontinued Operations and Assets Held for Sale (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2021USD ($) | Mar. 31, 2022USD ($)Lease | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale | $ 7,600 | |||
Financial advisor fee payable | $ 700,000 | |||
Lease liabilities | 370,020 | 412,357 | ||
Contingent Loss Liability | 410,000 | 410,000 | ||
Accounts Payable | 623,670 | 681,646 | ||
Employee Severance [Member] | Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restructuring Charges | 920,000 | |||
Contract Termination [Member] | Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restructuring Charges | 410,000 | |||
Contingent Loss Liability | 410,000 | 410,000 | ||
Chemical Destruction Costs [Member] | Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restructuring Charges | 422,000 | |||
Accounts Payable | $ 3,000 | 3,000 | ||
USC [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Percentage of variable consideration receivable | 20.00% | |||
Standard payment terms | The standard payment terms are 2%/10 and Net 30 | |||
Number of operating leases | Lease | 2 | |||
Impairment of right-of-use assets | 448,000 | |||
Lease liabilities | $ 370,000 | 412,000 | ||
Debt payment frequency | monthly | |||
Debt payment amount | $ 19,000 | |||
Building loan | $ 0 | $ 0 | ||
Interest rate | 6.00% | |||
Interest expense | $ 0 | $ 37,000 | ||
USC [Member] | Minimum [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Remaining lease term | 1 year | |||
USC [Member] | Maximum [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Remaining lease term | 4 years | |||
USC [Member] | Office Space [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of operating leases | Lease | 1 | |||
USC [Member] | Office Equipment [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of operating leases | Lease | 1 | |||
USC [Member] | Building [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Monthly base rent | $ 10,824 | |||
Lease expiration date | Dec. 31, 2023 | |||
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 | |||
Change in variable consideration | $ 440,000 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | May 11, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Recall expense | $ 2,000,000 | |||
Product Recall Liability | 2,000,000 | $ 2,000,000 | ||
Revenues recognized previously reported as deferred revenue | $ 25,000 | $ 25,000 | ||
USWM Agreement [Member] | ||||
Milestone payments | $ 26,000,000 | |||
Term of agreement | 10 years | |||
Agreements renewal terms | 5 years | |||
Estimated customer life | 10 years | |||
Sandoz Agreement [Member] | Sandoz [Member] | ||||
Deferred revenue | $ 825,000 | $ 850,000 |
Inventories at March 31, 2022 a
Inventories at March 31, 2022 and December 31, 2021 consisted of the following: (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Work-in-Process | $ 386,610 | |
Raw Materials | 31,998 | 31,997 |
Total Inventories | $ 31,998 | $ 418,607 |
Fixed assets at March 31, 2022
Fixed assets at March 31, 2022 and December 31, 2021 are summarized in the table below: (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Machinery and Equipment | $ 4,519,382 | $ 4,522,583 |
Less: Accumulated Depreciation | (3,525,722) | (3,181,567) |
Construction In Progress - Equipment | 1,144,235 | 993,752 |
Fixed Assets, net | $ 2,137,895 | $ 2,334,768 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful lives | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful lives | 5 years |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 344,000 | $ 328,000 |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended | |
Mar. 31, 2022USD ($)Lease | Mar. 31, 2021USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 88,000 | $ 136,000 |
Cash paid operating lease | $ 93,000 | $ 137,000 |
Office [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Number of operating leases | Lease | 1 | |
Lease remaining lease term | 20 months |
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 March 31,2022 and December 31, 2021: (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Right-of Use Assets | ||
Operating Leases | $ 568,537 | $ 650,460 |
Lease Liabilities, Current | ||
Operating Leases | 356,122 | 349,871 |
Lease Liabilities, Non-Current | ||
Operating Leases | 250,361 | 342,562 |
Total Lease Liabilities | $ 606,483 | $ 692,433 |
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 March 31, 2022, and December 31, 2021, are: (Details) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Weighted average remaining lease term | 1 year 8 months 1 day | 1 year 11 months 1 day |
Weighted average discount rate | 3.95% | 3.95% |
The table below reconciles the
The table below reconciles the undiscounted future minimum lease payments (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Remainder of 2022 | $ 278,444 | |
2023 | 349,365 | |
Undiscounted Future Minimum Lease Payments | 627,809 | |
Less: Difference between undiscounted lease payments and discounted lease liabilities | 21,326 | |
Total Lease Liabilities | 606,483 | $ 692,433 |
Short-Term Lease Liabilities | 356,122 | 349,871 |
Long-Term Lease Liabilities | $ 250,361 | $ 342,562 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Apr. 13, 2020 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 28, 2021 | Aug. 05, 2021 | Mar. 15, 2021 |
Debt Instrument [Line Items] | ||||||
Contingent loss liability | $ 1,850,000 | |||||
First Draw PPP Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt amount | $ 0 | |||||
Second Draw PPP Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt amount | $ 0 | |||||
Contingent loss liability | $ 1,850,000 | |||||
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% | |||||
Original amount of loan | $ 1,765,495 | |||||
Interest and bank fees | $ 84,505 |
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 ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2020 Warrant Liability | $ 90,268 | $ 99,655 |
Fair Value, Recurring [Member] | 2020 Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2020 Warrant Liability | 90,268 | 99,655 |
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] | ||
2020 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] | ||
2020 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] | ||
2020 Warrant Liability | $ 90,268 | $ 99,655 |
Fair Value Measurement (Details
Fair Value Measurement (Details Narrative) | Mar. 31, 2022$ / shares | Dec. 31, 2021$ / shares |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.70 | 0.70 |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability measurement input | 0.571 | 0.605 |
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 | 0.02446 | 0.01038 |
Legal Matters (Details Narrativ
Legal Matters (Details Narrative) | Dec. 31, 2021USD ($)d$ / shares | Mar. 31, 2022USD ($) |
Short-term Debt [Line Items] | ||
Contingent loss liability | $ | $ 1,850,000 | |
Minimum bid price per share requirement | $ / shares | $ 1 | |
Consecutive business days of noncompliance with rule | d | 30 | |
Period of calendar days to regain compliance | 180 days | |
Consecutive business days for compliance with rule | d | 10 | |
Additional period of calendar days to regain compliance | 180 days | |
Second Draw PPP Loan [Member] | ||
Short-term Debt [Line Items] | ||
Contingent loss liability | $ | $ 1,850,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Feb. 02, 2021 | Mar. 31, 2022 | Mar. 31, 2021 |
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 | |
Underwriting discounts and commissions | $ 3,300,000 | $ 3,330,752 | |
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 outstanding stock option activity for the three months ended March 31, 2022: (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Non Plan Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total outstanding and vested and expected to vest at beginning | shares | |
Options outstanding, weighted average exercise price, beginning | $ / shares | |
Options granted | shares | 130,000 |
Options granted, weighted average exercise price | $ / shares | $ 0.62 |
Options canceled/expired | shares | |
Options canceled/expired, weighted average exercise price | $ / shares | |
Total outstanding and vested and expected to vest at ending | shares | 130,000 |
Options outstanding, weighted average exercise price, ending balance | $ / shares | $ 0.62 |
Options outstanding, weighted average remaining contractual term at ending | 9 years 10 months 17 days |
Vested at ending | shares | 25,000 |
Options vested, weighted average exercise price at ending | $ / shares | $ 0.62 |
Options vested, weighted average remaining contractual term | 9 years 10 months 17 days |
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 | shares | 4,985,415 |
Options outstanding, weighted average exercise price, beginning | $ / shares | $ 4.21 |
Options outstanding, weighted average remaining contractual term at beginning | 4 years 18 days |
Options canceled/expired | shares | (199,273) |
Options canceled/expired, weighted average exercise price | $ / shares | $ 4.61 |
Total outstanding and vested and expected to vest at ending | shares | 4,786,142 |
Options outstanding, weighted average exercise price, ending balance | $ / shares | $ 4.19 |
Options outstanding, weighted average remaining contractual term at ending | 3 years 11 months 19 days |
Vested at ending | shares | 4,781,209 |
Options vested, weighted average exercise price at ending | $ / shares | $ 4.19 |
Options vested, weighted average remaining contractual term | 3 years 11 months 19 days |
The following table summarize_2
The following table summarizes the RSUs outstanding at March 31, 2022: (Details) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested RSUs, beginning | shares | 1,039,003 |
Weighted average grant date fair value, beginning | $ / shares | $ 4.16 |
RSUs vested during the period | shares | (139,003) |
Weighted average grant date fair value, vested | $ / shares | $ 3.09 |
RSUs forfeited during the period | shares | |
Weighted average grant date fair value, forfeited | $ / shares | |
Non-vested RSUs, ending | shares | 900,000 |
Weighted average grant date fair value, ending | $ / shares | $ 4.33 |
The following table summarize_3
The following table summarizes warrants outstanding at March 31, 2022 and at December 31, 2021: (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | ||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 14,202,824 | 14,202,824 | |
2020 Warrant Liability | $ 90,268 | $ 99,655 | |
Old Adamis Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 58,824 | 58,824 | |
Warrant exercise price (in dollars per share) | $ 8.50 | $ 8.50 | |
Date issued | Nov. 15, 2007 | Nov. 15, 2007 | |
Expiration date | Nov. 15, 2022 | Nov. 15, 2022 | |
2019 Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 13,794,000 | 13,794,000 | |
Warrant 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 | |
2020 Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | [1] | 350,000 | 350,000 |
Warrant exercise price (in dollars per share) | $ 0.70 | $ 0.70 | |
Date issued | [2] | Feb. 25, 2020 | Feb. 25, 2020 |
Expiration date | Sep. 3, 2025 | Sep. 3, 2025 | |
[1] | As of March 31, 2022 and as of December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $90,268 and $99,655 respectively. See Note 8. | ||
[2] | On September 3, 2020, the Company’s stockholders approved an increase in the number of authorized shares of common stock sufficient to permit exercise in full of all the 2020 warrants, and as a result, the warrants are exercisable effective September 3, 2020. |
At March 31, 2022, the Company
At March 31, 2022, the Company has reserved shares of common stock for issuance (Details) | Mar. 31, 2022shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 20,018,966 |
2009 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 4,916,142 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 14,202,824 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 900,000 |
Stock-based Compensation, War_3
Stock-based Compensation, Warrants and Shares Reserved (Details Narrative) | Jan. 02, 2022shares | Mar. 31, 2022USD ($)d$ / sharesshares | Mar. 31, 2021USD ($) | Dec. 31, 2020shares | Dec. 31, 2021USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | $ 372,118 | $ 879,774 | |||
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 | ||||
Increase in shares reserved for issuance | shares | 7,479,713 | ||||
Stock Appreciation Rights (SARs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Share-based Payment Arrangement, Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of stock options outstanding | shares | 4,916,142 | 4,985,415 | |||
Stock options outstanding aggregate intrinsic value | $ 0 | $ 0 | |||
Number of stock options exercisable | shares | 4,806,209 | 4,980,482 | |||
Stock options exercisable aggregate intrinsic value | $ 0 | $ 0 | |||
Share-based Payment Arrangement, Option [Member] | Continuing Operations [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | 10,000 | 110,000 | |||
Share-based Payment Arrangement, Option [Member] | Discontinued Operations [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | 0 | 33,000 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock compensation | $ 784,000 | ||||
Period for recognition | 1 year 8 months 19 days | ||||
Restricted Stock Units (RSUs) [Member] | Continuing Operations [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | $ 362,000 | 737,000 | |||
Restricted Stock Units (RSUs) [Member] | Discontinued Operations [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expenses | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Maintenance fees | $ 0 | $ 0 |