(Pre-Effective Amendment No. 1)
Delaware | 2834 | 82-0429727 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
C. Kevin Kelso, Esq. Weintraub Tobin 400 Capitol Mall, 11th Floor Sacramento, CA 95814 (916) 558-6000 | David B. Allen Jeffrey J. Plumer K&L Gates LLP 1 Park Plaza, 12th Floor Irvine, CA 92614 (949) 253-0900 |
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company x |
Title of each class of securities to be registered | Proposed maximum aggregate offering price (1) | Amount of registration fee | |||||
Common Stock, par value $0.0001 per share (2) (3) | $ | 25,000,000 | $ | 3,220 | (8) | ||
Common Stock Purchase Warrants(4) | $ | (5) | $ | (6 | ) | ||
Shares of Common Stock, $0.0001 per value, underlying Common Stock Purchase Warrants (2)(5) | $ | $ | |||||
Representative’s Common Stock Purchase Warrant | — | (6) | |||||
Shares of Common Stock underlying Representative’s Common Stock Purchase Warrant (2) (7) | $ | 1,562,500 | $ | 202 | (8) | ||
Total: | $ | 26,562,500 | $ | 3,422 | (8) |
(1) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended. (the “Securities Act”). |
(2) | Pursuant to Rule 416 of the Securities Act, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions. |
(3) | Includes shares the underwriters have the option to purchase to cover over-allotments, if any. |
(4) | Includes warrants the underwriters have the option to purchase to cover over-allotments, if any. |
(5) | The offering price of the shares of common stock underlying the warrants to be issued to the investors hereunder are included in the price of the common stock above. |
(6) | No fee pursuant to Rule 457(g) under the Securities Act. |
(7) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act of 1933, as amended, based on an estimated proposed maximum aggregate offering price of $1,562,500, or 125% of $1,250,000 (5% of $25,000,000). Assumes the full exercise of the underwriters’ over-allotment option. |
(8) | Previously paid. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine. |
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED NOVEMBER 25, 2013 |
Per Share | Per Warrant | Total | |||||||
Public offering price | $ | $ | $ | ||||||
Underwriting discount (1) | $ | $ | $ | ||||||
Proceeds, before expenses, to us | $ | $ | $ |
(1) | The underwriters will receive compensation in addition to the underwriting discount. See “Underwriting” beginning on page 88 of this prospectus for a description of compensation payable to the underwriters. |
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F-1 |
Specialty Pharmaceutical Products | Target Indication | Development Status (1) | ||
Epinephrine PFS | Anaphylaxis | Submit for regulatory approval to sell | ||
APC-5000 | Asthma/COPD | Phase 3 trial (2) | ||
APC-1000 | Asthma/COPD | Phase 3 trial (2) | ||
APC-3000 | Allergic Rhinitis | Phase 3 trial (2) | ||
Biotechnology Products | Target Indication | Development Status (1) | ||
TeloB-VAX (vaccine) | Prostate Cancer | Phase 2 trial | ||
APC-100 | Prostate Cancer | Phase 1 trial (3) | ||
APC-200 | Prostate Cancer | Preclinical | ||
APC-300 | Prostate Cancer | Preclinical |
(1) | Represents the next development or regulatory stage that we intend to pursue. We may not have the financial resources to pursue any of these opportunities even assuming the successful completion of this offering. |
(2) | A single Phase 3 trial, without previous Phase 1 or Phase 2 trials, is anticipated. |
(3) | Phase 1/2a clinical trial has commenced and is ongoing. |
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● | We may never commercialize any of our products or earn a profit. |
● | Our auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing. |
● | Even assuming the successful completion of this offering, we may require additional financing to continue as a going concern. |
● | Statements in this prospectus concerning our future plans and operations are dependent on our ability to secure adequate funding and the absence of unexpected delays or adverse developments. We may not be able to secure required funding. |
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● | We have incurred losses since our inception, and we anticipate that we will continue to incur losses. We may never achieve or sustain profitability. |
● | Our limited operating history may make it difficult to evaluate our business and our future viability. |
● | Many of our potential products and technologies are in early stages of development. |
● | Delays in the commencement or completion of clinical testing of our product candidates could result in increased costs and delay our ability to generate significant revenues. |
● | We intend to pursue Section 505(b)(2) regulatory approval filings with the FDA for our products where applicable. Such filings involve significant costs, and we may also encounter difficulties or delays in obtaining regulatory approval for our products. |
● | We are subject to substantial government regulation, which could materially adversely affect our business. If we do not receive regulatory approvals, we may not be able to develop and commercialize our technologies. |
● | If we fail to obtain acceptable prices or appropriate reimbursement for our products, our ability to successfully commercialize our products will be impaired. |
● | Legislative or regulatory reform of the healthcare system may affect our ability to sell our products profitably. |
● | We have limited sales, marketing and distribution experience. |
● | Our failure to adequately protect or to enforce our intellectual property rights or secure rights to third party patents could materially harm our proprietary position in the marketplace or prevent the commercialization of our products. |
● | We depend on our officers. If we are unable to retain our key employees or to attract additional qualified personnel, our product operations and development efforts may be seriously jeopardized. |
● | The price of our common stock may be volatile. |
● | Our principal stockholders have significant influence over us, they may have significant influence over actions requiring stockholder approval, and your interests as a stockholder may conflict with the interests of those persons. |
● | In preparing our consolidated financial statements, our management determined that our disclosure controls and procedures and that our internal controls over financial reporting, were ineffective as of March 31, 2013, which could result in material misstatements in our financial statements. If we continue to fail to comply with the rules under the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or if we discover additional material weaknesses and other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult. |
● | A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline and may impair our ability to raise capital in the future. |
● | You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future. |
● | Our stockholders approved a proposal at our annual meeting of stockholders held on October 15, 2013, to authorize our board of directors to effect a reverse stock split of our common stock. There are risks associated with a reverse stock split, if it is effected. |
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Securities offered by us | [•] shares of common stock and warrants to purchase up to an aggregate of [•] shares of common stock (up to [•] shares and warrants to purchase up to [•] shares if the underwriters exercise their over-allotment option in full). | |
Description of the Warrants | The warrants are exercisable at $[•] per share. The warrants are exercisable immediately upon issuance and expire five years from the date of issuance. See “Description of Securities.” This prospectus also relates to the offering of the shares of common stock that are issuable upon exercise of the warrants. We do not intend to apply for listing of the warrants on any securities exchange or other trading system. | |
Common Stock to be outstanding after this offering | [•] shares or [•] shares if the warrants sold in this offering are exercised in full. If the underwriters’ over-allotment option is exercised in full, the total number of shares of common stock outstanding after this offering would be [•] shares or [•] shares if the warrants are exercised in full. | |
Use of Proceeds | We intend to use approximately $7 million of the net proceeds received from this offering to make our final payment to 3M to acquire the assets relating to the Taper dry powder inhaler technology. We will also use a portion of the net proceeds to pay all amounts owed under any of the Secured Notes that the holders of the Secured Notes do not convert into common stock in connection with the closing of this offering. The holders have waived their right to convert their Secured Notes in connection with this offering if the price to public of common stock sold in this offering is less than $0.59 per share. As a result, if the price to public of the shares sold in this offering is less than $0.59, we do not expect any of the holders of Secured Notes to convert into common stock in connection with this offering. If no Secured Notes are converted, approximately $7,477,482 of the net proceeds would be used to pay the Secured Notes. We may also use a portion of the net proceeds from this offering to pay any accrued interest owed and any unconverted balance of principal and interest owed under an outstanding convertible promissory note dated December 31, 2012, held by an individual investor in the principal amount of $600,000, which is due March 26, 2014, which accrues interest a rate of 10% per annum, and which is convertible at the option of the holder into shares of common stock at a price of $0.55 per share. We intend to use the remaining net proceeds to fund our research and development activities and for working capital and general corporate purposes, including payment of outstanding obligations and indebtedness and seeking regulatory approval for and commercially launching our Epinephrine PFS syringe product. See “Use of Proceeds” on page 29. | |
Risk Factors | See “Risk Factors” beginning on page 9 and the other information included in this prospectus for a discussion of |
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factors you should carefully consider before investing in our securities. | ||
OTCQB trading symbol | ADMP | |
Proposed Symbol and Listing | We have applied for listing of our common stock on The Nasdaq Capital Market under the symbol “ADMP.” | |
Unless we indicate otherwise, all information in this prospectus (i) reflects a 1-for-[•] reverse stock split of our issued and outstanding shares of common stock (and proportional adjustment of options and warrants) to be effected just prior to the closing of this offering and the corresponding adjustment of all common stock price per share and stock option and warrant exercise price data; (ii) is based on 104,876,409 pre-reverse split shares of common stock issued and outstanding as of October 31, 2013, see “Description of Securities”; (iii) assumes no exercise by the underwriters of their option to purchase up to an additional [•] shares of common stock and warrants to cover over-allotments, if any; (iv) excludes 1,090,909 pre-reverse split shares of common stock issuable upon conversion of outstanding convertible notes and convertible debentures, other than the Secured Notes; (v) excludes approximately 6,623,582 pre-reverse split shares of our common stock issuable upon exercise of outstanding stock options under our equity incentive plans with exercise prices ranging from $0.18 to $0.75 and having a weighted average exercise price of $0.34 per share as of October 31, 2013, and approximately 726,019 pre-reverse split shares issuable upon the vesting of outstanding restricted stock units awarded under our equity incentive plans; (vi) excludes approximately 2,534,349 pre-reverse split shares of our common stock issuable upon the exercise of outstanding warrants, other than the June Warrants, at a weighted average exercise price of $0.84 per share as of October 31, 2013; (vii) excludes approximately 13,004,319 pre-reverse split shares of our common stock issuable upon exercise of the June Warrants at an exercise price of $0.715 per share (subject to “full-ratchet” anti-dilution protection upon certain equity issuances, including the shares of common stock offered in this offering, at prices below $0.715 per share, as defined in the June Warrants); (viii) excludes approximately 13,004,319 pre-reverse split shares of common stock issuable upon conversion of the Secured Notes if all Secured Notes were converted in connection with this offering; and (ix) excludes [•] shares of common stock underlying the warrants to be issued to the underwriters in connection with this offering. |
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● | obtaining required funding; |
● | obtaining regulatory approval to commence a clinical trial; |
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● | reaching agreement on acceptable terms with prospective contract research organizations and clinical trial sites; |
● | obtaining sufficient quantities of clinical trial materials for product candidates; |
● | obtaining institutional review board approval to conduct a clinical trial at a prospective site; and |
● | recruiting participants for a clinical trial. |
● | failure to conduct the clinical trial in accordance with regulatory requirements; |
● | inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold; |
● | failure to achieve certain efficacy and/or safety standards; or |
● | lack of adequate funding to continue the clinical trial. |
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● | not experimental or investigational; |
● | effective; |
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● | medically necessary; |
● | appropriate for the specific patient; |
● | cost-effective; |
● | supported by peer-reviewed publications; and |
● | included in clinical practice guidelines. |
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● | manage our clinical studies effectively; |
● | integrate additional management, administrative, manufacturing and regulatory personnel; |
● | maintain sufficient administrative, accounting and management information systems and controls; and |
● | hire and train additional qualified personnel. |
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● | relatively low trading volume, which can result in significant volatility in the market price of our common stock based on a relatively smaller number of trades and dollar amount of transactions; |
● | the timing and results of our current and any future preclinical or clinical trials of our product candidates; |
● | the entry into or termination of key agreements, including, among others, key collaboration and license agreements; |
● | the results and timing of regulatory reviews relating to the approval of our product candidates; |
● | the initiation of, material developments in, or conclusion of, litigation to enforce or defend any of our intellectual property rights; |
● | failure of any of our product candidates, if approved, to achieve commercial success; |
● | general and industry-specific economic conditions that may affect our research and development expenditures; |
● | the results of clinical trials conducted by others on products that would compete with our product candidates; |
● | issues in manufacturing our product candidates or any approved products; |
● | the loss of key employees; |
● | the introduction of technological innovations or new commercial products by our competitors; |
● | changes in estimates or recommendations by securities analysts, if any, who cover our common stock; |
● | future sales of our common stock; |
● | period-to-period fluctuations in our financial results; |
● | publicity or announcements regarding regulatory developments relating to our products; |
● | period-to-period fluctuations in our financial results, including our cash and cash equivalents balance, operating expenses, cash burn rate or revenue levels; |
● | common stock sales in the public market by one or more of our larger stockholders, officers or directors; |
● | our filing for protection under federal bankruptcy laws; |
● | a negative outcome in any litigation or potential legal proceeding; or |
● | other potentially negative financial announcements, such as a review of any of our filings by the Securities and Exchange Commission, referred to as the Commission or the SEC, changes in accounting treatment or restatement of previously reported financial results or delays in our filings with the SEC. |
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● | Before the sale of penny stock by a broker-dealer to a new purchaser, the broker-dealer must determine whether the purchaser is suitable to invest in penny stocks. To make that determination, a broker-dealer must obtain, from a prospective investor, information regarding the purchaser’s financial condition and investment experience and objectives. Subsequently, the broker-dealer must deliver to the purchaser a written statement setting forth the basis of the suitability finding and obtain the purchaser’s signature on such statement. |
● | A broker-dealer must obtain from the purchaser an agreement to purchase the securities. This agreement must be obtained for every purchase until the purchaser becomes an “established customer.” |
● | The Securities Exchange Act of 1934, or the Exchange Act, requires that before effecting any transaction in any penny stock, a broker-dealer must provide the purchaser with a “risk disclosure document” that contains, among other things, a description of the penny stock market and how it functions and the risks associated with such investment. These disclosure rules are applicable to both purchases and sales by investors. |
● | A dealer that sells penny stock must send to the purchaser, within 10 days after the end of each calendar month, a written account statement including prescribed information relating to the security. |
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● | We would have additional authorized shares of common stock that the Board could issue in future without stockholder approval, and such additional shares could be issued, among other purposes, in financing transactions or to resist or frustrate a third-party transaction that is favored by a majority of the independent stockholders. This could have an anti-takeover effect, in that additional shares could be issued, within the limits imposed by applicable law, in one or more transactions that could make a change in control or takeover of us more difficult. |
● | There can be no assurance that the Reverse Stock Split, if completed, will achieve the benefits that we hope it will achieve. The total market capitalization of our common stock and the company after the Reverse Stock Split may be lower than the total market capitalization before the Reverse Stock Split. |
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PERIOD | High | Low | ||||||
Fiscal Year Ended March 31, 2012: | ||||||||
First Quarter (April 2011 - June 2011) | $ | 0.25 | $ | 0.18 | ||||
Second Quarter (July 2011 - September 2011) | $ | 0.26 | $ | 0.17 | ||||
Third Quarter (October 2011 - December 2011) | $ | 0.30 | $ | 0.15 | ||||
Fourth Quarter (January 2012 - March 2012) | $ | 0.25 | $ | 0.15 | ||||
Fiscal Year Ended March 31, 2013: | ||||||||
First Quarter (April 2012 - June 2012) | $ | 0.77 | $ | 0.23 | ||||
Second Quarter (July 2012 - September 2012) | $ | 0.70 | $ | 0.48 | ||||
Third Quarter (October 2012 - December 2012) | $ | 1.05 | $ | 0.57 | ||||
Fourth Quarter (January 2013 - March 2013) | $ | 0.95 | $ | 0.58 | ||||
Fiscal Year Ended March 31, 2014: | ||||||||
First Quarter (April 2013 - June 2013) | $ | 0.76 | $ | 0.38 | ||||
Second Quarter (July 2013 – September 2013) | $ | 0.67 | $ | 0.38 | ||||
Third Quarter (October 2013 – November 22, 2013) | $ | 0.38 | $ | 0.22 |
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As of September 30, 2013 | Pro Forma, as Adjusted | |||||||
Assumed public offering price per share | $ | • | ||||||
Net tangible book value per share as of September 30, 2013 (1) | $ | 0.05 | ||||||
Increase in pro forma net tangible book value per share attributable to new investors | $ | • | ||||||
Pro forma net tangible book value per share after giving effect to this offering | $ | • | ||||||
Dilution in net tangible book value per share to new investors | $ | • | ||||||
(1) | The calculation of net tangible book value as of September 30, 2013, assumes no exercise by the underwriters of their option to purchase up to an additional [•] shares of common stock to cover over-allotments, if any, and excludes the following: (i) 1,090,909 pre-reverse split shares of common stock issuable upon conversion of outstanding convertible notes and convertible debentures, other than the Secured Notes; (ii) approximately 6,623,582 pre-reverse split shares of our common stock issuable upon exercise of outstanding stock options under our equity incentive plans with exercise prices ranging from $0.18 to $0.75 and having a weighted average exercise price of $0.34 per share as of October 31, 2013, and approximately 726,019 pre-reverse split shares issuable upon the vesting of outstanding restricted stock units awarded under our equity incentive plans; (iii) approximately 2,534,349 pre-reverse split shares of our common stock issuable upon the exercise of outstanding warrants, other than the June Warrants, at a weighted average exercise price of $0.84 per share as of October 15, 2013; (iv) approximately 13,004,319 pre-reverse split shares of our common stock issuable upon exercise of the June Warrants at an exercise price of $0.715 per share (subject to “full-ratchet” anti-dilution protection upon certain equity issuances, including the shares of common stock offered in this offering, at prices below $0.715 per share, as defined in the June Warrants); (v) approximately 13,004,319 pre-reverse split shares of common stock issuable upon conversion of the Secured Notes if all Secured Notes were converted in connection with this offering (subject to “full-ratchet” anti-dilution protection upon certain equity issuances); and (vi) [•] shares of common stock underlying the warrants to be issued to the underwriters in connection with this offering. |
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● | on an actual basis; |
● | on a pro forma basis, giving effect to a 1-for-[•] reverse stock split prior to the consummation of this offering and the issuance of common stock, convertible notes, and warrants from September 30, 2013 through and immediately before the date of this prospectus; and |
● | on a pro forma as adjusted basis, giving effect to the (i) pro forma adjustments set forth in the immediately preceding bullet, and (ii) sale of the securities in this offering at the assumed public offering price of $[•] per share and $[•] per warrant, after deducting underwriting discounts and commissions and estimated offering expenses. |
As of September 30, 2013 | ||||||||||||
Actual | Pro Forma | Pro Forma as Adjusted (1) | ||||||||||
(in thousands, except per share amounts) | ||||||||||||
Cash and cash equivalents | $ | 120 | $ | $ | — | |||||||
Total indebtedness | 8,456 | — | — | |||||||||
Stockholders’ equity: | ||||||||||||
Preferred Stock, par value $0.0001 per share; 10,000,000 shares authorized; 0 shares issued | — | — | — | |||||||||
Common Stock, par value $0.0001 per share; authorized, 200,000,000 shares authorized; 110,104,597 shares; 104,876,409 shares issued and outstanding, and [•] shares issued and outstanding pro forma and pro forma as adjusted, respectively | 11 | • | ||||||||||
Additional paid-in capital | 34,113 | • | ||||||||||
Total stockholders’ equity (deficit) | (4,933 | ) | • | |||||||||
Total capitalization | 3,523 | • |
(1) | A $1.00 increase or decrease in the assumed public offering would increase or decrease our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $[•] million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. |
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Specialty Pharmaceutical Products | Target Indication | Development Status (1) | ||
Epinephrine PFS | Anaphylaxis | Submit for regulatory approval to sell | ||
APC-5000 | Asthma/COPD | Phase 3 trial (2) | ||
APC-1000 | Asthma/COPD | Phase 3 trial (2) | ||
APC-3000 | Allergic Rhinitis | Phase 3 trial (2) | ||
Biotechnology Products | Target Indication | Development Status (1) | ||
TeloB-VAX (vaccine) | Prostate Cancer | Phase 2 trial | ||
APC-100 | Prostate Cancer | Phase 1 trial (3) | ||
APC-200 | Prostate Cancer | Preclinical | ||
APC-300 | Prostate Cancer | Preclinical |
(1) | Represents the next development or regulatory stage that Adamis intends to pursue. |
(2) | A single Phase 3 trial, without previous Phase 1 or Phase 2 trials, is anticipated. |
(3) | Phase 1/2a clinical trial has commenced and is ongoing. |
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During fiscal 2011, we entered into a strategic manufacturing, supply, and product development agreement with Beximco Pharmaceuticals Ltd. Beximco is a leading manufacturer of pharmaceutical formulations and active pharmaceutical ingredients in Bangladesh. Beximco has a large number of products covering broad therapeutic categories, including asthma and allergy inhalers, antibiotics, anti-hypertensives, anti-diabetics, and anti-retrovirals. We intend to develop the APC-1000 product with Beximco. Once developed, we anticipate that we will transfer the specifications to Beximco for manufacturing. Adamis and Beximco intend to introduce a number of separate drugs into the U.S. over the next several years in the allergy and respiratory areas and may co-develop certain drugs. The anticipated dates of development and introduction of APC-1000 and APC-3000 will depend on a number of factors, including the availability of adequate funding to support product development efforts. We expect APC-1000 and APC-3000 to be considered “new” drugs by the FDA, and accordingly we believe that we will be required to submit data for an application for approval to market both products pursuant to Section 505(b)(2) of the Food Drug and Cosmetics Act, or FDCA, although there are no assurances that this will be the case. We intend to conduct a Phase 3 pivotal trial for APC-1000 and APC-3000 but do not believe that Phase 1 or Phase 2 trials will be required. Total time to develop the APC-1000 and APC-3000 products, including manufacture of the products, clinical trials and FDA review, is expected to be approximately 24-30 months from inception of full product development efforts, assuming no unforeseen regulatory or other delays. Factors that could affect the actual launch date for our allergy and respiratory product candidates, as well as our other product candidates, include the outcome of discussions with the FDA concerning the number and kind of clinical trials that the FDA will require before the FDA will consider regulatory approval of the applicable product, any unexpected difficulties in licensing or sublicensing intellectual property rights for other components of the product such as the inhaler, patent infringement lawsuits relating to Paragraph IV certifications as part of any Section 505(b)(2) filings, see “Government Regulation—Regulation in the United States—Section 505(b)(2) New Drug Applications,” any unexpected difficulties in the ability of our suppliers to timely supply quantities for commercial launch of the product, any unexpected delays or difficulties in assembling and deploying an adequate sales force to market the product, unexpected events affecting Beximco’s participation in developing and manufacturing products, and receipt of adequate funding to support product development and sales and marketing efforts.
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● | obtain and maintain international and domestic patent and other legal protections for the proprietary technology, inventions and improvements we consider important to our business; |
● | prosecute and defend our patents; |
● | preserve our trade secrets; and |
● | operate without infringing the patents and proprietary rights of other parties. |
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● | preclinical studies; |
● | submission of an Investigational New Drug application, or IND, for clinical trials; |
● | adequate and well-controlled human clinical trials to establish safety and efficacy of the product; |
● | review of a New Drug Application, or NDA, or review of a Biologics License Application, or BLA; and |
● | inspection of the facilities used in the manufacturing of the drug to assess compliance with the FDA’s current Good Manufacturing Practices, or cGMP, regulations. |
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NAME | AGE | PRINCIPAL OCCUPATION/POSITION WITH ADAMIS | ||
Dennis J. Carlo, Ph.D. | 70 | President, Chief Executive Officer and Director | ||
Kenneth M. Cohen | 58 | Consultant, Director | ||
Craig A. Johnson | 51 | Consultant, Director | ||
David J. Marguglio | 43 | Senior Vice President of Corporate Development, Director | ||
Tina S. Nova, Ph.D. | 59 | President of Genoptix, Inc., Director | ||
Robert O. Hopkins | 53 | Vice President, Finance and Chief Financial Officer | ||
Karen K. Daniels | 60 | Vice President of Operations | ||
Thomas Moll, Ph.D. | 48 | Vice President of Research |
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● | had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
● | been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses; |
● | been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; |
● | been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated; or |
● | been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
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Non-Equity | |||||||||||||||||||||||||||
Stock | Option | Incentive Plan | All Other | ||||||||||||||||||||||||
Name and Principal | Salary | Bonus | Awards | Awards | Compensation | Compensation | |||||||||||||||||||||
Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | Total ($) | |||||||||||||||||||
Dennis J. Carlo, Ph.D. | 2013 | $ | 500,000 | 158,258 | (3) | 150,075 | (1) | — | $ | 19,471 | (2) | $ | 827,804 | ||||||||||||||
President and Chief Executive Officer | 2012 | $ | 500,000 | — | 48,000 | (1) | — | $ | 15,515 | (2) | $ | 563,515 | |||||||||||||||
Robert O. Hopkins | 2013 | $ | 225,000 | 63,724 | (3) | 52,526 | (1) | — | $ | 15,829 | (2) | $ | 357,079 | ||||||||||||||
Vice President, Chief Financial Officer | 2012 | $ | 225,000 | — | 10,000 | (1) | — | $ | 11,446 | (2) | $ | 246,446 | |||||||||||||||
David J. Marguglio | 2013 | $ | 250,000 | 79,129 | (3) | 75,037 | (1) | — | $ | 18,751 | (2) | $ | 422,917 | ||||||||||||||
Senior Vice President, Corporate Development | 2012 | $ | 250,000 | — | 10,000 | (1) | — | $ | 15,515 | (2) | $ | 275,515 |
(1) | Reflects the grant date fair value for financial statement reporting purposes with respect to stock options granted during the years ended March 31, 2013 and 2012, respectively, calculated in accordance with applicable rules and regulations and authoritative guidance. For a discussion of assumptions used to estimate fair value, please see Note 13 to our audited financial statements appearing elsewhere herein. The actual amount ultimately realized from the equity awards will likely vary based on a number of factors, including, but not limited to, Adamis’ actual performance, stock price fluctuations, differences from the valuation assumptions used and the timing of exercise or applicable vesting. Each option is intended to be an incentive stock option. Each option has a term of 10 years from the grant date, subject to earlier termination of the term as provided in our 2009 Equity Incentive Plan, or the Plan. Reflects stock options granted on March 6, 2013 to the named executive officers to purchase shares of common stock, as follows: Dr. Carlo, 535,982 shares; Mr. Hopkins, 187,594 shares; and Mr. Marguglio, 267,991 shares. Each fiscal 2013 option had an exercise price equal to $0.67 per share. For each 2013 award, the option vests at a rate of 1/36 per month becoming exercisable ratably monthly over a period of three years from the grant date. Reflects stock options granted in fiscal 2012 to the named executive officers to purchase shares of common stock, as follows: Dr. Carlo, 600,000 shares; Mr. Hopkins, 125,000 shares; and Mr. Marguglio, 125,000 shares. Each option vested and became exercisable immediately on the grant date with respect to one-third of the shares covered by the option, with the remaining two-thirds of the option shares vesting and becoming exercisable ratably monthly over a period of two years from the grant date. Each fiscal 2012 option had an exercise price equal to $0.19 per share. |
(2) | For fiscal 2013 and 2012, reflects premiums paid by Adamis on behalf of each of Messrs. Carlo, Marguglio and Hopkins for health, dental, and vision insurance. |
(3) | Reflects restricted stock unit awards granted on March 6, 2013, with respect to the following numbers of shares of common stock: Dr. Carlo, 236,206 shares (124,378 vesting March 6, 2014 and 111,828 vesting in three equal annual installments on the anniversary of the award date); Mr. Hopkins, 95,110 shares (55,970 vesting March 6, 2014 and 39,140 vesting in three equal annual installments on the anniversary of the award date); and Mr. Marguglio, 118,103 shares (62,189 vesting March 6, 2014 and 55,914 vesting in three equal annual installments on the anniversary of the award date). The fair market value of the shares at the time of issuance was $0.67 per share. For a discussion of assumptions used to estimate fair value, please see Note 13 to our audited financial statements appearing elsewhere herein. |
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Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Name | |||||||||||||||||||||||||||||||||||
Dennis J. Carlo, Ph.D. | (1) | 14,888 | 521,094 | $ | 0.67 | 3/5/2023 | |||||||||||||||||||||||||||||
(2) | 516,625 | 83,375 | — | $ | 0.19 | 9/11/2021 | (5) | 124,378 | $ | 83,333 | — | $ | — | ||||||||||||||||||||||
(3) | 839,583 | 135,417 | $ | 0.27 | 8/20/2020 | (6) | 111,828 | $ | 74,925 | ||||||||||||||||||||||||||
Robert O. Hopkins | (1) | 5,211 | 182,386 | $ | 0.67 | 3/5/2023 | |||||||||||||||||||||||||||||
(2) | 107,630 | 17,370 | — | $ | 0.19 | 9/11/2021 | (5) | 55,970 | $ | 37,500 | — | $ | — | ||||||||||||||||||||||
(3) | 430,556 | 69,444 | $ | 0.27 | 8/20/2020 | (6) | 39,140 | $ | 26,224 | ||||||||||||||||||||||||||
(4) | 159,833 | — | $ | 0.27 | 8/20/2020 | ||||||||||||||||||||||||||||||
David J. Marguglio | (1) | 7,444 | 260,547 | $ | 0.67 | 3/5/2023 | |||||||||||||||||||||||||||||
(2) | 107,630 | 17,370 | — | $ | 0.19 | 9/11/2021 | (5) | 62,189 | $ | 41,667 | — | $ | — | ||||||||||||||||||||||
(3) | 473,611 | 76,389 | $ | 0.27 | 8/20/2020 | (6) | 55,914 | $ | 37,462 |
(1) | The options vest with respect to 1/36 monthly of the shares subject to the option, and have a term of 10 years (subject to earlier termination upon the events described in the Plan such as termination of employment). |
(2) | The options vest with respect to one-third of the shares immediately and monthly thereafter with respect to 1/24 of the shares subject to the option, and have a term of 10 years (subject to earlier termination upon the events described in the Plan such as termination of employment). |
(3) | The options vest with respect to one-sixth of the shares subject to the option on the six-month anniversary of the grant date and monthly thereafter with respect to 1/36 of the shares subject to the option, and have a term of 10 years (subject to earlier termination upon the events described in the Plan such as termination of employment). |
(4) | The options are fully vested and have a term of 10 years (subject to earlier termination upon the events described in the Plan such as termination of employment). |
(5) | The RSUs are fully vested at the end of one year and have a term of 10 years (subject to earlier termination upon the events described in the Plan such as termination of employment). |
(6) | The RSUs vest as to one-third of the shares subject to the RSU in three equal annual installments on the anniversary of the award date (subject to earlier termination upon the events described in the Plan or the applicable award agreement, including termination of employment). |
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Director | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (4) | Option Awards ($) (2) (3) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
Kenneth M. Cohen | $ | 38,000 | 13,250 | $ | 10,850 | — | — | — | $ | 62,100 | |||||||||||||||||||
Craig A. Johnson | $ | 43,000 | 15,125 | $ | 10,850 | — | — | — | $ | 68,975 | |||||||||||||||||||
Tina S. Nova, Ph.D. | $ | 37,000 | 13,250 | $ | 10,850 | — | — | — | $ | 61,100 |
(1) | Reflects the amount of fees earned during the year ended March 31, 2013. |
(2) | Amounts reflect the grant date fair value for financial statement reporting purposes with respect to stock options granted during the year ended March 31, 2013, calculated in accordance with applicable rules and regulations and authoritative guidance. The assumptions used for these calculations are included in Note 13 to our audited consolidated financial statements appearing elsewhere herein. Represents options awarded to each of Mr. Cohen, Mr. Johnson and Dr. Nova to purchase 35,000 shares of common stock. The exercise price of the options is $0.75 per share. The options have a term of 10 years and vest and become exercisable as to 1/36 of the option shares per month over a period of three years. |
(3) | The aggregate number of option awards outstanding at March 31, 2013, for each of Mr. Cohen, Mr. Johnson and Dr. Nova, was 120,000. |
(4) | Amounts reflect the grant date fair value for financial statement reporting purposes with respect to restricted stock unit awards granted during the year ended March 31, 2013. The fair market value of the stock on the day of the award was $0.67 per share. The restricted stock units represent a contingent right to receive 19,776, in the case of Mr. Cohen and Dr. Nova, and 22,575 in the case of Mr. Johnson, shares of common stock, vesting on March 6, 2014. |
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Directors | Shares Beneficially Owned (1) | Percent | ||||||
Dennis J. Carlo, Ph.D. | 9,181,884 | (2) | 8.6 | |||||
Kenneth M. Cohen | 148,611 | (3) | * | |||||
Craig A. Johnson | 97,917 | (4) | * | |||||
David J. Marguglio | 4,139,346 | (5) | 3.9 | |||||
Tina S. Nova, Ph.D. | 97,917 | (6) | * | |||||
Other Named Officers | ||||||||
Robert O. Hopkins | 1,707,692 | (7) | 1.6 | |||||
Greater than 5% Holders | ||||||||
Eses Holdings (FZE) | 29,620,555 | (8) | 28.2 | |||||
Gemini Master Fund (Ltd.) | 7,698,622 | (10) | 7.3 | |||||
All Adamis directors and named officers as a group (6 persons) (9) | 15,373,367 | 14.2 |
* | Less than 1%. |
(1) | Based upon information supplied by officers, directors and principal stockholders. Beneficial ownership is determined in accordance with rules of the SEC that deem shares to be beneficially owned by any person who has or shares voting or investment power with respect to such shares. Unless otherwise indicated, the persons named in this table have sole voting and sole investing power with respect to all shares shown as beneficially owned, subject to community property laws where applicable. Shares of common stock subject to an option that is currently exercisable or exercisable within 60 days of the Table Date are deemed to be outstanding and to be beneficially owned by the person holding such option for the purpose of computing the percentage ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise indicated, the address of each of the persons in this table is as follows: c/o Adamis Pharmaceuticals Corporation, 11455 El Camino Real, Suite 310, San Diego, California 92130. The percentages in the table are based on 104,876,409 shares of common stock outstanding. |
(2) | Includes 7,358,000 shares of Common Stock owned of record, 100,000 shares of Common Stock held of record by a family member and beneficially owned by Dr. Carlo, and 1,723,884 shares of Common Stock subject to options which were exercisable as of the Table Date or 60 days after such date. Excludes 387,098 shares of Common Stock underlying options, which become exercisable over time after such period. |
(3) | Includes 50,000 shares of Common Stock owned of record by the Cohen-Salsitz family trust and 98,611 shares of Common Stock subject to options which were exercisable as of the Table Date or 60 days after such date. Excludes 21,389 shares of Common Stock underlying options which become exercisable or vest over time after such period. |
(4) | Includes 0 shares of Common Stock owned of record and 97,917 shares of Common Stock subject to options which were exercisable as of the Table Date or 60 days after such date. Excludes 22,083 shares of Common Stock underlying options, which become exercisable over time after such period. |
(5) | Includes 3,389,904 shares of Common Stock owned of record and 749,442 shares of Common Stock subject to options which were exercisable as of the Table Date or 60 days after such date. Excludes 193,549 shares of Common Stock underlying options, which become exercisable or vest over time after such period. |
(6) | Includes 0 shares of Common Stock owned of record and 97,917 shares of Common Stock subject to options which were exercisable as of the Table Date or 60 days after such date. Excludes 22,083 shares of Common Stock underlying options, which become exercisable over time after such period. |
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(7) | Includes 870,750 shares of Common Stock owned of record and 836,942 shares of Common Stock subject to options which were exercisable as of the Table Date or 60 days after such date. Excludes 135,485 shares of Common Stock underlying options which become exercisable or vest over time after such period. |
(8) | Based on an Amendment No. 1 to Schedule 13D filed on behalf of Eses Holdings (FZE) with the SEC on July 5, 2011 and subsequent Form 4 filings made by the named stockholder with the SEC. The address for Eses Holdings (FZE) is Sharjah Airport International Free Zone, Executive Suite, P.O. Box 9366, Sharjah, United Arab Emirates. |
(9) | Includes 3,604,713 shares of Common Stock issuable upon the exercise of options as of or within 60 days after the Table Date. |
(10) | The address for Gemini Master Fund, Ltd. is Appleby Trust (Cayman) Ltd., Clifton House #1350, 75 Fort Street, Grand Cayman KY1-1108, Cayman Islands. All of the securities reflected in the table are owned directly by Gemini Master Fund, Ltd. Gemini Strategies LLC, Inc. is the investment manager of Gemini Master Fund, Ltd., and Steven Winters is the President of Gemini Strategies LLC, Inc. Each of Gemini Strategies LLC, Inc. and Steven Winters expressly disclaim any equitable or beneficial ownership of such securities. Includes (i) 5,245,536 shares of common stock owned by Gemini Master Fund, Ltd., (ii) 1,226,543 shares issuable upon conversion of our Secured Notes issued in the June 26, 2013 private placement transaction, and 1,226,543 shares issuable upon exercise of our June Warrants issued in the June 26, 2013 private placement transaction. |
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○ | the designation of the series, which may be by distinguishing number, letter or title; |
○ | the number of shares of the series, which number the Board may thereafter (except where otherwise provided in the certificate of designation) increase or decrease (but not below the number of shares thereof then outstanding); |
○ | whether dividends, if any, shall be paid, and, if paid, the date or dates upon which, or other times at which, such dividends shall be payable, whether such dividends shall be cumulative or noncumulative, the rate of such dividends (which may be variable) and the relative preference in payment of dividends of such series; |
○ | the redemption provisions and price or prices, if any, for shares of the series; |
○ | the terms and amounts of any sinking fund or similar fund provided for the purchase or redemption of shares of the series; |
○ | the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of our corporation; |
○ | whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of our corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion price or prices, or rate or rates, any adjustments thereto, the date or dates on which such shares shall be convertible and all other terms and conditions upon which such conversion may be made; |
○ | restrictions on the issuance of shares of the same series or of any other class or series; and |
○ | the voting rights, if any, of the holders of shares of the series. |
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● | without the consent of a majority in interest of the Secured Note holders, enter into or exercise any equity line of credit or similar agreement whereby we have the right to “put” our securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula, or issue or agree to issue any floating or variable priced equity linked instruments or any of the foregoing or equity with price reset rights; |
● | except for permitted Liens, without written consent of a majority in interest of the Secured Note holders, grant or allow any security interest to be taken in any of our assets; or issue or amend any debt, equity or other instrument which would give the holder thereof directly or indirectly, a right in any of our assets or any right to payment equal to or superior to any right of the investors as holders of the Secured Notes in or to such assets or payment; |
● | except as described above with respect to related party transactions with officers, directors, employees or affiliates, without a consent of a majority in interest of the Secured Note holders, enter into, materially amend, materially modify or materially supplement, any agreement, transaction, commitment, or arrangement, in each case relating to the sale, transfer or assignment of any our tangible or intangible assets with any of our officers or directors (or any persons who were insiders at any time during the previous two years), or any affiliates or relatives of such persons, in a manner that materially adversely affects the rights of the investors under the transaction documents and other than the payment of salary and other compensation made in the ordinary course of our business consistent with past practices and industry standards for similarly situated entities; and |
● | not file any registration statements until there is an effective registration statement for the unrestricted resale of the Conversion Shares and June Warrant Shares. |
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● | prior to such date, the board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
● | upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
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● | on or after such date, the business combination is approved by the board of directors and authorized at an annual meeting or special meeting of stockholders and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
● | any merger or consolidation involving the corporation and the interested stockholder; |
● | any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
● | subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
● | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or |
● | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
● | permit our board of directors, or the Board, to issue up to 10,000,000 shares of preferred stock, without further action by the stockholders, with any rights, preferences and privileges as they may designate; |
● | provide that all vacancies on the Board, including newly created directorships, may, except as otherwise required by law, or as determined otherwise by resolution of the Board, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
● | do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); |
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● | set forth an advance notice procedure with regard to the nomination, other than by or at the direction of the Board, of candidates for election as directors and with regard to business to be brought before a meeting of stockholders; and |
● | provide the Board with the ability to alter its bylaws without stockholder approval. |
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CRT Capital Group LLC, or CRT Capital, is acting as the sole book-running manager of the offering and as representative of the several underwriters. We have entered into an underwriting agreement dated ________, 2013 with CRT Capital. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each underwriter named below, and each underwriter named below has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock and warrants set forth opposite its name below.
Underwriter | Number of Shares | Number of Warrants | |||
CRT Capital | |||||
Newport Coast Securities, Inc. | |||||
Total | |||||
The underwriters are committed to purchase all the shares of common stock and warrants offered by us other than those covered by the option to purchase additional shares and warrants as described below, if they purchase any shares and warrants. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriters’ obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers’ certificates and legal opinions.
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Per Share | Per Warrant | Without Over-Allotment | With Over-Allotment | |||||||||||||
Public offering price | $ | $ | $ | $ | ||||||||||||
Underwriting discount (7%) | $ | $ | $ | $ | ||||||||||||
Non-accountable expense allowance ([•]%)(1) | $ | $ | $ | $ | ||||||||||||
Proceeds, before expenses, to us | $ | $ | $ | $ |
(1) | The expense allowance of [•]% is not payable with respect to the shares and/or warrants sold upon exercise of the underwriter’s over-allotment option. |
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On June 26, 2013, LifeTech Capital acted as the placement agent in connection with our private placement of convertible debt and warrants. We paid a fee of $190,000 to LifeTech Capital as the placement agent, and issued common stock purchase warrants to LifeTech Capital to purchase 844,444 shares of common stock at an exercise price equal to $0.715 per share.
● | Stabilizing transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in progress. |
● | Overallotment transactions involve sales by the underwriter of shares in excess of the number of shares the underwriter is obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriter is not greater than the number of shares that they may purchase in the overallotment option. In a naked short position, the number of shares involved is greater than the number of shares in the overallotment option. The underwriter may close out any short position by exercising their overallotment option and/or purchasing shares in the open market. |
● | Syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriter will consider, among other things, the price of shares available for purchase in the open market as compared with the price at which they may purchase shares through exercise of the overallotment option. If the underwriter sells more shares than could be covered by exercise of the overallotment option and, therefore, have a naked short position, the position can be closed out only by buying shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in the offering. |
● | Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the shares originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions. |
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● | to Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and |
● | in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended. |
● | made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and |
● | in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
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PAGE | ||
F-1 | ||
FINANCIAL STATEMENTS: | ||
F-2 | ||
F-3 | ||
F-4 | ||
F-5 - F-6 | ||
F-7 - F-25 |
PAGE | ||
FINANCIAL STATEMENTS: | ||
F-26 | ||
F-27 | ||
F-28 - F-29 | ||
F-30 - F-39 |
/s/ Mayer Hoffman McCann P.C. | |
MAYER HOFFMAN MCCANN P.C. | |
Certified Public Accountants |
F-1 |
March 31, 2013 | March 31, 2012 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | — | $ | 7,519 | ||||
Prepaid Expenses and Other Current Assets | 64,347 | 31,520 | ||||||
Debt Issuance Cost | 286,582 | — | ||||||
Total Current Assets | 350,929 | 39,039 | ||||||
ASSETS FROM DISCONTINUED OPERATIONS | — | 130,000 | ||||||
Total Assets | $ | 350,929 | $ | 169,039 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts Payable | $ | 2,431,919 | $ | 2,020,713 | ||||
Accrued Other Expenses | 754,709 | 469,279 | ||||||
Accrued Bonuses | 101,436 | 101,436 | ||||||
Conversion Feature Liability | 162,456 | — | ||||||
Derivative Liability | 50,545 | — | ||||||
Notes Payable | 97,683 | 195,608 | ||||||
Convertible Notes Payable, net | 982,997 | — | ||||||
Notes Payable to Related Parties | 97,122 | 105,632 | ||||||
Total Liabilities | 4,678,867 | 2,892,668 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Preferred Stock – Par Value $.0001; 10,000,000 Shares Authorized; Issued and Outstanding-None | — | — | ||||||
Common Stock – Par Value $.0001; 200,000,000 Shares Authorized; 109,656,180 and 101,161,953 Issued, 104,427,992 and 95,933,765 Outstanding, Respectively | 10,966 | 10,116 | ||||||
Additional Paid-in Capital | 33,643,449 | 28,053,816 | ||||||
Accumulated Deficit | (37,977,124 | ) | (30,782,332 | ) | ||||
Treasury Stock - 5,228,188 Shares, at cost | (5,229 | ) | (5,229 | ) | ||||
Total Stockholders’ (Deficit) | (4,327,938 | ) | (2,723,629 | ) | ||||
$ | 350,929 | $ | 169,039 |
F-2 |
Year Ended March 31, | ||||||||
2013 | 2012 | |||||||
REVENUE | $ | — | $ | — | ||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 2,008,255 | 2,649,234 | ||||||
RESEARCH AND DEVELOPMENT | 1,209,318 | 2,165,968 | ||||||
Loss from Operations | (3,217,573 | ) | (4,815,202 | ) | ||||
OTHER INCOME (EXPENSE) | ||||||||
Interest Expense | (2,333,982 | ) | (35,390 | ) | ||||
Gain on Sale of Asset | — | 5,297 | ||||||
Change in Fair Value Derivative Liability | (122,945 | ) | — | |||||
Change in Fair Value of Conversion Feature Liability | (1,390,292 | ) | — | |||||
Total Other Income (Expense) | (3,847,219 | ) | (30,093 | ) | ||||
Net (Loss) from Continuing Operations | (7,064,792 | ) | (4,845,295 | ) | ||||
DISCONTINUED OPERATIONS | ||||||||
Write-down of Discontinued Operations Receivable | (130,000 | ) | (70,000 | ) | ||||
Net (Loss) from Discontinued Operations | (130,000 | ) | (70,000 | ) | ||||
Net (Loss) | $ | (7,194,792 | ) | $ | (4,915,295 | ) | ||
Basic and Diluted (Loss) Per Share: | ||||||||
Basic and Diluted (Loss) Per Share from Continuing Operations | $ | (0.07 | ) | $ | (0.06 | ) | ||
Basic and Diluted (Loss) Per Share from Discontinued Operations | $ | — | $ | — | ||||
Basic and Diluted (Loss) Per Share | $ | (0.07 | ) | $ | (0.06 | ) | ||
Basic and Diluted Weighted Average Shares Outstanding | 99,599,545 | 89,477,725 |
F-3 |
Common Stock | Additional Paid-In | Treasury Stock | Accumulated | |||||||||||||||||||||||||
Shares | Amount | Capital | Shares | Amount | Deficit | Total | ||||||||||||||||||||||
Balance March 31, 2011 | 86,818,532 | 8,682 | 24,483,918 | (5,228,188 | ) | (5,229 | ) | (25,867,037 | ) | (1,379,666 | ) | |||||||||||||||||
Common Stock Issued for Note Conversions | 4,093,101 | 409 | 818,210 | — | — | — | 818,619 | |||||||||||||||||||||
Common Stock Issued for Cash at .25 per share | 10,000,320 | 1,000 | 2,499,080 | — | — | — | 2,500,080 | |||||||||||||||||||||
Common Stock Issued for Services | 250,000 | 25 | 59,975 | — | — | — | 60,000 | |||||||||||||||||||||
Warrants Issued for Services | — | — | 21,000 | — | — | — | 21,000 | |||||||||||||||||||||
Share Based Compensation | — | — | 171,633 | — | — | — | 171,633 | |||||||||||||||||||||
Net (Loss) | — | — | — | — | — | (4,915,295 | ) | (4,915,295 | ) | |||||||||||||||||||
Balance March 31, 2012 | 101,161,953 | $ | 10,116 | $ | 28,053,816 | (5,228,188 | ) | $ | (5,229 | ) | $ | (30,782,332 | ) | $ | (2,723,629 | ) | ||||||||||||
Common Stock Issued for Note Conversions at $0.25 | 4,293,370 | 430 | 2,912,913 | — | — | — | 2,913,343 | |||||||||||||||||||||
Common Stock Issued for Note Conversions at $0.55 | 913,384 | 91 | 502,270 | — | — | — | 502,361 | |||||||||||||||||||||
Common Stock Issued for Exercised Warrants | 411,473 | 41 | (41 | ) | — | — | — | — | ||||||||||||||||||||
Common Stock Issued for Services | 100,000 | 10 | 70,990 | — | — | — | 71,000 | |||||||||||||||||||||
Common Stock Issued for Financings | 2,776,000 | 278 | 1,591,722 | — | — | — | 1,592,000 | |||||||||||||||||||||
Beneficial Conversion Feature | — | — | 347,272 | — | — | — | 347,272 | |||||||||||||||||||||
Share Based Compensation | — | — | 164,507 | — | — | — | 164,507 | |||||||||||||||||||||
Net (Loss) | — | — | — | — | — | (7,194,792 | ) | (7,194,792 | ) | |||||||||||||||||||
Balance March 31, 2013 | 109,656,180 | $ | 10,966 | $ | 33,643,449 | (5,228,188 | ) | $ | (5,229 | ) | $ | (37,977,124 | ) | $ | (4,327,938 | ) |
F-4 |
Year Ending March 31, | ||||||||
2013 | 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net (Loss) | $ | (7,194,792 | ) | $ | (4,915,295 | ) | ||
Adjustments to Reconcile Net (Loss) to Net Cash (Used in) Operating Activities: | ||||||||
Stock Issued for Interest | 75,703 | 621 | ||||||
Vesting of Options for Compensation | 164,507 | 171,633 | ||||||
Reduction in Notes Payable | (57,925 | ) | — | |||||
Change in Derivative Liability Fair Value | 122,945 | — | ||||||
Change in Conversion Feature Liability Fair Value | 1,390,292 | — | ||||||
Amortization of Discount on Notes Payable | 770,033 | — | ||||||
Amortization of Debt Issuance Cost | 1,305,418 | — | ||||||
Amortization of Stock Issued for Services | 36,792 | 364,884 | ||||||
Sales Returns Reserve Adjustment | — | (13,151 | ) | |||||
Write-down of Discontinued Operations Receivable | 130,000 | 70,000 | ||||||
Change in Assets and Liabilities: | ||||||||
(Increase) Decrease in: | ||||||||
Prepaid Expenses and Other Current Assets | 1,381 | (20,694 | ) | |||||
Increase (Decrease) in: | ||||||||
Accounts Payable | 411,207 | 757,515 | ||||||
Accrued Other Expenses | 285,430 | 238,628 | ||||||
Net Cash (Used in) Operating Activities | (2,559,009 | ) | (3,345,859 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Cash Received from Sale of Common Stock | — | 2,500,080 | ||||||
Issuance of Note Payable | 3,099,800 | — | ||||||
Payment of Notes Payable | (539,800 | ) | (390,000 | ) | ||||
(Payment of) Proceeds from Notes Payable to Related Parties | (8,510 | ) | 4,400 | |||||
Net Cash Provided by Financing Activities | 2,551,490 | 2,114,480 | ||||||
(Decrease) in Cash | (7,519 | ) | (1,231,379 | ) | ||||
Cash: | ||||||||
Beginning | 7,519 | 1,238,898 | ||||||
Ending | $ | — | $ | 7,519 |
F-5 |
Year Ending March 31, | ||||||||
2013 | 2012 | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash Paid for Interest | $ | 120,561 | $ | 33,859 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES | ||||||||
Common Stock issued for Exercised Warrants | $ | 41 | $ | — | ||||
Common Stock issued for Debt Issuance Cost | $ | 1,592,000 | $ | — | ||||
Note Payable Discounts from Derivative and Convertible Feature Liabilities | $ | 539,764 | $ | — | ||||
Additional Paid-In Capital from Notes Payable Discount | $ | 347,272 | $ | — | ||||
Conversion of Sales Return Liability to Notes Payable | $ | — | $ | 147,866 | ||||
Notes Payable converted to Common Stock | $ | 1,500,000 | $ | 818,000 | ||||
Common Stock issued for Interest | $ | 75,703 | $ | 621 | ||||
Stock Based Compensation Expense | $ | 164,507 | $ | 171,633 | ||||
Warrants Issued for Prepaid Services | $ | — | $ | 21,000 | ||||
Common Stock Issued for Prepaid Services | $ | 71,000 | $ | 60,000 | ||||
Additional Paid-In Capital Resulting from Reduction in Derivative and Conversion Feature Liabilities | $ | 1,840,000 | $ | — | ||||
Reduction in Notes Payable | $ | 57,925 | $ | — |
F-6 |
F-7 |
F-8 |
F-9 |
2013 | 2012 | |||||||
Prepaid Insurance | $ | 4,000 | $ | 3,750 | ||||
Prepaid Rent | 10,827 | 10,827 | ||||||
Prepaid Consulting Fees | 47,333 | 13,125 | ||||||
Other Current Assets | 2,187 | 3,818 | ||||||
$ | 64,347 | $ | 31,520 |
F-10 |
F-11 |
F-12 |
F-13 |
F-14 |
Level 1: | Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
Level 2: | Observable inputs other that Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in inactive markets; or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data. | |
Level 3: | Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
Derivative Liability | Convertible Feature Liability | Total | ||||||||||
Balance, April 1, 2012 | $ | — | — | — | ||||||||
Fair Value at Issuance | 82,709 | 457,055 | 539,764 | |||||||||
Net Change in Fair Value | 122,945 | 1,390,292 | 1,513,237 | |||||||||
Conversion of Debt | (155,109 | ) | (1,684,891 | ) | (1,840,000 | ) | ||||||
Balance, March 31, 2013 | $ | 50,545 | $ | 162,456 | $ | 213,001 |
F-15 |
F-16 |
Amount | Date due | |
$50,000 | Within 30 days of commencement of Phase I/II clinical trial. | |
50,000 | Within 30 days of commencement of a separate Phase II trial as required by the FDA. | |
300,000 | Within 30 days of commencement of a Phase III trial. | |
500,000 | Within 30 days of submission of a biological license application or a new drug application with the FDA. |
F-17 |
1. | Forty percent (40%) of amounts received under each agreement entered into before an Investigational New Drug (“IND”) application is filed by the Company with the Federal Drug Administration (“FDA”) for a Product made a subject of the sublicense. |
2. | Thirty percent (30%) of amounts received under each agreement entered into after the filing of an IND under item (1) above until completion of a Phase 1 clinical trial by the Company for that Product. |
3. | Twenty-five percent (25%) of amounts received under each agreement entered into after completion of item (2) above until completion of a Phase II clinical trial by the Company for that Product. |
4. | Twenty percent (20%) of amounts received under each agreement entered into after completion of item (3) above until a New Drug Application (“NDA”) has been approved by the FDA for that Product. |
5. | Ten percent (10%) of amounts received under each agreement entered into after the NDA has been approved by the FDA for that Product. |
1. | $25,000 upon the filing of the first IND or comparable regulatory filing for a human therapeutic Product. |
2. | $150,000 upon the enrollment of its first patient under a Phase II clinical trial for the first human therapeutic Product. |
3. | $200,000 upon the enrollment of its first patient under a Phase III clinical trial for the first human therapeutic Product. |
4. | $250,000 for the first NDA or comparable regulatory approval for a human therapeutic Product. |
1. | A license issue fee of $10,000, within 30 days after the effective date. |
2. | License maintenance fees of $10,000 per year and payable on the first through third anniversary of the effective date and $20,000 annually thereafter on each anniversary until commercially selling a licensed product. |
3. | Milestone payments in the amounts payable according to the following schedule or events: |
(i) | $25,000 upon dosing of 50% of the patients expected to be enrolled for a Phase I clinical trial for the first indication (if such a trial is needed) of a licensed product; |
(ii) | $25,000 upon the filing of an IND for the second indication of a licensed product; |
F-18 |
(iii) | $100,000 upon dosing of the first patient and $150,000 upon dosing of the 40th patient in a Phase II clinical trial for the first indication of a licensed product; |
(iv) | $250,000 upon dosing of the first patient for a Phase II clinical trial for the second indication of a licensed product; |
(v) | $600,000 upon dosing of the first patient for a Phase III clinical trial for the first indication of a licensed product; |
(vi) | $600,000 upon dosing of the first patient for a Phase III clinical trial for the second indication of a licensed product; |
(vii) | $1,000,000 upon receipt of US regulatory approval for each indication of a licensed product. |
F-19 |
F-20 |
F-21 |
2009 Equity Incentive Plan | Weighted Average Exercise Price | Weighted Average Remaining Contract Life | Non-Plan Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contract Life | |||||||||||||||||||
Balance as of April 1, 2011 | 3,550,398 | $ | 0.26 | 9.34 years | 100,714 | $ | 41.27 | 2.61 years | ||||||||||||||||
Options Granted | 1,680,000 | $ | 0.19 | 9.24 years | — | — | ||||||||||||||||||
Options Exercised | — | — | — | — | ||||||||||||||||||||
Options Canceled | — | — | — | — | ||||||||||||||||||||
Balance as of March 31, 2012 | 5,230,398 | $ | 0.24 | 8.69 years | 100,714 | $ | 41.27 | 1.60 years | ||||||||||||||||
Options Granted | 1,493,184 | $ | 0.68 | 9.91 years | — | — | ||||||||||||||||||
Options Exercised | — | — | — | — | ||||||||||||||||||||
Options Canceled | — | — | — | — | ||||||||||||||||||||
Balance as of March 31, 2013 | 6,723,582 | $ | 0.34 | 8.18 years | 100,714 | $ | 41.27 | 0.60 years | ||||||||||||||||
Exercisable at March 31, 2013 | 4,653,437 | $ | 0.25 | 7.69 years | 100,714 | $ | 41.27 | 0.60 years |
Warrants | 1,800,505 | |||
Non-Plan Stock Options | 100,714 | |||
2009 Equity Incentive Plan | 23,239,344 | |||
Total Shares Reserved | 25,140,563 |
F-22 |
Warrant Shares | Exercise Price Per Share | Date Issued | Expiration Date | ||||||||
Biosyn Warrants | 4,105 | $ | 57.97 - $173.92 | October 22, 2004 | January 4, 2014 | ||||||
Investor Warrants | 275,000 | $ | 0.30 | September 15, 2010 | September 15, 2015 | ||||||
Old Adamis Warrants | 1,000,000 | $ | 0.50 | November 15, 2007 | November 15, 2015 | ||||||
Consultant Warrants | 221,400 | $ | 0.20 | January 29, 2010 | January 25, 2015 | ||||||
Consultant Warrants | 300,000 | $ | 0.22 | July 11, 2011 | July 11, 2016 | ||||||
Total Warrants | 1,800,505 |
2013 | 2012 | |||||||
Current | $ | — | $ | — | ||||
Deferred | (2,707.000 | ) | 1,212,000 | |||||
Total | (2,707.000 | ) | 1,212,000 | |||||
Change in Valuation Allowance | 2,707,000 | (1,212,000 | ) | |||||
Tax Benefit, net | $ | — | $ | — |
F-23 |
2013 | 2012 | |||||||
Net Operating Loss Carry forwards | $ | 43,458,000 | $ | 40,945,000 | ||||
Deferred Tax Assets | 579,000 | 385,000 | ||||||
Net Deferred Tax Assets | 44,037,000 | 41,330,000 | ||||||
Less Valuation Allowance | (44,037,000 | ) | (41,330,000 | ) | ||||
Net Deferred Tax Assets | $ | — | $ | — |
2013 | 2012 | |||||||||||
Net (Loss) | $ | (7,195,000 | ) | $ | (4,915,000 | ) | ||||||
Permanent Differences: | ||||||||||||
Non-Cash Interest | — | 1,000 | ||||||||||
Meals and Entertainment | 2,000 | 4,000 | ||||||||||
$ | (7,193,000 | ) | $ | (4,910,000 | ) | |||||||
Federal Statutory Rate | 34.00 | % | $ | (2,446,000 | ) | $ | (1,671,000 | ) | ||||
State Income Tax, net of Federal Tax | 3.63 | % | (261,000 | ) | (178,000 | ) | ||||||
Permanent Differences | 37.63 | % | — | 3,060,000 | ||||||||
Change in Valuation Allowance | 2,707,000 | (1,211,000 | ) | |||||||||
Expected Tax Benefit | $ | — | $ | — |
F-24 |
F-25 |
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2013 | ||||||||
ASSETS | (Unaudited) | March 31, 2013 | ||||||
CURRENT ASSETS | ||||||||
Cash | $ | 119,579 | $ | — | ||||
Prepaid Expenses and Other Current Assets | 55,100 | 64,347 | ||||||
Non-refundable Deposit | 3,000,000 | — | ||||||
Debt Issuance Cost | 347,986 | 286,582 | ||||||
Total Assets | $ | 3,522,665 | $ | 350,929 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts Payable | $ | 2,335,177 | $ | 2,431,919 | ||||
Accrued Other Expenses | 562,322 | 754,709 | ||||||
Accrued Bonuses | 101,436 | 101,436 | ||||||
Conversion Feature Derivative, at fair value | 381,026 | 162,456 | ||||||
Down-round Protection Derivative, at fair value | 730,843 | 50,545 | ||||||
Warrant Derivative, at fair value | 377,126 | — | ||||||
Warrant Down-round Protection Derivative, at fair value | 771,156 | — | ||||||
Convertible Notes Payable, net | 561,295 | 982,997 | ||||||
Secured Convertible Prommisory Notes, net | 2,456,393 | — | ||||||
Other Notes Payable | 97,683 | 97,683 | ||||||
Notes Payable to Related Party | 81,232 | 97,122 | ||||||
Total Liabilities | 8,455,689 | 4,678,867 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Preferred Stock – Par Value $.0001; 10,000,000 Shares | ||||||||
Authorized; Issued and Outstanding-None | — | — | ||||||
Common Stock – Par Value $.0001; 200,000,000 Shares Authorized; | ||||||||
110,104,597 and 109,656,180 Issued, 104,876,409 and 104,427,992 Outstanding, Respectively | 11,011 | 10,966 | ||||||
Additional Paid-in Capital | 34,112,775 | 33,643,449 | ||||||
Accumulated Deficit | (39,051,581 | ) | (37,977,124 | ) | ||||
Treasury Stock - 5,228,188 Shares, at cost | (5,229 | ) | (5,229 | ) | ||||
Total Stockholders’ (Deficit) | (4,933,024 | ) | (4,327,938 | ) | ||||
$ | 3,522,665 | $ | 350,929 |
F-26 |
Three Months Ended | Six Months Ended | |||||||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
REVENUE | $ | — | $ | — | $ | — | $ | — | ||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 762,078 | 429,742 | 1,277,322 | 1,047,108 | ||||||||||||
RESEARCH AND DEVELOPMENT | 194,954 | 421,403 | 419,470 | 528,760 | ||||||||||||
Loss from Operations | (957,032 | ) | (851,145 | ) | (1,696,792 | ) | (1,575,868 | ) | ||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest Expense | (2,777,575 | ) | (579,330 | ) | (3,182,459 | ) | (874,295 | ) | ||||||||
Change in Fair Value Derivative Liabilities | (244,198 | ) | (105,636 | ) | (203,653 | ) | (77,036 | ) | ||||||||
Change in Fair Value of Conversion Feature Liability | 2,542,344 | 678,636 | 2,603,981 | (1,056,673 | ) | |||||||||||
Change in Fair Value of Warrants Liability | 1,404,466 | — | 1,404,466 | — | ||||||||||||
Total Other Income (Expense) | 925,037 | (6,330 | ) | 622,335 | (2,008,004 | ) | ||||||||||
Net (Loss) | $ | (31,995 | ) | $ | (857,475 | ) | (1,074,457 | ) | $ | (3,583,872 | ) | |||||
Basic and Diluted Gain (Loss) Per Share | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | |||||
Basic and Diluted Weighted Average Shares Outstanding | 104,875,832 | 98,293,417 | 104,659,058 | 97,743,066 |
F-27 |
Six Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
(Unaudited) | (Unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net (Loss) | $ | (1,074,457 | ) | $ | (3,583,872 | ) | ||
Adjustments to Reconcile Net (Loss) to Net | ||||||||
Cash (Used in) Operating Activities: | ||||||||
Vesting of Options for Compensation | 145,871 | 74,134 | ||||||
Change in Derivative Liabilities Fair Value | 203,653 | 77,036 | ||||||
Change in Conversion Feature Liability Fair Value | (2,603,981 | ) | (1,401,056,673 | |||||
Change in Warrant Liability Fair Value | (1,404,466 | ) | ||||||
Amortization of Discount on Notes Payable | 2,534,691 | 359,142 | ||||||
Amortization of Debt Issuance Costs | 444,445 | 427,506 | ||||||
Amortization of Stock Issued for Services | 35,500 | — | ||||||
Change in Assets and Liabilities: | ||||||||
(Increase) Decrease in: | ||||||||
Prepaid Expenses and Other Current Assets | (26,253 | ) | (29,904 | ) | ||||
Increase (Decrease) in: | ||||||||
Accounts Payable | (96,742 | ) | (176,709 | ) | ||||
Accrued Other Expenses | (140,443 | ) | (137,036 | ) | ||||
Net Cash (Used in) Operating Activities | (1,982,182 | ) | (1,933,030 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Payments of Non-refundable deposit | (3,000,000 | ) | — | |||||
Net Cash (Used in) Investing Activities | (3,000,000 | ) | — | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from Notes Payable | 5,875,000 | 2,000,000 | ||||||
Payment of Notes Payable | (471,000 | ) | (40,000 | ) | ||||
Cash Paid for Debt Issuance Costs | (286,349 | ) | — | |||||
Payment of Notes Payable to Related Parties | (15,890 | ) | (24,400 | ) | ||||
Net Cash Provided by Financing Activities | 5,101,761 | 1,935,600 | ||||||
Increase in Cash | 119,579 | 2,570 | ||||||
Cash: | ||||||||
Beginning | — | 7,519 | ||||||
Ending | $ | 119,579 | $ | 10,089 |
F-28 |
Six Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
(Unaudited) | (Unaudited) | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash Paid for Interest | $ | 208,667 | $ | 13,056 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES | ||||||||
Common Stock issued for Exercised Warrants and/or Options | $ | 25 | $ | 41 | ||||
Common Stock issued for Debt Issuance Cost | $ | — | $ | 990,000 | ||||
Note Payable Discounts from Deriviative and Convertible Feature Liabilities, and Warrants | $ | 5,962,763 | $ | 539,764 | ||||
Additional Paid-In Capital from Notes Payable Discount | $ | — | $ | 172,727 | ||||
Accrued Interest Applied to Principal Balance | $ | 51,944 | $ | — | ||||
Notes Payable Converted to Common Stock | $ | 104,000 | $ | — | ||||
Stock Based Compensation Expense | $ | 145,871 | $ | 74,134 | ||||
Warrants Issued for Debt Costs | $ | 219,500 | $ | — | ||||
Settlement of Derivative Liability though Modification of Note | $ | 110,818 | $ | — |
F-29 |
F-30 |
F-31 |
F-32 |
F-33 |
Level 1: | Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
Level 2: | Observable inputs other that Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in inactive markets; or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data. | |
Level 3: | Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
F-34 |
Convertible | Warrant | |||||||||||||||||||
Down-round | Feature | Warrant | Down-round | |||||||||||||||||
Protection Derivative | Derivative | Derivative | Protection Derivative | Total | ||||||||||||||||
Balance, March 31, 2013 | $ | (50,545 | ) | $ | (162,456 | ) | $ | — | $ | — | $ | (213,001 | ) | |||||||
Net Change in Fair Value | 40,545 | 61,637 | — | — | 102,182 | |||||||||||||||
Settlement Through Modification of Gemini Note II | 10,000 | 100,819 | — | — | 110,819 | |||||||||||||||
Fair Value at Issuance of Secured Notes | (641,113 | ) | (2,923,370 | ) | (1,781,592 | ) | (616,688 | ) | (5,962,763 | ) | ||||||||||
Balance at June 30, 2013 | (641,113 | ) | (2,923,370 | ) | (1,781,592 | ) | (616,688 | ) | (5,962,763 | ) | ||||||||||
Net Change in Fair Value | (89,730 | ) | 2,542,344 | 1,404,466 | (154,468 | ) | 3,702,612 | |||||||||||||
Balance at September 30, 2013 | $ | (730,843 | ) | $ | (381,026 | ) | $ | (377,126 | ) | $ | (771,156 | ) | $ | (2,260,151 | ) |
Fair Value at 9/30/2013 | Valuation Technique | Unobservable Input | Range | ||||||||
Conversion Feature Derivative and Down-round Protection Derivative (combined) | $ | 1,111,869 | Binomial Option Pricing Model | Probability of common stock issuance at prices less than conversion prices stated in agreements | 80 | % | |||||
Warrant Derivative and Warrant Down-round Protection Derivative (combined) | $ | 1,148,282 | Binomial Option Pricing Model | Probability of common stock issuance at prices less than exercise prices stated in agreements | 80 | % |
F-35 |
F-36 |
F-37 |
Number of Stock Options | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number of Stock Options Vested | ||||||||||
Non-Plan Stock Options | 100,714 | .10 Years | $ | 41.27 | 100,714 | ||||||||
2009 Equity Incentive Plan | 6,773,582 | 5.44 Years | $ | 0.34 | 5,398,706 |
Warrant Shares | Exercise Price Per Share | Date Issued | Expiration Date | |||||
Biosyn Warrants | 4,105 | $ | 57.97 - $173.92 | October 22, 2004 | January 4, 2014 | |||
Old Adamis Warrants | 1,000,000 | $ | 0.50 | November 15, 2007 | November 15, 2015 | |||
Consultant Warrants | 10,800 | $ | 0.20 | January 29, 2010 | January 29, 2015 | |||
2013 Private Placement | 14,223,763 | 0.715 | June 26, 2013 | June 25, 2018 | ||||
Consultant Warrants | 300,000 | $ | 0.22 | July 11, 2011 | July 11, 2016 | |||
Total Warrants | 15,538,668 |
Warrants | 15,538,668 | |||
Non-Plan Stock Options | 100,714 | |||
2009 Equity Incentive Plan | 23,239,344 | |||
Total Shares Reserved | 38,878,726 |
F-38 |
F-39 |
Item | Amount | |||
SEC registration fee | $ | 3,422 | ||
FINRA filing fee | $ | 4,485 | ||
Nasdaq initial listing fee | * | |||
Legal fees and expenses | * | |||
Accounting fees and expenses | $ | |||
Printing and engraving expenses | * | |||
Transfer agent and registrar fees and expenses | * | |||
Miscellaneous fees and expenses | * | |||
Total: | $ | * |
* | To be completed by amendment. |
● | any breach of the director’s duty of loyalty to the corporation or its stockholders; |
● | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
● | payments of unlawful dividends or unlawful stock repurchases or redemptions; or |
● | any transaction from which the director derived an improper personal benefit. |
-1- |
-2- |
-3- |
-4- |
-5- |
ADAMIS PHARMACEUTICALS CORPORATION | ||
By: | /s/ Dennis J. Carlo, Ph.D. | |
Dennis J. Carlo, Ph.D. | ||
Chief Executive Officer and Director |
Name | Title | Date | ||
Principal Executive Officer: | ||||
/s/ DENNIS J. CARLO | Chief Executive Officer and Director | November 25, 2013 | ||
Dennis J. Carlo | ||||
Principal Financial Officer and Principal Accounting Officer: | ||||
/s/ ROBERT O. HOPKINS | Vice President, Finance, Chief Financial Officer and Secretary | November 25, 2013 | ||
Robert O. Hopkins | ||||
Directors: | ||||
/s/ DAVID J. MARGUGLIO | Director | November 25, 2013 | ||
David J. Marguglio | ||||
/s/ * | Director | November 25, 2013 | ||
/s/ * | Director | November 25, 2013 | ||
/s/ * | Director | November 25, 2013 |
* By: /s/ ROBERT O. HOPKINS
Robert O. Hopkins
Attorney-infact
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Filed Herewith | Form/ File No. | Date | ||||
1.1 | Form of Underwriting Agreement** | |||||||
2.1 | Agreement and Plan of Share Exchange dated as of October 7, 2004, by and between the Company and Biosyn, Inc. | 8-K | 10/26/04 | |||||
3.1 | Amended and Restated Certificate of Incorporation of the Registrant | 8-K | 04/03/09 | |||||
3.2 | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant | 10-K | 07/03/13 | |||||
3.3 | Form of Proposed Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registration** | |||||||
4.0 | Amended and Restated Bylaws of the Company | S-4/A 333-155322 | 01/12/09 | |||||
4.1 | Specimen stock certificate for common stock | 8-K | 04/03/09 | |||||
4.2 | Form of Underwriter Warrant** | |||||||
4.3 | Form of Warrant Agency Agreement by and between Adamis Pharmaceuticals Corporation and __________, and Form of Warrant Certificate ** | |||||||
5.1 | Opinion of Weintraub Tobin Chediak Coleman Grodin, Law Corporation** | |||||||
*10.1 | 1995 Equity Incentive Plan | 10-Q | 08/13/02 | |||||
*10.2 | 2005 Equity Incentive Plan | 10-K | 03/31/06 | |||||
*10.3 | Form of Option Agreement under the 2005 Equity Incentive Plan | 10-K | 03/31/06 | |||||
*10.4 | 2009 Equity Incentive Plan | 8-K | 01/13/11 | |||||
*10.5 | Form of Stock Option Agreement for option awards | 8-K | 09/16/11 | |||||
*10.6 | Form of Option Agreement for Non-Employee Directors* | 8-K | 01/13/11 | |||||
*10.7 | Form of Indemnity Agreement with directors and executive officers | 8-K | 01/13/11 | |||||
10.8 | Agreement dated as of October 8, 1996 by and among Biosyn, Inc., Edwin B. Michaels and E.B. Michaels Research Associates, Inc. (Confidential treatment has been requested with respect to portions of this agreement.) | 10-K | 03/31/05 | |||||
10.9 | Patent License Agreement by and among Biosyn, Inc., and certain agencies of the United States Public Health Service | 10-K | 03/31/05 | |||||
10.10 | License Agreement dated as of May 22, 2001, by and between Crompton Corporation and Biosyn, Inc. (Confidential treatment has been requested for portions of this agreement.) | 10-K | 03/31/05 | |||||
10.11 | License Agreement dated January 30, 2006, by and between CONRAD, Eastern Virginia Medical School, and Biosyn, Inc. (Confidential treatment has been requested for portions of this agreement.) | 10-K | 04/02/07 | |||||
10.12 | Amendment to License Agreement dated as of March 15, 2006, by and between Crompton Corporation and Biosyn, Inc. | S-4/A 333-155322 | 01/12/09 | |||||
10.13 | Funding Agreement dated October 12, 1992, by and between Ben Franklin Technology Center of Southeastern Pennsylvania and Biosyn, Inc. | S-4/A 333-155322 | 01/12/09 | |||||
10.14 | License Agreement dated July 28, 2006, by and between Nevagen, LLC and Adamis Pharmaceuticals Corporation | S-4/A 333-155322 | 01/12/09 |
-i- |
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Filed Herewith | Form/ File No. | Date | ||||
10.15 | Amendment to License Agreement dated December 29, 2008, by and between Nevagen, LLC and Adamis Pharmaceuticals Corporation | S-4/A 333-155322 | 01/12/09 | |||||
10.16 | Amendment to License Agreement dated October 18, 2007, by and between CONRAD, Eastern Virginia Medical School, and Biosyn, Inc. | S-4/A 333-155322 | 01/12/09 | |||||
10.17 | Clinical Trial Agreement between Biosyn, Inc. and the National Institute of Child Health and Human Development | S-4/A 333-155322 | 01/12/09 | |||||
10.18 | Common Stock Purchase Agreement dated as of November 10, 2010, by and between Adamis Pharmaceuticals Corporation and the Purchaser named therein (Confidential treatment has been granted for portions of this exhibit.) | 8-K | 11/12/10 | |||||
10.19 | Registration Rights Agreement dated as of November 10, 2010, by and between Adamis Pharmaceuticals Corporation and the Purchaser named therein | 8-K | 11/12/10 | |||||
10.20 | Employment Agreement between the Company and Dennis J. Carlo* | 8-K | 11/12/10 | |||||
10.21 | Employment Agreement between the Company and David J. Marguglio* | 8-K | 11/12/10 | |||||
10.22 | Employment Agreement between the Company and Robert O. Hopkins* | 8-K | 11/12/10 | |||||
10.23 | Product Development and Contract Manufacturing Agreement dated November 1, 2010, between Adamis and Beximco | 10-Q | 02/14/11 | |||||
10.24 | License Agreement between Adamis, the Regents of the University of California and Dana-Farber Cancer Institute, Inc. | 10-K | 07/07/11 | |||||
10.25 | License Agreement dated January 26, 2007, with Wisconsin Alumni Research Foundation | 10-K | 07/07/11 | |||||
10.26 | License Agreement dated January 26, 2007, with Wisconsin Alumni Research Foundation | 10-K | 07/07/11 | |||||
10.27 | License Agreement dated January 2, 2008, with Wisconsin Alumni Research Foundation | 10-K | 07/07/11 | |||||
10.28 | First Amendment to Common Stock Purchase Agreement dated as of June 30, 2011, by and between the Company and Eses Holdings (FZE) | 10-K | 07/07/11 | |||||
10.29 | Second Amendment to Common Stock Purchase Agreement dated as of November 10, 2011, by and between the Company and Eses Holdings (FZE) | 8-K | 11/21/11 | |||||
10.30 | Third Amendment to Common Stock Purchase Agreement dated as of January 31, 2012, by and between the Company and Eses Holdings (FZE) | 10-Q | 02/14/12 | |||||
10.31 | Securities Purchase Agreement dated as of April 2, 2012 | 8-K | 04/05/12 | |||||
10.32 | 10% Senior Convertible Note dated as of April 2, 2012 | 8-K | 04/05/12 | |||||
10.33 | Form of Subsidiary Guarantee dated as of April 2, 2012 | 8-K | 04/05/12 | |||||
10.34 | Securities Purchase Agreement dated as of June 11, 2012 | 8-K | 06/15/12 | |||||
10.35 | 10% Senior Convertible Note dated as of June 11, 2012 | 8-K | 06/15/12 | |||||
10.36 | Form of Subsidiary Guarantee dated as of June 11, 2012 | 8-K | 06/15/12 | |||||
10.37 | Convertible Promissory Note dated as of June 11, 2012 | 8-K | 06/15/12 | |||||
10.38 | Zero Coupon Secured Promissory Note dated October 25, 2012 | 10Q | 02/19/13 | |||||
10.39 | Convertible Promissory Note dated December 31, 2012 | 10-Q | 02/19/13 | |||||
10.40 | Securities Purchase Agreement dated as of April 5, 2013 | 8-K | 04/08/13 | |||||
10.41 | 12% Convertible Debenture dated April 5, 2013 | 8-K | 04/08/13 |
-ii- |
Incorporated by Reference | ||||||||
Exhibit Number | Exhibit Description | Filed Herewith | Form/ File No. | Date | ||||
10.42 | Subscription Agreement dated as of June 26, 2013 | 8-K | 07/01/13 | |||||
10.43 | Form of Secured Convertible Notes dated June 26, 2013 | 8-K | 07/01/13 | |||||
10.44 | Form of Warrants dated June 26, 2013 | 8-K | 07/01/13 | |||||
10.45 | Security Agreement dated June 26, 2013 | 8-K | 07/01/13 | |||||
10.46 | Intercreditor Agreement dated June 26, 2013 | 8-K | 07/01/13 | |||||
10.47 | Consent and Waiver | 8-K | 10/31/13 | |||||
10.48 | Exclusive License and Asset Purchase Agreement dated as of August 1, 2013, by and among the Registrant, 3M Corp. and 3M Innovative Properties Company | 8-K | 08/06/13 | |||||
10.49 | Sublease dated as of March 12, 2011 between the Registrant and Whitney, Bradley & Brown, Inc. | S-1 | 11/15/2013 | |||||
21.1 | Subsidiaries of the Registrant | 10-K | 07/03/13 | |||||
23.1 | Consent of Mayer Hoffman McCann P.C., Independent Registered Public Accounting Firm | X | ||||||
23.2 | Consent of Weintraub Tobin Chediak Coleman Grodin, Law Corporation** | |||||||
24.1 | Power of Attorney** |
* | Represents a compensatory plan or arrangement. |
** | To be filed by amendment. |