Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
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 | 149,983,265 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 8,875,925 | $ 23,220,770 |
Restricted Cash | 30,045 | 30,023 |
Accounts Receivable, net | 815,565 | |
Receivable from Fagron | 956,066 | 5,084,452 |
Inventories | 440,198 | 418,607 |
Prepaid Expenses and Other Current Assets | 795,839 | 1,313,546 |
Current Assets of Discontinued Operations, Note 2 | 4,222,542 | 4,320,659 |
Total Current Assets | 15,320,615 | 35,203,622 |
LONG TERM ASSETS | ||
Fixed Assets, net | 1,835,885 | 2,334,768 |
Right-of-Use Assets | 485,761 | 650,460 |
Other Non-Current Assets | 52,174 | 109,137 |
Total Assets | 17,694,435 | 38,297,987 |
CURRENT LIABILITIES | ||
Accounts Payable | 4,516,722 | 3,754,010 |
Deferred Revenue, current portion | 100,000 | 100,000 |
Accrued Other Expenses | 2,145,386 | 2,800,241 |
Accrued Bonuses | 529,928 | 535,624 |
Product Recall Liability | 601,480 | 2,000,000 |
Lease Liabilities, Current Portion | 362,434 | 349,871 |
Current Liabilities of Discontinued Operations, Note 2 | 1,468,368 | 1,683,246 |
Total Current Liabilities | 9,724,318 | 11,222,992 |
LONG TERM LIABILITIES | ||
Deferred Revenue, net of current portion | 700,000 | 750,000 |
Lease Liabilities, net of current portion | 157,246 | 342,562 |
Warrant Liabilities, at fair value | 70,728 | 99,655 |
Total Liabilities | 10,652,292 | 12,415,209 |
STOCKHOLDERS’ EQUITY | ||
Preferred Stock - Par Value $0.0001; 10,000,000 Shares Authorized; no shares Issued and Outstanding at June 30, 2022 (Unaudited) and December 31, 2021, respectively. | ||
Common Stock - Par Value $.0001; 200,000,000 Shares Authorized; 150,506,222 and 150,117,219 Issued, 149,983,265 and 149,594,262 Outstanding at June 30, 2022 (Unaudited) and December 31, 2021, respectively | 15,051 | 15,012 |
Additional Paid-in Capital | 303,869,991 | 303,958,829 |
Accumulated Deficit | (296,837,649) | (278,085,813) |
Treasury Stock - 522,957 Shares, at cost | (5,250) | (5,250) |
Total Stockholders’ Equity | 7,042,143 | 25,882,778 |
Total Liabilities and Stockholders’ Equity | $ 17,694,435 | $ 38,297,987 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 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, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 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 | 150,506,222 | 150,117,219 |
Common stock, outstanding | 149,983,265 | 149,594,262 |
Treasury Stock, Shares | 522,957 | 522,957 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
REVENUE, net | $ 39,847 | $ 1,275,474 | $ 1,194,361 | $ 2,608,153 |
COST OF GOODS SOLD | 689,178 | 1,796,243 | 2,152,760 | 3,641,480 |
Gross Loss | (649,331) | (520,769) | (958,399) | (1,033,327) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 4,205,934 | 4,934,491 | 7,588,630 | 8,452,542 |
RESEARCH AND DEVELOPMENT | 3,320,654 | 2,196,721 | 7,542,179 | 4,446,465 |
Loss from Operations | (8,175,919) | (7,651,981) | (16,089,208) | (13,932,334) |
OTHER INCOME (EXPENSE) | ||||
Interest Income | 16,174 | 1,900 | 20,322 | 3,351 |
Interest Expense | (2,900) | (4,784) | ||
Other Expense | (257,832) | (697,832) | ||
Gain/(Loss) on PPP2 loan | 62,583 | (1,787,417) | ||
Change in Fair Value of Warrants | 19,540 | (43,574) | 28,927 | (7,685,474) |
Total Other Income (Expense), net | (159,535) | (44,574) | (2,436,000) | (7,686,907) |
Net Loss from Continuing Operations | (8,335,454) | (7,696,555) | (18,525,208) | (21,619,241) |
DISCONTINUED OPERATIONS | ||||
Net Loss from Discontinued Operations before Income Taxes | (61,767) | (1,617,175) | (226,628) | (3,073,723) |
Income Taxes - Discontinued Operations | ||||
Net Loss from Discontinued Operations | (61,767) | (1,617,175) | (226,628) | (3,073,723) |
Net Loss Applicable to Common Stock | $ (8,397,221) | $ (9,313,730) | $ (18,751,836) | $ (24,692,964) |
Basic and Diluted Loss Per Share: | ||||
Continuing Operations, Basic (Loss) Per Share | $ (0.06) | $ (0.05) | $ (0.13) | $ (0.16) |
Continuing Operations, Diluted (Loss) Per Share | (0.06) | (0.05) | (0.13) | (0.16) |
Discontinued Operations, Basic (Loss) Per Share | (0.01) | (0.02) | ||
Discontinued Operations, Diluted (Loss) Per Share | (0.01) | (0.02) | ||
Basic Loss Per Share | (0.06) | (0.06) | (0.13) | (0.18) |
Diluted Loss Per Share | $ (0.06) | $ (0.06) | $ (0.13) | $ (0.18) |
Basic Weighted Average Shares Outstanding | 149,815,683 | 148,886,141 | 149,717,104 | 139,228,658 |
Diluted Weighted Average Shares Outstanding | 149,815,683 | 148,886,141 | 149,717,104 | 139,228,658 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 9,437 | $ 238,234,968 | $ (5,250) | $ (232,257,615) | $ 5,981,540 | |
Beginning balance (in 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 Common Stock upon Vesting of Restricted Stock Units (RSUs) | $ 7 | (7) | ||||
Issuance of Common Stock upon Vesting of Restricted Stock Units (RSUs) (in shares) | 66,462 | |||||
Stock Based Compensation | 1,677,841 | 1,677,841 | ||||
Net Loss | (24,692,964) | (24,692,964) | ||||
Ending balance, value at Jun. 30, 2021 | $ 14,941 | 303,620,101 | $ (5,250) | (256,950,579) | 46,679,213 | |
Ending balance (in shares) at Jun. 30, 2021 | 149,409,098 | 522,957 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 14,941 | 302,822,034 | $ (5,250) | (247,636,849) | 55,194,876 | |
Beginning balance (in shares) at Mar. 31, 2021 | 149,409,098 | 522,957 | ||||
Stock Based Compensation | 798,067 | 798,067 | ||||
Net Loss | (9,313,730) | (9,313,730) | ||||
Ending balance, value at Jun. 30, 2021 | $ 14,941 | 303,620,101 | $ (5,250) | (256,950,579) | 46,679,213 | |
Ending balance (in shares) at Jun. 30, 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 (in shares) at Dec. 31, 2021 | 150,117,219 | 522,957 | ||||
Issuance of Common Stock upon Vesting of Restricted Stock Units (RSUs) | $ 39 | (39) | ||||
Issuance of Common Stock upon Vesting of Restricted Stock Units (RSUs) (in shares) | 389,003 | |||||
Stock Based Compensation | (88,799) | (88,799) | ||||
Net Loss | (18,751,836) | (18,751,836) | ||||
Ending balance, value at Jun. 30, 2022 | $ 15,051 | 303,869,991 | $ (5,250) | (296,837,649) | 7,042,143 | |
Ending balance (in shares) at Jun. 30, 2022 | 150,506,222 | 522,957 | ||||
Beginning balance, value at Mar. 31, 2022 | $ 15,026 | 304,330,933 | $ (5,250) | (288,440,428) | 15,900,281 | |
Beginning balance (in shares) at Mar. 31, 2022 | 150,256,222 | 522,957 | ||||
Issuance of Common Stock upon Vesting of Restricted Stock Units (RSUs) | $ 25 | (25) | ||||
Issuance of Common Stock upon Vesting of Restricted Stock Units (RSUs) (in shares) | 250,000 | |||||
Stock Based Compensation | (460,917) | (460,917) | ||||
Net Loss | (8,397,221) | (8,397,221) | ||||
Ending balance, value at Jun. 30, 2022 | $ 15,051 | $ 303,869,991 | $ (5,250) | $ (296,837,649) | $ 7,042,143 | |
Ending balance (in shares) at Jun. 30, 2022 | 150,506,222 | 522,957 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) | 6 Months Ended |
Jun. 30, 2021 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Common Stock Issued, issuance costs | $ 3,330,752 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | 18 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net Loss | $ (8,397,221) | $ (9,313,730) | $ (18,751,836) | $ (24,692,964) | |
Less: Loss from Discontinued Operations | 61,767 | 1,617,175 | 226,628 | 3,073,723 | |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | |||||
Stock Based Compensation | (88,799) | 1,677,841 | |||
Provision for Excess and Obsolete Inventory | (29,003) | 414,048 | |||
Change in Fair Value of Warrant Liability | (19,540) | 43,574 | (28,927) | 7,685,474 | |
Cash Payments in Excess of Lease Expense | (8,054) | (2,665) | |||
Depreciation Expense | 368,000 | 369,000 | 712,510 | 696,867 | |
Gain on Repayment of PPP2 Loan Contingent Loss Liability | 62,583 | ||||
Change in Operating Assets and Liabilities: | |||||
Accounts Receivable | 815,565 | (265,870) | |||
Receivable from Fagron | 1,197,832 | ||||
Inventories | 7,412 | 27,665 | |||
Prepaid Expenses and Other Current & Non-Current Assets | 574,670 | (510,795) | |||
Accounts Payable | 532,465 | 9,917 | |||
Product Recall Liability | (1,398,520) | ||||
PPP2 Loan Contingent Loss Liability Payment | (1,850,000) | ||||
PPP2 Loan Contingent Loss Liability | 1,787,417 | ||||
Contingent Loss Liability | (7,900,000) | ||||
Deferred Revenue | (50,000) | (50,000) | |||
Accrued Other Expenses and Bonuses | (262,764) | 931,666 | |||
Net Cash Used in Operating Activities of Continuing Operations | (16,550,821) | (18,905,093) | |||
Net Cash Used in Operating Activities in Discontinued Operations | (329,564) | (2,439,869) | |||
Net Cash Used in Operating Activities | (16,880,385) | (21,344,962) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Purchase of Equipment | (381,167) | (847,141) | |||
Proceeds from Receivable from Fagron | 2,930,554 | ||||
Net Cash Provided by (Used in) Investing Activities of Continuing Operations | 2,549,387 | (847,141) | |||
Net Cash Provided by (Used in) Investing Activities of Discontinued Operations | (689) | ||||
Net Cash Provided by (Used in) Investing Activities | 2,549,387 | (847,830) | |||
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 Provided by Financing Activities of Discontinued Operations | (50,650) | ||||
Net Cash Provided by Financing Activities | 55,985,991 | ||||
(Decrease) Increase in Cash and Cash Equivalents and Restricted Cash | (14,330,998) | 33,793,199 | |||
Cash and Cash Equivalents and Restricted Cash: | |||||
Beginning Balance | 23,250,793 | 6,855,355 | $ 6,855,355 | ||
Decrease in Cash and Restricted Cash from Discontinued Operations | (13,825) | (313,116) | |||
Total Cash & Cash Equivalents and Restricted Cash | 8,905,970 | 40,335,438 | 8,905,970 | 40,335,438 | 8,905,970 |
RECONCILIATION OF CASH & CASH EQUIVALENTS AND RESTRICTED CASH | |||||
Cash & Cash Equivalents | 8,875,925 | 40,305,438 | 8,875,925 | 40,305,438 | 8,875,925 |
Restricted Cash | $ 30,045 | $ 30,000 | 30,045 | 30,000 | $ 30,045 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||
Cash Paid for Income Taxes | 3,625 | 4,100 | |||
Cash Paid for Interest | 62,088 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES | |||||
Increase in Accrued Capital Expenditures | $ 167,540 | $ (36,707) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 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 three and six months ended June 30, 2022 and June 30, 2021, and year ended December 31, 2021, the assets, liabilities, operations, 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 three month and six months ended June 30, 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. Going Concern The Company’s cash and cash equivalents were $ 8,875,925 23,220,770 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 six months ended June 30, 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. 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 Loss per Share The Company computes basic loss per share by dividing the loss attributable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The diluted loss per share calculation is based on the treasury stock method and gives effect to dilutive options, warrants and other potential dilutive common stock. The effect of common stock equivalents was anti-dilutive and was excluded from the calculation of weighted average shares outstanding. Potential dilutive securities, which are not included in diluted weighted average shares outstanding for the six months ended June 30, 2022 and June 30, 2021, consist of outstanding equity classified warrants covering 14,202,824 15,095,238 4,861,142 6,113,866 650,000 2,034,260 Discontinued Operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations 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 | 6 Months Ended |
Jun. 30, 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 1,856,000 440,000 758,000 1.2 million 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. The Company disposed of a component of its business in August 2021 and met the definition of a discontinued operation as of September 30, 2021. Accordingly, the operating results of the business disposed are reported as loss from discontinued operations in the accompany unaudited condensed statements of operations for the three months and six months ended June 30, 2022 and 2021. As of December 31, 2021, the Company had shut down the operations of USC, terminated all of USC’s employees and was engaged in the process of selling or attempting to sell or otherwise dispose of USC’s remaining assets. 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): June 30, 2022 December 31, 2021 Cash and Cash Equivalents $ 24,024 $ 37,849 Accounts Receivable, net — 693 Inventories — 12,000 Fixed Assets, net 6,791,090 6,799,090 Other assets 8,870 72,469 Loss recognized on classification as held for sale (2,601,442 ) (2,601,442 ) Total assets of the disposal group classified as held for sale in the statement of financial position $ 4,222,542 $ 4,320,659 Carrying amounts of major classes of liabilities included as part of discontinued operations Accounts Payable $ 630,819 $ 681,646 Accrued Other Expenses 53,936 133,313 Lease Liabilities 327,683 412,357 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 $ 1,468,368 $ 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 June 30, 2022 2021 Major line items constituting pretax profit (loss) of discontinued operations REVENUE, net $ — $ 2,735,830 COST OF GOODS SOLD — (2,074,390 ) Gross Profit — 661,440 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (91,911 ) (2,197,153 ) RESEARCH AND DEVELOPMENT — (36,055 ) IMPAIRMENT OF LONG LIVED ASSETS — (9,347 ) OTHER INCOME (EXPENSE) Interest Expense — (42,047 ) Other Income 8,614 5,987 Gain from asset disposal 21,530 — Loss from discontinued operations before income taxes (61,767 ) (1,617,175 ) Income tax benefit — — Loss from discontinued operations after income taxes $ (61,767 ) $ (1,617,175 ) Six Months Ended June 30, 2022 2021 Major line items constituting pretax profit (loss) of discontinued operations REVENUE, net $ — $ 5,511,683 COST OF GOODS SOLD — (3,871,100 ) Gross Profit — 1,640,583 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (264,383 ) (4,598,575 ) RESEARCH AND DEVELOPMENT — (47,634 ) IMPAIRMENT OF LONG LIVED ASSETS — (9,347 ) OTHER INCOME (EXPENSE) Interest Expense — (79,488 ) Other Income 8,625 20,738 Gain from asset disposal 29,130 — Loss from discontinued operations before income taxes (226,628 ) (3,073,723 ) Income tax benefit — — Loss from discontinued operations after income taxes $ (226,628 ) $ (3,073,723 ) 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 $ 448,000 328,000 412,000 Discontinued Operations - Restructuring Costs As of June 30, 2022, and December 31, 2021, the outstanding liabilities related to the contract termination costs recorded in contingent loss liability of discontinued operations was approximately $ 410,000 0 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. The loan bore an interest of 6.00% 0 30,000 0 61,000 |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 3: Revenues Revenue Recognition 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 included, 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 ® ™ On May 11, 2020 (the “Effective Date”) the Company 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 (naloxone HCI Injection, USP) 5mg/0.5mL product intended for the emergency treatment of opioid overdose. The Company’s revenues relating to its FDA approved products SYMJEPI and ZIMHI are dependent on the USWM Agreement. 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 a Distribution and Commercialization Agreement previously entered into with Sandoz Inc., 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 million, if the milestones are achieved. There can be no assurances that any of these milestones will be met or that any milestone payments will be paid to the Company. The Company retains rights to the intellectual property subject to the USWM Agreement and to commercialize both products outside of the Territory. In addition, the Company may continue to use the licensed intellectual property (excluding certain of the licensed trademarks) to develop and commercialize other products (with certain exceptions), including products that utilize the Company’s Symject™ syringe product platform. 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 and the exclusive distribution and commercialization in the United States of SYMJEPI and ZIMHI products to USWM; and (ii) material rights related to future sales of SYMJEPI and ZIMHI. As the optional future sales of SYMJEPI and ZIMHI reflect a significant or incremental discount, they are material rights, and are accounted for as performance obligations. We allocate the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that USWM will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. Revenues from product sales are recognized at a point in time upon delivery to USWM. Variable consideration from product sales is allocated directly to the products being sold. Under the USWM Agreement, the Company is entitled to receive various amounts and milestone payments, including regulatory milestone payments; net-profit sharing payments based on certain percentages of net profit generated from the sale of products over a given quarter; and commercial milestone payments. Payments from regulatory milestone payments were excluded from the transaction price as the Company utilizes the most likely amount method to estimate variable consideration. The amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. 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. Product Recall 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 $ 2.0 For the period ended June 30, 2022 and December 31, 2021, a liability of approximately $ 0.6 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 June 30, 2022 and 2021, $ 25,000 25,000 50,000 50,000 800,000 850,000 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 | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4: Inventories Inventories at June 30, 2022 and December 31, 2021 consisted of the following June 30, 2022 December 31, 2021 Finished Goods $ — $ — Work-in-Process — 386,610 Raw Materials 440,198 31,997 Inventories $ 440,198 418,607 Reserve for obsolescence as of June 30, 2022 and December 31, 2021 was approximately $ 0 0 |
Fixed Assets, net
Fixed Assets, net | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets, net | Note 5: Fixed Assets, net Fixed assets at June 30, 2022 and December 31, 2021 are summarized in the table below Description Useful Life June 30, 2022 December 31, 2021 Machinery and Equipment 3 5 $ 5,079,972 $ 4,522,583 Less: Accumulated Depreciation (3,894,077 ) (3,181,567 ) Construction In Progress - Equipment 649,990 993,752 Fixed Assets, net $ 1,835,885 $ 2,334,768 Depreciation expense for the three months ended June 30, 2022 and 2021 was approximately $ 368,000 369,000 713,000 697,000 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | Note 6: Leases The Company has one 17 The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of June 30, 2022, and December 31, 2021: Right-of Use Assets June 30, 2022 December 31, 2021 Operating Lease $ 485,761 $ 650,460 Lease Liabilities, Current Portion June 30, 2022 December 31, 2021 Operating Lease $ 362,434 $ 349,871 Lease Liabilities, net of current portion Operating Lease 157,246 342,562 Total Lease Liabilities $ 519,680 $ 692,433 The amortizable lives of operating assets are limited by the expected lease term. The Company’s lease does not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating and financing lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for leases that commenced prior to that date. The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of June 30, 2022 and December 31, 2021 were: June 30, 2022 Operating Weighted Average Remaining Lease Term 1.42 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 $ 185,937 2023 349,365 Undiscounted Future Minimum Lease Payments 535,302 Less: Difference between undiscounted lease payments and discounted lease liabilities 15,622 Total Lease Liabilities $ 519,680 Short-Term Lease Liabilities $ 362,434 Long-Term Lease Liabilities $ 157,246 Operating lease expense for the three months ended June 30,2022 and 2021 was approximately $ 88,000 88,000 177,000 177,000 Cash paid for amounts included in the measurement of operating lease liabilities were approximately $ 93,000 90,000 185,000 180,000 |
Debt
Debt | 6 Months Ended |
Jun. 30, 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 1,850,000 1,787,417 Even though the PPP Loan has been forgiven and the Second Draw PPP Loan repaid, 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 the Company were to be audited or reviewed and receive an adverse determination or finding in such audit or review, including a determination that the Company was ineligible to receive the applicable loan, the Company could be required to return or repay the full amount of the applicable loan and could be subject to additional fines or penalties, which could reduce the Company's liquidity and adversely affect our business, financial condition and results of operations. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 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 June 30, 2022 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant Liability $ 70,728 $ — $ — $ 70,728 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 June 30, 2022 include the expected volatility of the Company’s stock of approximately 70 0.501 0.0 2.991 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 | 6 Months Ended |
Jun. 30, 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, has effectively wound 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 and the USAO 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”) was 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. 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 Company’s financial statements for the first quarter of 2022 included a $ 1,850,000 1,787,417 63,000 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 10 180 180 180 1.00 10 180 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 holding 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. On May 23, 2022, the Company filed a motion for summary judgment on Count VI and a motion to dismiss Counts VII, VIII, and IX of plaintiff’s amended Complaint. Those motions are pending before the Court, and the case continues to proceed. The Company believes the claims in plaintiff’s Complaint are without merit, and intends to vigorously dispute them. The Company has not recorded a contingent liability related to this matter. 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 | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended |
Jun. 30, 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 ("SARs")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 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 In June 2022, the Company issued 250,000 540,000 Stock Options The following table summarizes the outstanding stock option activity for the six months ended June 30, 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 9.64 Options Canceled/Expired — — — Total Outstanding Vested and Expected to Vest as of June 30, 2022 130,000 0.62 9.64 Vested at June 30, 2022 35,833 0.62 9.64 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 (254,273 ) 4.54 — Total Outstanding Vested and Expected to Vest as of June 30, 2022 4,731,142 4.19 2.86 Vested at June 30, 2022 4,726,209 4.19 2.86 Continuing operations expense related to stock options for three months ended June 30, 2022 and 2021, was approximately $ 4,000 4,000 Continuing operations expense related to stock options for the six months ended June 30, 2022 and 2021, was approximately $ 13,000 113,000 Discontinued operations expense related to stock options for the three months ended June 30, 2022 and 2021 was approximately $ 0 1,000 Discontinued operations expense related to stock options for the six months ended June 30, 2022 and 2021 was approximately $ 0 34,000 As of June 30, 2022, the compensation expense related to stock options issued under the Company’s 2009 Equity Incentive Plan has been fully recognized. 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 4,861,142 4,985,415 0 0 4,762,042 4,980,482 0 0 Restricted Stock Units The following table summarizes the RSUs outstanding at June 30, 2022: Number of Shares/Unit Weighted Non-vested RSUs as of December 31, 2021 1,039,003 $ 4.16 RSUs vested during the period (389,003 ) 3.35 RSUs forfeited during the period — — Non-vested RSUs as of June 30, 2022 650,000 $ 4.64 For the three months ended June 30, 2022 and 2021, continuing operations expense related to RSUs was approximately $ (464,000) 794,000 For the six months ended June 30, 2022 and 2021, continuing operations expense related to RSUs was approximately $ (102,000) 1,531,000 For the three and six months ended June 30, 2022 and 2021, there was no As of June 30, 2022, the unamortized compensation expense related to RSUs was approximately $ 478,000 1.41 Warrants The following table summarizes warrants outstanding at June 30, 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 * As of June 30, 2022 and December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 70,728 99,655 At June 30, 2022, the Company has reserved shares of common stock for issuance upon exercise of outstanding options, warrants including all of the warrants in the table above and restricted stock units, as follows: Warrants 14,202,824 Restricted Stock Units 650,000 Non-Plan Awards 130,000 2009 Equity Incentive Plan 4,731,142 Total Shares Reserved 19,713,966 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 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 pursuant to which 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 June 30, 2022 and 2021 were $ 0 0 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13: Subsequent Events On July 5, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Investor” or the “Purchaser”), pursuant to which the Company issued on July 5, 2022 (the “Closing Date”), in a private placement transaction (the “Offering” or the “Transaction”), an aggregate of 3,000 0.0001 750,000 0.47 300,000 January 3, 2023 January 5, 2028 (i) to vote on a proposal presented to the Company’s stockholders for approval (the “Proposal”) to approve a reverse stock split of the Company’s outstanding Common Stock (the “Reverse Stock Split”), and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Proposal, and (ii) to 1,000,000 votes per share of Series C Preferred on the Proposal and any such adjournment proposal. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern The Company’s cash and cash equivalents were $ 8,875,925 23,220,770 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 six months ended June 30, 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. 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 Loss per Share | Basic and Diluted Loss per Share The Company computes basic loss per share by dividing the loss attributable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The diluted loss per share calculation is based on the treasury stock method and gives effect to dilutive options, warrants and other potential dilutive common stock. The effect of common stock equivalents was anti-dilutive and was excluded from the calculation of weighted average shares outstanding. Potential dilutive securities, which are not included in diluted weighted average shares outstanding for the six months ended June 30, 2022 and June 30, 2021, consist of outstanding equity classified warrants covering 14,202,824 15,095,238 4,861,142 6,113,866 650,000 2,034,260 |
Discontinued Operations | Discontinued Operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations |
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) | 6 Months Ended |
Jun. 30, 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): June 30, 2022 December 31, 2021 Cash and Cash Equivalents $ 24,024 $ 37,849 Accounts Receivable, net — 693 Inventories — 12,000 Fixed Assets, net 6,791,090 6,799,090 Other assets 8,870 72,469 Loss recognized on classification as held for sale (2,601,442 ) (2,601,442 ) Total assets of the disposal group classified as held for sale in the statement of financial position $ 4,222,542 $ 4,320,659 Carrying amounts of major classes of liabilities included as part of discontinued operations Accounts Payable $ 630,819 $ 681,646 Accrued Other Expenses 53,936 133,313 Lease Liabilities 327,683 412,357 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 $ 1,468,368 $ 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 June 30, 2022 2021 Major line items constituting pretax profit (loss) of discontinued operations REVENUE, net $ — $ 2,735,830 COST OF GOODS SOLD — (2,074,390 ) Gross Profit — 661,440 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (91,911 ) (2,197,153 ) RESEARCH AND DEVELOPMENT — (36,055 ) IMPAIRMENT OF LONG LIVED ASSETS — (9,347 ) OTHER INCOME (EXPENSE) Interest Expense — (42,047 ) Other Income 8,614 5,987 Gain from asset disposal 21,530 — Loss from discontinued operations before income taxes (61,767 ) (1,617,175 ) Income tax benefit — — Loss from discontinued operations after income taxes $ (61,767 ) $ (1,617,175 ) Six Months Ended June 30, 2022 2021 Major line items constituting pretax profit (loss) of discontinued operations REVENUE, net $ — $ 5,511,683 COST OF GOODS SOLD — (3,871,100 ) Gross Profit — 1,640,583 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (264,383 ) (4,598,575 ) RESEARCH AND DEVELOPMENT — (47,634 ) IMPAIRMENT OF LONG LIVED ASSETS — (9,347 ) OTHER INCOME (EXPENSE) Interest Expense — (79,488 ) Other Income 8,625 20,738 Gain from asset disposal 29,130 — Loss from discontinued operations before income taxes (226,628 ) (3,073,723 ) Income tax benefit — — Loss from discontinued operations after income taxes $ (226,628 ) $ (3,073,723 ) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories at June 30, 2022 and December 31, 2021 consisted of the following | Inventories at June 30, 2022 and December 31, 2021 consisted of the following June 30, 2022 December 31, 2021 Finished Goods $ — $ — Work-in-Process — 386,610 Raw Materials 440,198 31,997 Inventories $ 440,198 418,607 |
Fixed Assets, net (Tables)
Fixed Assets, net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets at June 30, 2022 and December 31, 2021 are summarized in the table below | Fixed assets at June 30, 2022 and December 31, 2021 are summarized in the table below Description Useful Life June 30, 2022 December 31, 2021 Machinery and Equipment 3 5 $ 5,079,972 $ 4,522,583 Less: Accumulated Depreciation (3,894,077 ) (3,181,567 ) Construction In Progress - Equipment 649,990 993,752 Fixed Assets, net $ 1,835,885 $ 2,334,768 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of June 30, 2022, and December 31, 2021: | The tables below present the operating lease assets and liabilities recognized on the condensed consolidated balance sheets as of June 30, 2022, and December 31, 2021: Right-of Use Assets June 30, 2022 December 31, 2021 Operating Lease $ 485,761 $ 650,460 Lease Liabilities, Current Portion June 30, 2022 December 31, 2021 Operating Lease $ 362,434 $ 349,871 Lease Liabilities, net of current portion Operating Lease 157,246 342,562 Total Lease Liabilities $ 519,680 $ 692,433 |
The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of June 30, 2022 and December 31, 2021 were: | The Company’s weighted average remaining lease term and weighted average discount rate for operating and financing leases as of June 30, 2022 and December 31, 2021 were: June 30, 2022 Operating Weighted Average Remaining Lease Term 1.42 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 $ 185,937 2023 349,365 Undiscounted Future Minimum Lease Payments 535,302 Less: Difference between undiscounted lease payments and discounted lease liabilities 15,622 Total Lease Liabilities $ 519,680 Short-Term Lease Liabilities $ 362,434 Long-Term Lease Liabilities $ 157,246 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2022 Total Level 1 Level 2 Level 3 Liabilities 2020 Warrant Liability $ 70,728 $ — $ — $ 70,728 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 June 30, 2022 include the expected volatility of the Company’s stock of approximately 70 0.501 0.0 2.991 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) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
The following table summarizes the outstanding stock option activity for the six months ended June 30, 2022: | The following table summarizes the outstanding stock option activity for the six months ended June 30, 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 9.64 Options Canceled/Expired — — — Total Outstanding Vested and Expected to Vest as of June 30, 2022 130,000 0.62 9.64 Vested at June 30, 2022 35,833 0.62 9.64 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 (254,273 ) 4.54 — Total Outstanding Vested and Expected to Vest as of June 30, 2022 4,731,142 4.19 2.86 Vested at June 30, 2022 4,726,209 4.19 2.86 |
The following table summarizes the RSUs outstanding at June 30, 2022: | The following table summarizes the RSUs outstanding at June 30, 2022: Number of Shares/Unit Weighted Non-vested RSUs as of December 31, 2021 1,039,003 $ 4.16 RSUs vested during the period (389,003 ) 3.35 RSUs forfeited during the period — — Non-vested RSUs as of June 30, 2022 650,000 $ 4.64 |
The following table summarizes warrants outstanding at June 30, 2022 and at December 31, 2021: | The following table summarizes warrants outstanding at June 30, 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 * As of June 30, 2022 and December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 70,728 99,655 |
At June 30, 2022, the Company has reserved shares of common stock for issuance upon exercise of outstanding options, warrants including all of the warrants in the table above and restricted stock units, as follows: | At June 30, 2022, the Company has reserved shares of common stock for issuance upon exercise of outstanding options, warrants including all of the warrants in the table above and restricted stock units, as follows: Warrants 14,202,824 Restricted Stock Units 650,000 Non-Plan Awards 130,000 2009 Equity Incentive Plan 4,731,142 Total Shares Reserved 19,713,966 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Cash and cash equivalents | $ 8,875,925 | $ 40,305,438 | $ 23,220,770 |
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 | 4,861,142 | 6,113,866 | |
Restricted Stock Units (RSUs) [Member] | |||
Potential dilutive securities, excluded from computation of earnings | 650,000 | 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 ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Carrying amounts of major classes of assets included as part of discontinued operations (unaudited): | ||
Cash and Cash Equivalents | $ 24,024 | $ 37,849 |
Accounts Receivable, net | 693 | |
Inventories | 12,000 | |
Fixed Assets, net | 6,791,090 | 6,799,090 |
Other assets | 8,870 | 72,469 |
Loss recognized on classification as held for sale | (2,601,442) | (2,601,442) |
Total assets of the disposal group classified as held for sale in the statement of financial position | 4,222,542 | 4,320,659 |
Carrying amounts of major classes of liabilities included as part of discontinued operations | ||
Accounts Payable | 630,819 | 681,646 |
Accrued Other Expenses | 53,936 | 133,313 |
Lease Liabilities | 327,683 | 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 | $ 1,468,368 | $ 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 | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Major line items constituting pretax profit (loss) of discontinued operations | ||||
REVENUE, net | $ 2,735,830 | $ 5,511,683 | ||
COST OF GOODS SOLD | (2,074,390) | (3,871,100) | ||
Gross Profit | 661,440 | 1,640,583 | ||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | (91,911) | (2,197,153) | (264,383) | (4,598,575) |
RESEARCH AND DEVELOPMENT | (36,055) | (47,634) | ||
IMPAIRMENT OF LONG LIVED ASSETS | (9,347) | (9,347) | ||
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (42,047) | (79,488) | ||
Other Income | 8,614 | 5,987 | 8,625 | 20,738 |
Gain from asset disposal | 21,530 | 29,130 | ||
Loss from discontinued operations before income taxes | (61,767) | (1,617,175) | (226,628) | (3,073,723) |
Income tax benefit | ||||
Loss from discontinued operations after income taxes | $ (61,767) | $ (1,617,175) | $ (226,628) | $ (3,073,723) |
Discontinued Operations and A_3
Discontinued Operations and Assets Held for Sale (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Aug. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Lease | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Aug. 31, 2022 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Gain on sale | $ 21,530 | $ 29,130 | ||||||
Financial advisor fee payable | $ 700,000 | |||||||
Lease liabilities | 327,683 | 327,683 | 412,357 | |||||
Contingent loss liability | 410,000 | 410,000 | 410,000 | |||||
Accounts Payable | 630,819 | 630,819 | 681,646 | |||||
Contract Termination [Member] | Discontinued Operations [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Contingent loss liability | 410,000 | 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] | ||||||||
Accounts Payable | 0 | $ 0 | 3,000 | |||||
U S Compounding inc [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
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 | $ 328,000 | $ 328,000 | $ 412,000 | |||||
Debt payment frequency | monthly | |||||||
Debt payment amount | $ 19,000 | |||||||
Interest rate | 6% | 6% | ||||||
Interest expense | $ 0 | $ 30,000 | $ 0 | $ 61,000 | ||||
U S Compounding inc [Member] | Minimum [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Remaining lease terms | 1 year | 1 year | ||||||
U S Compounding inc [Member] | Maximum [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Remaining lease terms | 4 years | 4 years | ||||||
U S Compounding inc [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 | |||||||
U S Compounding inc [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 | |||||||
U S Compounding inc [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 L L C [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 | $ 758,000 | $ 440,000 | ||||||
Recognized loss | $ 1,200,000 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Recall expense | $ 2,000,000 | ||||
Product recall liability | $ 600,000 | 600,000 | $ 2,000,000 | ||
Revenues recognized previously reported as deferred revenue | 25,000 | $ 25,000 | $ 50,000 | $ 50,000 | |
Uswm Agreement [Member] | |||||
Term of agreement | 10 years | ||||
Agreements renewal terms | 5 years | ||||
Sandoz Agreement [Member] | Sandoz [Member] | |||||
Deferred revenue | $ 800,000 | $ 800,000 | $ 850,000 |
Inventories at June 30, 2022 an
Inventories at June 30, 2022 and December 31, 2021 consisted of the following (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished Goods | ||
Work-in-Process | 386,610 | |
Raw Materials | 440,198 | 31,997 |
Inventories | $ 440,198 | $ 418,607 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Jun. 30, 2022 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Inventory Valuation Reserves | $ 0 | $ 0 |
Fixed assets at June 30, 2022 a
Fixed assets at June 30, 2022 and December 31, 2021 are summarized in the table below (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Machinery and Equipment | $ 5,079,972 | $ 4,522,583 |
Less: Accumulated Depreciation | (3,894,077) | (3,181,567) |
Construction In Progress - Equipment | 649,990 | 993,752 |
Fixed Assets, net | $ 1,835,885 | $ 2,334,768 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 5 years |
Fixed Assets, net (Details Narr
Fixed Assets, net (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 368,000 | $ 369,000 | $ 712,510 | $ 696,867 |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) Lease | Jun. 30, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 88,000 | $ 88,000 | $ 177,000 | $ 177,000 |
Cash paid operating lease | $ 93,000 | $ 90,000 | $ 185,000 | $ 180,000 |
Office [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of operating leases | Lease | 1 | |||
Lease remaining lease term | 17 months | 17 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 June 30, 2022, and December 31, 2021: (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Right-of Use Assets | ||
Operating Lease | $ 485,761 | $ 650,460 |
Lease Liabilities, Current Portion | ||
Operating Lease | 362,434 | 349,871 |
Lease Liabilities, net of current portion | ||
Operating Lease | 157,246 | 342,562 |
Total Lease Liabilities | $ 519,680 | $ 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 June 30, 2022 and December 31, 2021 were: (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Weighted average remaining lease term | 1 year 5 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 ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Leases | ||
Remainder of 2022 | $ 185,937 | |
2023 | 349,365 | |
Undiscounted Future Minimum Lease Payments | 535,302 | |
Less: Difference between undiscounted lease payments and discounted lease liabilities | 15,622 | |
Total Lease Liabilities | 519,680 | $ 692,433 |
Short-Term Lease Liabilities | 362,434 | 349,871 |
Long-Term Lease Liabilities | $ 157,246 | $ 342,562 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Apr. 13, 2020 | Jun. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Aug. 05, 2021 | Mar. 15, 2021 | |
Paycheck Protection Plan First Draw Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt amount | $ 0 | |||||
Paycheck Protection Plan Second Draw Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Contingent loss liability | $ 1,850,000 | |||||
Repayment of loan | $ 1,787,417 | |||||
Paycheck Protection Program [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of loan amount use for eligible costs | 60% | |||||
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% | |||||
Paycheck Protection Plan Second Draw Loan [Member] | Promissory Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt amount | $ 1,765,495 | |||||
Interest rate | 1% |
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 ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2020 Warrant Liability | $ 70,728 | $ 99,655 |
Fair Value, Recurring [Member] | Warrants 2020 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2020 Warrant Liability | 70,728 | 99,655 |
Fair Value, Recurring [Member] | Warrants 2020 [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] | Warrants 2020 [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] | Warrants 2020 [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2020 Warrant Liability | $ 70,728 | $ 99,655 |
Fair Value Measurement (Details
Fair Value Measurement (Details Narrative) | Jun. 30, 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 | 0.501 | 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 | 0.02991 | 0.01038 |
Legal Matters (Details Narrativ
Legal Matters (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 d $ / shares | Dec. 31, 2021 d $ / shares | Jun. 30, 2022 USD ($) $ / shares | Jun. 30, 2022 USD ($) $ / shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) $ / shares | Jun. 30, 2021 USD ($) | Mar. 31, 2022 USD ($) | |
Gain on loan | $ 62,583 | $ (1,787,417) | ||||||
Minimum bid price per share requirement | $ / shares | $ 1 | $ 1 | $ 1 | $ 1 | $ 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 | 10 | ||||||
Additional period of calendar days to regain compliance | 180 days | 180 days | ||||||
Paycheck Protection Plan Second Draw Loan [Member] | ||||||||
Contingent loss liability | $ 1,850,000 | |||||||
Repayment of debt | $ 1,787,417 | |||||||
Gain on loan | $ 63,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | 6 Months Ended | ||
Feb. 02, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Class of Stock [Line Items] | |||
Proceeds from warrant exercises | $ 5,851,900 | ||
Number of shares issued | 46,621,621 | ||
Offering price (in dollars per share) | $ 1.11 | ||
Proceeds from issuance of common stock | 51,749,998 | ||
Underwriting discounts and commissions | $ 3,330,752 | ||
Over-Allotment Option [Member] | |||
Class of Stock [Line Items] | |||
Number of shares issued | 6,081,081 | ||
Public Offering [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from issuance of common stock | $ 48,400,000 | ||
Underwriting discounts and commissions | 3,300,000 | ||
Warrant [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from warrant exercises | $ 5,852,000 | ||
Warrants exercised | 8,356,000 | ||
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 six months ended June 30, 2022: (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
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 granted, weighted average remaining contractual term | 9 years 7 months 20 days |
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 7 months 20 days |
Vested at ending | shares | 35,833 |
Options vested, weighted average exercise price at ending | $ / shares | $ 0.62 |
Options vested, weighted average remaining contractual term | 9 years 7 months 20 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 | (254,273) |
Options canceled/expired, weighted average exercise price | $ / shares | $ 4.54 |
Total outstanding and vested and expected to vest at ending | shares | 4,731,142 |
Options outstanding, weighted average exercise price, ending balance | $ / shares | $ 4.19 |
Options outstanding, weighted average remaining contractual term at ending | 2 years 10 months 9 days |
Vested at ending | shares | 4,726,209 |
Options vested, weighted average exercise price at ending | $ / shares | $ 4.19 |
Options vested, weighted average remaining contractual term | 2 years 10 months 9 days |
The following table summarize_2
The following table summarizes the RSUs outstanding at June 30, 2022: (Details) - Restricted Stock Units (RSUs) [Member] | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
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 | (389,003) |
Weighted average grant date fair value, vested | $ / shares | $ 3.35 |
RSUs forfeited during the period | shares | |
Weighted average grant date fair value, forfeited | $ / shares | |
Non-vested RSUs, ending | shares | 650,000 |
Weighted average grant date fair value, ending | $ / shares | $ 4.64 |
The following table summarize_3
The following table summarizes warrants outstanding at June 30, 2022 and at December 31, 2021: (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | ||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 14,202,824 | 14,202,824 | |
2020 Warrant Liability | $ 70,728 | $ 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 | November 15, 2007 | November 15, 2007 | |
Expiration date | Nov. 15, 2022 | Nov. 15, 2022 | |
Warrants 2019 [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 | August 5, 2019 | August 5, 2019 | |
Expiration date | Aug. 05, 2024 | Aug. 05, 2024 | |
Warrants 2020 [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 | February 25, 2020 | February 25, 2020 | |
Expiration date | Sep. 03, 2025 | Sep. 03, 2025 | |
[1]As of June 30, 2022 and December 31, 2021, the fair value of the warrant liability related to the 2020 Warrants was $ 70,728 99,655 |
At June 30, 2022, the Company h
At June 30, 2022, the Company has reserved shares of common stock for issuance upon exercise of outstanding options, warrants including all of the warrants in the table above and restricted stock units, as follows: (Details) | Jun. 30, 2022 shares |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 19,713,966 |
Non Plan Awards [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 130,000 |
2009 Equity incentive Plan [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 4,731,142 |
Restricted Stock Units (RSUs) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 650,000 |
Warrant [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of common stock reserved for future issuance | 14,202,824 |
Stock-based Compensation, War_3
Stock-based Compensation, Warrants and Shares Reserved (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 18 Months Ended | ||||
Jan. 02, 2022 shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) d $ / shares shares | Jun. 30, 2021 USD ($) | Dec. 31, 2020 shares | Jun. 30, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Number of share granted | shares | 250,000 | ||||||||
Expense reversal | $ 540,000 | ||||||||
Stock Based Compensation | $ (88,799) | $ 1,677,841 | |||||||
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% | ||||||||
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 | 4,861,142 | 4,861,142 | 4,861,142 | 4,861,142 | 4,985,415 | ||||
Stock options outstanding aggregate intrinsic value | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Number of stock options exercisable | shares | 4,762,042 | 4,762,042 | 4,762,042 | 4,762,042 | 4,980,482 | ||||
Stock options exercisable aggregate intrinsic value | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Share-Based Payment Arrangement, Option [Member] | Continuing Operations [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Stock Based Compensation | 4,000 | $ 4,000 | 13,000 | 113,000 | |||||
Share-Based Payment Arrangement, Option [Member] | Discontinued Operations [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Stock Based Compensation | 0 | 1,000 | 0 | 34,000 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Unrecognized stock compensation | $ 478,000 | 478,000 | $ 478,000 | 478,000 | |||||
Period for recognition | 1 year 4 months 28 days | ||||||||
Restricted Stock Units (RSUs) [Member] | Continuing Operations [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Stock Based Compensation | (464,000) | 794,000 | $ (102,000) | 1,531,000 | |||||
Restricted Stock Units (RSUs) [Member] | Discontinued Operations [Member] | |||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||
Stock Based Compensation | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Maintenance fees | $ 0 | $ 0 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jul. 05, 2022 | Feb. 02, 2021 | Jun. 30, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||||
Number of shares issued | 46,621,621 | |||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of warrants issued | 750,000 | |||
Warrants exercise price | $ 0.47 | |||
Warrants exercisable date | Jan. 03, 2023 | |||
Warramts term end date | Jan. 05, 2028 | |||
Subsequent Event [Member] | Series C Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued | 3,000 | |||
Preferred stock, par value (in dollars per share) | $ 0.0001 | |||
Subscription amount | $ 300,000 | |||
Preferred stock voting rights | (i) to vote on a proposal presented to the Company’s stockholders for approval (the “Proposal”) to approve a reverse stock split of the Company’s outstanding Common Stock (the “Reverse Stock Split”), and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Proposal, and (ii) to 1,000,000 votes per share of Series C Preferred on the Proposal and any such adjournment proposal. |