Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 09, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Adamis Pharmaceuticals Corp | |
Entity Central Index Key | 887,247 | |
Document Type | 10-Q | |
Trading Symbol | ADMP | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 47,291,358 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 32,034,584 | $ 17,323,241 |
Restricted Cash | 1,009,461 | |
Accounts Receivable, net | 1,195,959 | 830,090 |
Inventories, net | 3,218,678 | 1,824,558 |
Prepaid Expenses and Other Current Assets | 1,252,007 | 474,180 |
Total Current Assets | 37,701,228 | 21,461,530 |
LONG TERM ASSETS | ||
Security Deposits | 54,655 | 54,655 |
Intangible Assets, net | 13,829,619 | 15,686,687 |
Goodwill | 7,640,622 | 7,640,622 |
Fixed Assets, net | 9,203,278 | 6,559,664 |
Other Non-Current Assets | 1,800,000 | |
Total Assets | 70,229,402 | 51,403,158 |
CURRENT LIABILITIES | ||
Accounts Payable | 3,457,149 | 2,919,120 |
Deferred Revenue | 1,014,707 | 14,758 |
Accrued Other Expenses | 3,396,259 | 2,300,672 |
Accrued Bonuses | 1,343,493 | 1,069,021 |
Bank Loans - Line of Credit | 2,000,000 | |
Bank Loans - Building and Equipment, current portion | 2,672,033 | 483,992 |
Total Current Liabilities | 11,883,641 | 8,787,563 |
LONG TERM LIABILITIES | ||
Deferred Tax Liability, net | 485,002 | 485,002 |
Building and Equipment Loans, net of current portion | 34,026 | 2,583,109 |
Total Liabilities | 12,402,669 | 11,855,674 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common Stock - Par Value $.0001; 100,000,000 Shares Authorized; 47,814,315 and 33,696,920 Issued, 47,291,358 and 33,389,380 Outstanding at September 30, 2018 and December 31, 2017, Respectively | 4,781 | 3,369 |
Additional Paid-in Capital | 198,020,815 | 153,546,932 |
Accumulated Deficit | (140,193,613) | (113,997,588) |
Treasury Stock, at cost - 522,957 and 307,540 Shares at September 30, 2018 and December 31, 2017, Respectively | (5,250) | (5,229) |
Total Stockholders' Equity | 57,826,733 | 39,547,484 |
Total Liabilities and Stockholders' Equity | $ 70,229,402 | $ 51,403,158 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common Stock, par value (in dollars per share) | $ 0.0001 | $ .0001 |
Common Stock, authorized | 100,000,000 | 100,000,000 |
Common Stock, issued | 47,814,315 | 33,696,920 |
Common Stock, outstanding | 47,291,358 | 33,389,380 |
Treasury Stock, shares | 522,957 | 307,540 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
REVENUE, net | $ 3,832,935 | $ 3,388,221 | $ 10,932,736 | $ 10,231,426 |
COST OF GOODS SOLD | 2,300,432 | 2,092,270 | 6,757,989 | 5,638,283 |
Gross Profit | 1,532,503 | 1,295,951 | 4,174,747 | 4,593,143 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 6,534,746 | 5,747,572 | 19,371,492 | 16,975,376 |
RESEARCH AND DEVELOPMENT | 3,908,408 | 1,248,187 | 10,993,111 | 3,943,934 |
LOSS ON IMPAIRMENT OF FIXED ASSETS | 96,346 | 96,346 | ||
Loss from Operations | (8,910,651) | (5,796,154) | (26,189,856) | (16,422,513) |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (30,653) | (52,635) | (132,755) | (179,540) |
Interest Income | 66,020 | 39,710 | 126,586 | 48,975 |
Inducement Expense for Exercise of Warrants | (960,230) | (960,230) | ||
Total Other Income (Expense), net | 35,367 | (973,155) | (6,169) | (1,090,795) |
Net (Loss) | $ (8,875,284) | $ (6,769,309) | $ (26,196,025) | $ (17,513,308) |
Basic and Diluted (Loss) Per Share: | ||||
Basic and Diluted (Loss) Per Share (in dollars per share) | $ (0.21) | $ (0.21) | $ (0.72) | $ (0.66) |
Basic and Diluted Weighted Average Shares Outstanding (in shares) | 42,085,852 | 31,509,050 | 36,320,142 | 26,651,249 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (Loss) | $ (26,196,025) | $ (17,513,308) |
Adjustments to Reconcile Net (Loss) to Net Cash (Used in) Operating Activities: | ||
Stock Based Compensation | 4,859,453 | 4,502,093 |
Inducement Expense for Exercise of Warrants | 960,230 | |
Provision for Bad Debts | 98,710 | 73,384 |
Depreciation and Amortization Expense | 2,320,148 | 2,318,417 |
Loss on Impairment of Fixed Assets | 96,346 | |
(Gain) on Sale of Fixed Assets | (758) | |
(Increase) Decrease in: | ||
Accounts Receivable - Trade | (464,579) | (269,198) |
Inventories | (1,394,120) | (54,021) |
Prepaid Expenses and Other Current Assets | (777,827) | 17,131 |
Other Non-Current Assets | (300,000) | |
Increase (Decrease) in: | ||
Accounts Payable | 603,119 | (400,290) |
Deferred Revenue | 999,949 | (17,088) |
Accrued Other Expenses and Bonuses | (129,941) | 400,315 |
Net Cash (Used in) Operating Activities | (20,381,871) | (9,885,989) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Equipment | (3,171,026) | (1,456,841) |
Purchase of Intangibles | (25,837) | |
Net Cash (Used in) Investing Activities | (3,171,026) | (1,482,678) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Common Stock, net of issuance cost | 37,619,759 | 16,036,134 |
Proceeds from Exercise of Warrants, net of exercise cost | 16,766,650 | |
(Payments) of Bank Loans | (364,980) | (2,212,583) |
Net Cash Provided by Financing Activities | 37,254,779 | 30,590,201 |
Increase in Cash and Restricted Cash | 13,701,882 | 19,221,534 |
Cash and Restricted Cash: | ||
Beginning | 18,332,702 | 5,095,760 |
Ending | 32,034,584 | 24,317,294 |
RECONCILIATION OF CASH AND RESTRICTED CASH | ||
Cash | 32,034,584 | 23,312,476 |
Restricted Cash | 1,004,818 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash Paid for Income Taxes | 8,650 | 13,645 |
Cash Paid for Interest | 156,149 | $ 182,823 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING, FINANCING AND INVESTING ACTIVITIES | ||
Decrease in Accrued Capital Expenditures | (65,090) | |
Exercise of Warrants for Payment of Working Capital Line | 1,996,062 | |
Acquisition of Treasury Shares in Connection with Warrant Exercise | $ 21 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1: Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments and the elimination of intercompany accounts) considered necessary for a fair statement of all periods presented. The results of operations of Adamis Pharmaceuticals Corporation (“the Company”) for any interim periods are not necessarily indicative of the results of operations for any other interim periods or for a full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Inventories Inventories are valued at the lower of cost or net realizable value (“NRV”). The cost of inventories is determined using the first-in, first-out (“FIFO”) method. Inventories consist of compounding formulation raw materials, currently marketed products, and device supplies. A reserve for obsolescence is recorded monthly based on a review of inventory for obsolescence. Liquidity and Capital Resources The Company’s cash balance was $32,034,584 and $18,332,702 at September 30, 2018 and December 31, 2017, respectively. The December 31, 2017 cash balance includes approximately $1.0 million in restricted cash held by the Bear State Bank, N.A. as collateral for a $2.0 million working capital line. The Company prepared the condensed consolidated financial statements assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. In preparing these condensed consolidated financial statements, consideration was given to the Company’s future business as described below, which may preclude the Company from realizing the value of certain assets. The Company has significant operating cash flow deficiencies. Additionally, the Company may require additional funding for future operations and the expenditures that it believes will be required to support commercialization of its products and conduct the clinical and regulatory activities relating to the Company’s product candidates, satisfy existing obligations and liabilities, and otherwise support the Company’s intended business activities and working capital needs. The preceding conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include attempting to secure additional required funding through equity or debt financings, sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research, development or commercialization efforts, or similar transactions. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. Basic and Diluted (Loss) per Share The Company computes basic loss per share by dividing the loss attributable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The diluted loss per share calculation is based on the treasury stock method and gives effect to dilutive options, warrants, convertible notes, convertible preferred stock and other potential dilutive common stock. Except as noted below, the effect of common stock equivalents was anti-dilutive and was excluded from the calculation of weighted average shares outstanding. Potential dilutive securities, which are not included in dilutive weighted average shares as of September 30, 2018 and September 30, 2017 consist of outstanding equity classified warrants (2,166,995 and 3,189,052, respectively), outstanding options (9,339,037 and 6,598,817, respectively), and outstanding restricted stock units (1,642,212 and 1,300,000, respectively). Recently Adopted Accounting Pronouncement Utilizing the deferred effective date of January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Company evaluated the impact that adoption of this new standard will have on its consolidated financial statements and determined that the timing of revenue recognition and amount of revenue recognized is not materially impacted under the new standard. Accordingly, it did not have a material quantitative impact on the Company’s revenue recognition relating to sales of compounded pharmacy formulations and other pharmacy products by U.S. Compounding, Inc. (“USC”), a subsidiary. The Company also determined that the modified retrospective adoption will have no impact on either the timing or amount of prior period revenues. As a result, any comparative information has not been restated. Refer to Note 2 for further details. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non employee Share-Based Payment Accounting. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is still currently assessing the impact of this new guidance but does not expect adoption will have a material impact on its condensed consolidated financial statements. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 2: Revenues Revenue Recognition Revenue is recognized pursuant to ASC Topic 606, “ Revenue from Contracts with Customers 1. Identify the contract with the customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) each performance obligation is satisfied Currently, the Company’s revenues are entirely attributed to its USC subsidiary. The only performance obligation identified with the Company’s sales arrangements is the delivery of the products, so revenue is recognized upon delivery of the promised goods to the customers. Revenue is measured at the point control transfers and represents the amount of consideration the Company expects to receive in exchange for transferring the goods. USC is a registered drug compounding outsourcing facility under Section 503B of the U.S. Food, Drug & Cosmetic Act, as amended, or FDCA, and provides prescription compounded medications to humans and animals, including compounded sterile preparations or CSPs, and non-sterile compounds to patients, physician clinics, hospitals, surgery centers and other clients throughout most of the United States. Disaggregation of Revenue As operations under a sterile environment are covered by Section 503B of the FDCA, and the U.S. Drug Quality and Security Act, USC’s operations are governed by specific regulatory and quality requirements. Any deviation from these exacting standards could result in a stoppage of operations, recall of products, and a significant reduction in revenues. The Company employs rigorous quality controls and outside testing facilities to minimize the likelihood of this occurrence. The following table presents the Company’s revenues disaggregated by sterile and non-sterile regulatory environments for the three months and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Sterile $ 2,296,278 $ 2,104,213 $ 6,178,524 $ 6,323,125 Non-Sterile 1,536,657 1,284,008 4,754,212 3,908,301 Total $ 3,832,935 $ 3,388,221 $ 10,932,736 $ 10,231,426 The revenues of the Company’s pharmacy formulations rely, in large part, on sales generated from clinics/hospitals. Adverse economic conditions pose a risk that the Company’s customers may reduce or cancel spending, which would impact the Company’s revenue. The following table presents the Company’s revenue disaggregated by end market for the three months and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Clinics/Hospitals $ 3,494,871 $ 3,035,913 $ 9,612,784 $ 9,080,547 Direct to Patients 338,064 352,308 1,319,952 1,150,879 Total $ 3,832,935 $ 3,388,221 $ 10,932,736 $ 10,231,426 Distribution and Commercialization Agreement On July 1, 2018, the Company announced that it had entered into a Distribution and Commercialization Agreement (the “Agreement”) with Sandoz Inc., a division of Novartis AG, to commercialize the Company’s Symjepi™ product for the emergency treatment of allergic reactions (Type I) including anaphylaxis. Under the terms of the Agreement, the Company appointed Sandoz as the exclusive distributor of Symjepi in the United States and related territories (“Territory”), in all fields including both the retail market and other markets, and granted Sandoz an exclusive license under the Company’s patent and other intellectual property rights and know-how to market, sell, and otherwise commercialize and distribute the product in the Territory, subject to the provisions of the Agreement, in partial consideration of an upfront fee by Sandoz and potential performance-based milestone payments. As part of the Agreement, Sandoz has commercial rights to the Company’s Symjepi Epinephrine Injection USP Injection (0.3mg/0.3mL) Injection pre-filled single dose syringe product, as well as the lower dose Symjepi (epinephrine) Injection 0.15mg product, which was approved by the FDA in September 2018 and is intended for use in the treatment of anaphylaxis for patients weighing 33-65 pounds and for which the Company submitted a supplemental new drug application to the FDA on November 27, 2017. The Company retains rights to the intellectual property subject to the Agreement and to commercialize both products outside of the Territory, but has granted Sandoz a right of first negotiation regarding such territories. In addition, the Company may continue to use the licensed intellectual property (excluding certain of the licensed trademarks) to develop and commercialize other products (with certain exceptions), including products that utilize the Company’s Symject™ syringe product platform. The Agreement provides that Sandoz will pay to the Company 50% of the Net Profit from Net Sales, as each such term is defined in the Agreement, of the product in the Territory to third parties, determined on a quarterly basis. The Company will be the supplier of the product to Sandoz, and Sandoz will order and pay the Company a supply price for quantities of products ordered. The Company will be responsible for all manufacturing, component and supply costs related to manufacturing and supplying the product to Sandoz. The Company is responsible for component sourcing and regulatory compliance in the supply chain and for testing of lots of product. Sandoz has agreed to use commercially reasonable efforts to commercialize the product, subject to various conditions and to the other provisions of the Agreement. The Agreement does not include minimum payments to the Company by Sandoz, minimum requirements for sales of product by Sandoz or, with certain exceptions, minimum purchase commitments by Sandoz. Under the Agreement, Sandoz has sole discretion in determining pricing, terms of sale, marketing, and selling decisions relating to the product. As of September 30, 2018, the Symjepi has not been commercially launched. Deferred Revenue Deferred Revenue are contract liabilities that the Company records when cash payments are received or due in advance of the Company’s satisfaction of performance obligations. The Company’s performance obligation is met when control of the promised goods is transferred to the Company’s customers. For the three months ended September 30, 2018 and 2017, $22,075 and $10,937 of the revenues recognized were reported as deferred revenue as of June 30, 2018 and 2017, respectively, and for the nine months ended September 30, 2018 and 2017, $14,758 and $54,478 of the revenues recognized were reported as deferred revenue as of December 31, 2017 and 2016, respectively. The increase in deferred revenue as of September 30, 2018 was primarily due to a payment received from Sandoz Inc., pursuant to the Agreement between the Company and Sandoz. Cost to Obtain a Contract The Company capitalizes costs related to contracts that would have not been incurred if the contract was not obtained. The deferred costs, reported in the prepaid expenses and other current assets and other non-current assets on the Company’s Consolidated Balance Sheets, will be amortized over the economic benefit period of the contract. The Company capitalized the $2.0 million fee payable to Jefferies as an incremental cost of obtaining a contract to commercialize and distribute the Company's first FDA approved product Symjepi™ with Sandoz, Inc. Of the $2.0 million fee, $500,000 was paid and $1.5 million was accrued as of September 30, 2018. The costs were deferred and will be amortized over the economic benefit period of approximately 10 years from date of product launch. The deferred costs were classified as current or non-current based on the timing of when the Company expects to recognize the expense. The current and non-current portions of the deferred costs were $200,000 included in prepaid expenses and other current assets and $1.8 million included in other non-current assets, respectively, in the Company’s condensed consolidated balance sheets. Practical Expedients The Company pays commissions on certain sales once the customer payment has been received, which are accrued at the time of the sale. The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. |
Acquisition of U.S. Compounding
Acquisition of U.S. Compounding | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition of U.S. Compounding | Note 3: Acquisition of U.S. Compounding On April 11, 2016, the Company acquired the net assets and assumed the principal debt obligations of U.S. Compounding, Inc. in a merger transaction (the “Merger”) pursuant to which the Company acquired USC and USC continued as a wholly owned subsidiary of the Company. The acquisition is accounted for using the purchase method of accounting. USC is registered as a drug compounding outsourcing facility under Section 503B of the FDCA and the U.S. Drug Quality and Security Act, and provides prescription compounded medications, including compounded sterile preparation and certain nonsterile drugs, to patients, physician clinics, hospitals, surgery centers and other clients throughout most of the United States. USC also provides certain veterinary pharmaceutical drugs for animals. The total consideration for the transaction was $15,967,942. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 4: Inventories Inventories, net of reserves, at September 30, 2018 and December 31, 2017 consisted of the following: September 30, December 31, Finished Goods $ 1,236,633 $ 256,050 Raw Material 778,148 560,828 Devices 1,203,897 1,007,680 $ 3,218,678 $ 1,824,558 Reserve for obsolescence as of September 30, 2018 and December 31, 2017 was approximately $194,000 and $795,000, respectively. During the nine months ended September 30, 2018 and 2017, approximately $3,421,000 and $263,000, respectively, of inventory was written off. The 2018 write off includes approximately $3,262,000 of Symjepi™ inventory. |
Fixed Assets
Fixed Assets | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 5: Fixed Assets Fixed Assets at September 30, 2018 and December 31, 2017 are summarized in the table below: Description Useful Life (Years) September 30, 2018 December 31, 2017 Building 30 $ 3,040,000 $3,040,000 Machinery and Equipment 3 - 7 2,214,306 1,525,643 Furniture and Fixtures 7 126,654 126,654 Automobile 5 9,395 9,395 Leasehold Improvements 7 - 15 284,037 284,037 Total Fixed Assets 5,674,392 4,985,729 Less: Accumulated Depreciation (1,422,461 ) (959,380) Land 460,000 460,000 Construction In Progress - Equipment 4,491,347 2,073,315 Fixed Assets, net $ 9,203,278 $6,559,664 Depreciation expense for the three months ended September 30, 2018 and 2017 was approximately $157,000 and $139,000, respectively; and for the nine months ended September 30, 2018 and 2017, depreciation expense was approximately $463,000 and $462,000, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 6: Intangible Assets and Goodwill Intangible assets at September 30, 2018 and December 31, 2017 are summarized in the tables below: September 30, 2018 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (4,611,632 ) $ 5,097,068 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (978,641 ) 2,984,359 Non-compete Agreement - USC, 3 years 1,639,000 (1,349,140 ) 289,860 Customer Relationships - USC, 10 years 5,572,000 (1,375,975 ) 4,196,025 Website Design - USC, 3 years 16,163 (8,530 ) 7,633 Total Definite-lived Assets 21,093,063 (8,518,118 ) 12,574,945 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 Symjepi™ Domain Name 9,674 — 9,674 Balance, September 30, 2018 $ 22,347,737 $ (8,518,118 ) $ 13,829,619 December 31, 2017 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (3,883,480 ) $ 5,825,220 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (681,416 ) 3,281,584 Non-compete Agreement, 3 years 1,639,000 (939,389 ) 699,611 Customer Relationships, 10 years 5,572,000 (958,074 ) 4,613,926 Website Design, 3 years 16,163 (4,491 ) 11,672 Total Definite-lived Assets 21,093,063 (6,661,050 ) 14,432,013 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 Symjepi™ Domain Name 9,674 — 9,674 Balance, December 31, 2017 $ 22,347,737 $ (6,661,050 ) $ 15,686,687 Amortization expense for the three months ended September 30, 2018 and 2017 was approximately $619,000 and $619,000, respectively; and for the nine months ended September 30, 2018 and 2017, amortization expense was approximately $1,857,000 and $1,856,000, respectively. E Year ending December 31, Remainder of 2018 $ 619,023 2019 2,083,034 2020 1,925,267 2021 1,924,370 2022 1,924,370 Thereafter 4,098,881 Total $ 12,574,945 Goodwill |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 7: Debt Ben Franklin Note Biosyn, Inc., a wholly owned subsidiary of the Company, issued a note payable to Ben Franklin Technology Center of Southeastern Pennsylvania (“Ben Franklin Note”) in October 1992, in connection with funding the development of Savvy, a compound then under development to prevent the transmission of HIV/AIDS. The Ben Franklin Note was recorded at its estimated fair value of $205,000 and was assumed by the Company as an obligation in connection with its acquisition of Biosyn in 2004. The repayment terms of the non-interest bearing obligation include the remittance of an annual fixed percentage of 3.0% applied to future revenues of Biosyn, if any, until the principal balance of $777,902 (face amount) is satisfied. Under the terms of the obligation, revenues are defined to exclude the value of unrestricted research and development funding received by Biosyn from nonprofit sources. Absent a material breach of contract or other event of default, there is no obligation to repay the amounts in the absence of future Biosyn revenues. The Company accreted the discount of $572,902 against earnings using the interest rate method (approximately 46%) over the discount period of five years, which was estimated in connection with the Ben Franklin Note’s valuation at the time of the acquisition. Accounting principles generally accepted in the United States emphasize market-based measurement through the use of valuation techniques that maximize the use of observable or market-based inputs. The Ben Franklin Note’s peculiar repayment terms outlined above affects its comparability with main stream market issues and also affects its transferability. The value of the Ben Franklin Note would also be impacted by the ability to estimate Biosyn’s expected future revenues which in turn hinge largely upon future efforts to commercialize the product candidate, the results of which efforts are not known by the Company. Given the above factors and therefore the lack of market comparability, the Ben Franklin Note would be valued based on Level 3 inputs (refer to Note 8). As such, management has determined that the Ben Franklin Note will have no future cash flows, as we do not believe the product will create a revenue stream in the future. As a result, the Note had no fair market value at the time of the merger in April 2009 between the Company (which was then named Cellegy Pharmaceuticals, Inc.) and the corporation then-named Adamis Pharmaceuticals Corporation. Working Capital Line of Credit On As Loans Assumed from Acquisition of USC: Building Loan In connection with the closing of the Merger and the transactions contemplated by the related merger agreement, 4 HIMS, LLC, an entity of which Eddie Glover, the chief executive officer of USC, and certain other former stockholders of USC are members, agreed to sell to the Company, the building and property owned by 4 HIMS on which USC’s offices are located, in consideration of the Company being added as an additional “borrower” and assuming the obligations under the loan agreement, promissory note and related loan documents that 4 HIMS and certain other parties previously entered into with the Lender (the “4 HIMS Loan Documents”). On November 10, 2016, a Loan Amendment and Assumption Agreement was entered with into the Bank. Pursuant to the agreement, the Company agreed to pay the Bank monthly payments of principal and interest of $15,411, with a final monthly payment and any other amounts due under the 4 HIMS Loan Documents due and payable in August 2019. As USC Working Capital Loan In On In As of September 30, 2018 and December 31, 2017, the outstanding unpaid principal balance was $0. Interest expense for the three months ended September 30, 2018 and 2017 was approximately $0 and $0, respectively; and for the nine months ended September 30, 2018 and 2017, interest expense was approximately $0 and $29,000, respectively. Equipment Loans, Consolidated E quipment Loan, Tribute USC Equipment Loan. Consolidated Equipment Loans Loan Amendment, Forbearance and Assumption Agreement In connection with our acquisition of USC in April 2016, Lender, Adamis, USC, 4 HIMS and Tribute (USC, 4 HIMS and Tribute sometimes referred to as the “Initial Loan Parties” and together with Adamis, collectively the “Loan Parties”), and certain individual guarantors, entered into a Loan Amendment, Forbearance and Assumption Agreement (the “Loan Amendment Agreement”). Pursuant to the Loan Amendment Agreement, Adamis was added as a “Borrower” and co-borrower under the loan agreements and related loan documents between USC (and certain other entities) and Lender (the “USC Loan Documents”), and assumed all of the rights, duties, liabilities and obligations as a Borrower and a party under the USC Loan Documents, jointly and severally with the current borrower or borrowers under each of the USC Loan Documents. As part of the Loan Amendment Agreement, the parties also agreed that the real and personal property securing each of the USC Loans will also secure each of the other USC Loans, as well as the Adamis Working Capital Line of $2.0 million. Except as expressly set forth in the Loan Amendment Agreement, as amended, the terms and provisions set forth in the USC Loan Documents were not modified and remain in full force and effect. The notes evidencing the foregoing loans from the Lender are subject to customary subjective acceleration clauses, effective upon a material impairment in collateral, a material adverse change in the Company’s business or financial condition, or a material impairment in the Company’s ability to repay the note. As of September 30, 2018, the Company believes that it is in compliance in all material respects with all the loan covenants. At September 30, 2018, the outstanding principal maturities of the amended long-term debts were as follows: Years ending December 31, Building Loan Equipment Loan Total Remainder of 2018 $ 24,754 $ 98,036 $ 122,790 2019 2,249,514 333,755 2,583,269 Total $ 2,274,268 $ 431,791 $ 2,706,059 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8: Fair Value Measurements Fair value measurements adopted by the Company are based on the authoritative guidance provided by the FASB which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FASB authoritative guidance establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels, which are described below: 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 than 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. The carrying amounts reported in the Condensed Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable, notes payable, accrued liabilities and other payables approximate their fair values due to their short-term nature. |
Legal Matters
Legal Matters | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Note 9: Legal Matters |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Common Stock | Note 10: Common Stock On On |
Stock Option Plans, Shares Rese
Stock Option Plans, Shares Reserved and Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Plans, Shares Reserved and Warrants | Note 11: Stock Option Plans, Shares Reserved and Warrants The following table summarizes the stock option activity for the nine months ended September 30, 2018: 2009 Weighted Weighted Balance as of December 31, 2017 6,726,594 $ 5.05 8.17 years Options Granted 2,905,789 $ 3.01 9.43 years Options Exercised (4,166 ) $ 3.35 — Options Canceled/Expired (289,180 ) $ 5.78 — Balance as of September 30, 2018 9,339,037 $ 4.39 8.15 years Vested and Exercisable at September 30, 2018 5,511,795 $ 5.01 7.01 years The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) of the 9,339,037 and 6,726,594 stock options outstanding at September 30, 2018 and December 31, 2017 was approximately $2,199,000 and approximately $2,980,000, respectively. The aggregate intrinsic value of 5,511,795 and 3,835,992 stock options exercisable at September 30, 2018 and December 31, 2017 was approximately $645,000 and $1,009,000, respectively. The following table summarizes warrants outstanding at September 30, 2018: Warrant Exercise Price Date Expiration Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2018 Underwriter Warrants 28,108 $ 7.44 December 12, 2013 December 12, 2018 Underwriter Warrants 4,217 $ 7.44 January 16, 2014 January 16, 2019 Preferred Stock Series A-1 Warrants 1,183,432 $ 4.10 January 26, 2016 January 26, 2021 Preferred Stock Series A-2 Warrants 192,414 $ 2.90 July 11, 2016 July 11, 2021 2016 Private Placement 700,000 $ 2.98 August 3, 2016 August 3, 2021 Total Warrants 2,166,995 The following table summarizes the RSUs outstanding at September 30, 2018: RSUs Price Date of Grant Non-Employee Board of Directors 350,000 (1) $ 8.46 May 25, 2016 Company Executives 950,000 (1) $ 3.50 March 1, 2017 Company Executives 342,212 (2) $ 2.83 February 21, 2018 Total RSUs 1,642,212 (1) The RSUs will fully vest on the seventh anniversary of the date of grant if the recipient has provided continuous service or upon change of control or upon death or disability. (2) The RSUs vest ratably annually over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability. Expense related to RSUs for the three months ended September 30, 2018 and 2017 was approximately $308,000 and $225,000, respectively; and for the nine months ended September 30, 2018 and 2017, expense related to RSUs was approximately $871,000 and $594,000, respectively. At September 30, 2018, the Company has reserved shares of common stock for issuance upon exercise of outstanding options and warrants, vesting of RSUs and options and other awards that may be granted in the future under the 2009 Equity Incentive Plan, as follows: Warrants 2,166,995 RSU 1,642,212 2009 Equity Incentive Plan 9,409,867 Total Shares Reserved 13,219,074 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Inventories | Inventories Inventories |
Liquidity and Capital Resources | Liquidity and Capital Resources The Company’s cash balance was $32,034,584 and $18,332,702 at September 30, 2018 and December 31, 2017, respectively. The December 31, 2017 cash balance includes approximately $1.0 million in restricted cash held by the Bear State Bank, N.A. as collateral for a $2.0 million working capital line. The Company prepared the condensed consolidated financial statements assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. In preparing these condensed consolidated financial statements, consideration was given to the Company’s future business as described below, which may preclude the Company from realizing the value of certain assets. The Company has significant operating cash flow deficiencies. Additionally, the Company may require additional funding for future operations and the expenditures that it believes will be required to support commercialization of its products and conduct the clinical and regulatory activities relating to the Company’s product candidates, satisfy existing obligations and liabilities, and otherwise support the Company’s intended business activities and working capital needs. The preceding conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include attempting to secure additional required funding through equity or debt financings, sales or out-licensing of intellectual property assets, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research, development or commercialization efforts, or similar transactions. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. |
Basic and Diluted (Loss) per Share | Basic and Diluted (Loss) per Share The Company computes basic loss per share by dividing the loss attributable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The diluted loss per share calculation is based on the treasury stock method and gives effect to dilutive options, warrants, convertible notes, convertible preferred stock and other potential dilutive common stock. Except as noted below, the effect of common stock equivalents was anti-dilutive and was excluded from the calculation of weighted average shares outstanding. Potential dilutive securities, which are not included in dilutive weighted average shares as of September 30, 2018 and September 30, 2017 consist of outstanding equity classified warrants (2,166,995 and 3,189,052, respectively), outstanding options (9,339,037 and 6,598,817, respectively), and outstanding restricted stock units (1,642,212 and 1,300,000, respectively). |
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncement Utilizing the deferred effective date of January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Company evaluated the impact that adoption of this new standard will have on its consolidated financial statements and determined that the timing of revenue recognition and amount of revenue recognized is not materially impacted under the new standard. Accordingly, it did not have a material quantitative impact on the Company’s revenue recognition relating to sales of compounded pharmacy formulations and other pharmacy products by U.S. Compounding, Inc. (“USC”), a subsidiary. The Company also determined that the modified retrospective adoption will have no impact on either the timing or amount of prior period revenues. As a result, any comparative information has not been restated. Refer to Note 2 for further details. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non employee Share-Based Payment Accounting. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is still currently assessing the impact of this new guidance but does not expect adoption will have a material impact on its condensed consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues disaggregated by sterile and non-sterile regulatory environments | The following table presents the Company’s revenues disaggregated by sterile and non-sterile regulatory environments for the three months and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Sterile $ 2,296,278 $ 2,104,213 $ 6,178,524 $ 6,323,125 Non-Sterile 1,536,657 1,284,008 4,754,212 3,908,301 Total $ 3,832,935 $ 3,388,221 $ 10,932,736 $ 10,231,426 The following table presents the Company’s revenue disaggregated by end market for the three months and nine months ended September 30, 2018 and 2017. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Clinics/Hospitals $ 3,494,871 $ 3,035,913 $ 9,612,784 $ 9,080,547 Direct to Patients 338,064 352,308 1,319,952 1,150,879 Total $ 3,832,935 $ 3,388,221 $ 10,932,736 $ 10,231,426 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories, net of reserves, at September 30, 2018 and December 31, 2017 consisted of the following: September 30, December 31, Finished Goods $ 1,236,633 $ 256,050 Raw Material 778,148 560,828 Devices 1,203,897 1,007,680 $ 3,218,678 $ 1,824,558 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed Assets at September 30, 2018 and December 31, 2017 are summarized in the table below: Description Useful Life (Years) September 30, 2018 December 31, 2017 Building 30 $ 3,040,000 $3,040,000 Machinery and Equipment 3 - 7 2,214,306 1,525,643 Furniture and Fixtures 7 126,654 126,654 Automobile 5 9,395 9,395 Leasehold Improvements 7 - 15 284,037 284,037 Total Fixed Assets 5,674,392 4,985,729 Less: Accumulated Depreciation (1,422,461 ) (959,380) Land 460,000 460,000 Construction In Progress - Equipment 4,491,347 2,073,315 Fixed Assets, net $ 9,203,278 $6,559,664 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets at September 30, 2018 and December 31, 2017 are summarized in the tables below: September 30, 2018 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (4,611,632 ) $ 5,097,068 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (978,641 ) 2,984,359 Non-compete Agreement - USC, 3 years 1,639,000 (1,349,140 ) 289,860 Customer Relationships - USC, 10 years 5,572,000 (1,375,975 ) 4,196,025 Website Design - USC, 3 years 16,163 (8,530 ) 7,633 Total Definite-lived Assets 21,093,063 (8,518,118 ) 12,574,945 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 Symjepi™ Domain Name 9,674 — 9,674 Balance, September 30, 2018 $ 22,347,737 $ (8,518,118 ) $ 13,829,619 December 31, 2017 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (3,883,480 ) $ 5,825,220 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (681,416 ) 3,281,584 Non-compete Agreement, 3 years 1,639,000 (939,389 ) 699,611 Customer Relationships, 10 years 5,572,000 (958,074 ) 4,613,926 Website Design, 3 years 16,163 (4,491 ) 11,672 Total Definite-lived Assets 21,093,063 (6,661,050 ) 14,432,013 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 Symjepi™ Domain Name 9,674 — 9,674 Balance, December 31, 2017 $ 22,347,737 $ (6,661,050 ) $ 15,686,687 |
Schedule of estimated future amortization expense | E Year ending December 31, Remainder of 2018 $ 619,023 2019 2,083,034 2020 1,925,267 2021 1,924,370 2022 1,924,370 Thereafter 4,098,881 Total $ 12,574,945 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of principal maturities under the amended long-term debts | At September 30, 2018, the outstanding principal maturities of the amended long-term debts were as follows: Years ending December 31, Building Loan Equipment Loan Total Remainder of 2018 $ 24,754 $ 98,036 $ 122,790 2019 2,249,514 333,755 2,583,269 Total $ 2,274,268 $ 431,791 $ 2,706,059 |
Stock Option Plans, Shares Re_2
Stock Option Plans, Shares Reserved and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | The following table summarizes the stock option activity for the nine months ended September 30, 2018: 2009 Weighted Weighted Balance as of December 31, 2017 6,726,594 $ 5.05 8.17 years Options Granted 2,905,789 $ 3.01 9.43 years Options Exercised (4,166 ) $ 3.35 — Options Canceled/Expired (289,180 ) $ 5.78 — Balance as of September 30, 2018 9,339,037 $ 4.39 8.15 years Vested and Exercisable at September 30, 2018 5,511,795 $ 5.01 7.01 years |
Schedule of warrants outstanding | The following table summarizes warrants outstanding at September 30, 2018: Warrant Shares Exercise Price Per Share Date Issued Expiration Date Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2018 Underwriter Warrants 28,108 $ 7.44 December 12, 2013 December 12, 2018 Underwriter Warrants 4,217 $ 7.44 January 16, 2014 January 16, 2019 Preferred Stock Series A-1 Warrants 1,183,432 $ 4.10 January 26, 2016 January 26, 2021 Preferred Stock Series A-2 Warrants 192,414 $ 2.90 July 11, 2016 July 11, 2021 2016 Private Placement 700,000 $ 2.98 August 3, 2016 August 3, 2021 Total Warrants 2,166,995 |
Schedule of RSUs outstanding | The following table summarizes the RSUs outstanding at September 30, 2018: RSUs Price Per Share at Grant Date Date of Grant Non-Employee Board of Directors 350,000 (1) $ 8.46 May 25, 2016 Company Executives 950,000 (1) $ 3.50 March 1, 2017 Company Executives 342,212 (2) $ 2.83 February 21, 2018 Total RSUs 1,642,212 (1) The RSUs will fully vest on the seventh anniversary of the date of grant if the recipient has provided continuous service or upon change of control or upon death or disability. (2) The RSUs vest ratably annually over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability. |
Schedule of reserved shares of common stock for issuance upon conversion or exercise and future issuance under plans | At September 30, 2018, the Company has reserved shares of common stock for issuance upon exercise of outstanding options and warrants, vesting of RSUs and options and other awards that may be granted in the future under the 2009 Equity Incentive Plan, as follows: Warrants 2,166,995 RSU 1,642,212 2009 Equity Incentive Plan 9,409,867 Total Shares Reserved 13,219,074 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Bank Loan - Line of Credit | $ 2,000,000 | |||
Federal statutory tax rate | 21.00% | |||
Tax provision benefit | $ 339,000 | |||
Cash | $ 32,034,584 | $ 24,317,294 | 18,332,702 | $ 5,095,760 |
Stock Option [Member] | ||||
Potential dilutive securities, excluded from computation of earnings | 9,339,037 | 6,598,817 | ||
RSU [Member] | ||||
Potential dilutive securities, excluded from computation of earnings | 1,642,212 | 1,300,000 | ||
Warrants [Member] | ||||
Potential dilutive securities, excluded from computation of earnings | 2,166,995 | 3,189,052 | ||
Bear State Bank Line of Credit [Member] | ||||
Restricted Cash | 1,000,000 | |||
Bank Loan - Line of Credit | $ 0 | $ 2,000,000 |
Revenues (Details)
Revenues (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 3,832,935 | $ 3,388,221 | $ 10,932,736 | $ 10,231,426 |
Clinics/Hospitals [Member] | ||||
Revenue | 3,494,871 | 3,035,913 | 9,612,784 | 9,080,547 |
Direct to Patients [Member] | ||||
Revenue | 338,064 | 352,308 | 1,319,952 | 1,150,879 |
Sterile [Member] | ||||
Revenue | 2,296,278 | 2,104,213 | 6,178,524 | 6,323,125 |
Non-Sterile [Member] | ||||
Revenue | $ 1,536,657 | $ 1,284,008 | $ 4,754,212 | $ 3,908,301 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Deferred revenue | $ 22,075 | $ 14,758 | $ 10,937 | $ 54,478 | |
Service fees deferred and amortized term | 10 years | ||||
Prepaid Expenses and Other Current Assets [Member] | |||||
Deferred costs | $ 200,000 | ||||
Other Noncurrent Assets [Member] | |||||
Deferred costs | 1,800,000 | ||||
Distribution And Commercialization Agreemen [Member] | Jefferies LLC [Member] | |||||
Service fees payable | 2,000,000 | ||||
Service fees paid | 500,000 | ||||
Accrued service fees | $ 1,500,000 |
Acquisition of U.S. Compoundi_2
Acquisition of U.S. Compounding (Details Narrative) | Apr. 11, 2016USD ($) |
US Compounding [Member] | |
Total Purchase Price | $ 15,967,942 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 1,236,633 | $ 256,050 |
Raw Material | 778,148 | 560,828 |
Devices | 1,203,897 | 1,007,680 |
Inventories | $ 3,218,678 | $ 1,824,558 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Reserve for obsolescence | $ 194,000 | $ 795,000 | |
Inventory written-off | 3,421,000 | $ 263,000 | |
Symjepi TM [Member] | |||
Inventory written-off | $ 3,262,000 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Costs | $ 5,674,392 | $ 4,985,729 |
Accumulated Depreciation | (1,422,461) | (959,380) |
Land | 460,000 | 460,000 |
CIP - Equipment | 4,491,347 | 2,073,315 |
Fixed Assets, net | 9,203,278 | 6,559,664 |
Building [Member] | ||
Costs | $ 3,040,000 | 3,040,000 |
Useful lives of fixed assets | 30 years | |
Machinery and Equipment [Member] | ||
Costs | $ 2,214,306 | 1,525,643 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Useful lives of fixed assets | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Useful lives of fixed assets | 7 years | |
Furniture and Fixtures [Member] | ||
Costs | $ 126,654 | 126,654 |
Useful lives of fixed assets | 7 years | |
Automobiles [Member] | ||
Costs | $ 9,395 | 9,395 |
Useful lives of fixed assets | 5 years | |
Leasehold Improvements [Member] | ||
Costs | $ 284,037 | $ 284,037 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Useful lives of fixed assets | 7 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Useful lives of fixed assets | 15 years |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 157,000 | $ 139,000 | $ 463,000 | $ 462,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Gross Carrying Value - Finite-Lived Assets | $ 21,093,063 | $ 21,093,063 |
Gross Carrying Value - intangibles | 22,347,737 | 22,347,737 |
Accumulated Amortization | (8,518,118) | (6,661,050) |
Net Carrying Amount - Finite-Lived Assets | 12,574,945 | 14,432,013 |
Net Carrying Amount | 13,829,619 | 15,686,687 |
Trade Name and Brand - USC [Member] | ||
Gross Carrying Value - indefinite-Lived Assets | 1,245,000 | 1,245,000 |
Net Carrying Amount | 1,245,000 | 1,245,000 |
Symjepi Domain Name [Member] | ||
Gross Carrying Value - indefinite-Lived Assets | 9,674 | 9,674 |
Net Carrying Amount | $ 9,674 | $ 9,674 |
Taper DPI Intellectual Property [Member] | ||
Amortization Period | 10 years | 10 years |
Gross Carrying Value - Finite-Lived Assets | $ 9,708,700 | $ 9,708,700 |
Accumulated Amortization | (4,611,632) | (3,883,480) |
Net Carrying Amount - Finite-Lived Assets | $ 5,097,068 | $ 5,825,220 |
Taper DPI Intellectual Property [Member] | Transmission Service Agreement [Member] | ||
Amortization Period | 1 year | 1 year |
Gross Carrying Value - Finite-Lived Assets | $ 194,200 | $ 194,200 |
Accumulated Amortization | $ (194,200) | $ (194,200) |
FDA 503B Registration & Compliance - USC [Member] | ||
Amortization Period | 10 years | 10 years |
Gross Carrying Value - Finite-Lived Assets | $ 3,963,000 | $ 3,963,000 |
Accumulated Amortization | (978,641) | (681,416) |
Net Carrying Amount - Finite-Lived Assets | $ 2,984,359 | $ 3,281,584 |
Non-compete Agreement - USC [Member] | ||
Amortization Period | 3 years | 3 years |
Gross Carrying Value - Finite-Lived Assets | $ 1,639,000 | $ 1,639,000 |
Accumulated Amortization | (1,349,140) | (939,389) |
Net Carrying Amount - Finite-Lived Assets | $ 289,860 | $ 699,611 |
Customer Relationships - USC [Member] | ||
Amortization Period | 10 years | 10 years |
Gross Carrying Value - Finite-Lived Assets | $ 5,572,000 | $ 5,572,000 |
Accumulated Amortization | (1,375,975) | (958,074) |
Net Carrying Amount - Finite-Lived Assets | $ 4,196,025 | $ 4,613,926 |
Website Design - USC [Member[ | ||
Amortization Period | 3 years | 3 years |
Gross Carrying Value - Finite-Lived Assets | $ 16,163 | $ 16,163 |
Accumulated Amortization | (8,530) | (4,491) |
Net Carrying Amount - Finite-Lived Assets | $ 7,633 | $ 11,672 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Estimated future amortization expense for the year ending December 31, | ||
Remainder of 2018 | $ 619,023 | |
2,019 | 2,083,034 | |
2,020 | 1,925,267 | |
2,021 | 1,924,370 | |
2,022 | 1,924,370 | |
Thereafter | 4,098,881 | |
Net Carrying Amount - Finite-Lived Assets | $ 12,574,945 | $ 14,432,013 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Apr. 11, 2016 | |
Amortization expense | $ 619,000 | $ 619,000 | $ 1,857,000 | $ 1,856,000 | |||
Goodwill | $ 7,640,622 | $ 7,640,622 | $ 7,640,622 | ||||
US Compounding [Member] | |||||||
Goodwill | $ 7,641,000 | ||||||
Deferred income tax benefit of acquired goodwill | $ 5,416,000 |
Debt (Details)
Debt (Details) | Sep. 30, 2018USD ($) |
Principal Maturities during the year ending December 31, | |
Remainder of 2018 | $ 122,790 |
2,019 | 2,583,269 |
Total | 2,706,059 |
Building Loan [Member] | |
Principal Maturities during the year ending December 31, | |
Remainder of 2018 | 24,754 |
2,019 | 2,249,514 |
Total | 2,274,268 |
Consolidated Equipment Loans [Member] | |
Principal Maturities during the year ending December 31, | |
Remainder of 2018 | 98,036 |
2,019 | 333,755 |
Total | $ 431,791 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2004 | Dec. 31, 2017 | Mar. 28, 2016 | |
Debt Instrument [Line Items] | |||||||
Bank loan - line of credit | $ 2,000,000 | ||||||
Interest expense | $ 30,653 | $ 52,635 | $ 132,755 | $ 179,540 | |||
Bear State Bank Line of Credit [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 2,000,000 | ||||||
Warrant shares | 1,000,000 | ||||||
Bank loan - line of credit | 0 | 0 | $ 2,000,000 | ||||
Interest expense | $ 4,000 | $ 22,000 | $ 51,000 | $ 61,000 | |||
Biosyn [Member] | Ben Franklin Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt fair value | $ 205,000 | ||||||
Debt face amount | 777,902 | ||||||
Accretion of debt discount | $ 572,902 | ||||||
Discount period | 5 years | ||||||
Annual fixed remittance | 3.00% | ||||||
Interest rate method | 46.00% |
Debt (Details Narrative 1)
Debt (Details Narrative 1) - USD ($) | Nov. 10, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jul. 31, 2017 |
Bear State Bank Line of Credit [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Restricted certificate of deposit | $ 1,000,000 | ||||||
Loan Amendment and Assumption Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Frequency of periodic payment | Monthly | ||||||
Periodic payment | $ 15,411 | ||||||
Building Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt amount | $ 2,274,000 | $ 2,274,000 | $ 2,347,000 | ||||
Effective interest rate | 3.75% | 3.75% | 3.75% | ||||
Interest expense | $ 22,000 | $ 23,000 | $ 66,000 | $ 68,000 | |||
USC Working Capital Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt amount | 0 | 0 | $ 0 | ||||
Interest expense | 0 | 0 | 0 | 29,000 | |||
Borrowing capacity under loan | $ 2,500,000 | $ 2,500,000 | |||||
Borrowing base - trade account receivables | 80.00% | 80.00% | |||||
Borrowing base - inventories | 50.00% | 50.00% | |||||
Cash flow coverage ratio | 120.00% | 120.00% | |||||
Quarterly prinicipal payment option | $ 250,000 | ||||||
Equipment Loan - Tribune [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt amount | $ 518,000 | $ 518,000 | |||||
Interest rate | 4.75% | 4.75% | |||||
USC Equipment Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt amount | $ 635,000 | $ 635,000 | |||||
Interest rate | 3.25% | 3.25% | |||||
Borrowing capacity under loan | $ 700,000 | $ 700,000 | |||||
Consolidated Equipment Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Periodic payment | 33,940 | ||||||
Debt amount | $ 1,152,890 | 432,000 | 432,000 | $ 720,000 | |||
Interest rate | 3.75% | ||||||
Interest expense | $ 5,000 | $ 8,000 | $ 16,000 | $ 27,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Aug. 06, 2018 | Jul. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Issuance of common stock for public offering (shares) | 13,416,667 | |||
Proceeds from Issuance of Common Stock, net of issuance cost | $ 37,600,000 | $ 37,619,759 | $ 16,036,134 | |
Underwriting discounts and commissions and estimated offering expenses payable | $ 2,630,000 | |||
Offering price (in dollars per share) | $ 3 | |||
Bear State Bank Line of Credit [Member] | ||||
Exercise of warrant to acquire shares (shares) | 699,978 | |||
Shares returned to Company and retired to treasury stock (shares) | 215,417 |
Stock Option Plans, Shares Re_3
Stock Option Plans, Shares Reserved and Warrants (Details) - 2009 Equity Incentive Plan [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of options | |
Outstanding options, beginning | shares | 6,726,594 |
Options granted | shares | 2,905,789 |
Options exercised | shares | (4,166) |
Options canceled | shares | (289,180) |
Outstanding options, ending | shares | 9,339,037 |
Exercisable options | shares | 5,511,795 |
Weighted average exercise price | |
Outstanding options, beginning | $ / shares | $ 5.05 |
Options granted | $ / shares | 3.01 |
Options exercised | $ / shares | 3.35 |
Options canceled | $ / shares | 5.78 |
Outstanding options, ending | $ / shares | 4.39 |
Exercisable options | $ / shares | $ 5.01 |
Weighted average remaining contractual life | |
Balance | 8 years 2 months 1 day |
Options granted | 9 years 5 months 5 days |
Outstanding Options | 8 years 1 month 24 days |
Exercisable | 7 years 4 days |
Stock Option Plans, Shares Re_4
Stock Option Plans, Shares Reserved and Warrants (Details 1) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Old Adamis Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 58,824 |
Warrant exercise price (in dollars per share) | $ / shares | $ 8.50 |
Date Issued | Nov. 15, 2007 |
Expiration Date | Nov. 15, 2018 |
Underwriter Warrants 1 [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 28,108 |
Warrant exercise price (in dollars per share) | $ / shares | $ 7.44 |
Date Issued | Dec. 12, 2013 |
Expiration Date | Dec. 12, 2018 |
Underwriter Warrants 2 [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 4,217 |
Warrant exercise price (in dollars per share) | $ / shares | $ 7.44 |
Date Issued | Jan. 16, 2014 |
Expiration Date | Jan. 16, 2019 |
Preferred Stock Series A-1 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 1,183,432 |
Warrant exercise price (in dollars per share) | $ / shares | $ 4.10 |
Date Issued | Jan. 26, 2016 |
Expiration Date | Jan. 26, 2021 |
Preferred Stock Series A-2 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 192,414 |
Warrant exercise price (in dollars per share) | $ / shares | $ 2.90 |
Date Issued | Jul. 11, 2016 |
Expiration Date | Jul. 11, 2021 |
Common Stock Private 2016 Placement [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 700,000 |
Warrant exercise price (in dollars per share) | $ / shares | $ 2.98 |
Date Issued | Aug. 3, 2016 |
Expiration Date | Aug. 3, 2021 |
Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant shares | 2,166,995 |
Stock Option Plans, Shares Re_5
Stock Option Plans, Shares Reserved and Warrants (Details 2) | 9 Months Ended | |
Sep. 30, 2018$ / sharesshares | ||
RSU [Member] | ||
Total RSUs | 1,642,212 | |
Board of Directors [Member] | ||
Total RSUs | 350,000 | [1] |
Price at grant date (in dollars per share) | $ / shares | $ 8.46 | |
Date of grant | May 25, 2016 | |
Company Executives #1 [Member] | ||
Total RSUs | 950,000 | [1] |
Price at grant date (in dollars per share) | $ / shares | $ 3.50 | |
Date of grant | Mar. 1, 2017 | |
Company Executives #2 [Member] | ||
Total RSUs | 342,212 | [2] |
Price at grant date (in dollars per share) | $ / shares | $ 2.83 | |
Date of grant | Feb. 21, 2018 | |
[1] | The RSUs will fully vest on the seventh anniversary of the date of grant if the recipient has provided continuous service or upon change of control or upon death or disability. | |
[2] | The RSUs vest ratably annually over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability. |
Stock Option Plans, Shares Re_6
Stock Option Plans, Shares Reserved and Warrants (Details 3) | Sep. 30, 2018shares |
Reserved shares of common stock for issuance upon exercise | 13,219,074 |
2009 Equity Incentive Plan [Member] | |
Reserved shares of common stock for issuance upon exercise | 9,409,867 |
RSU [Member] | |
Reserved shares of common stock for issuance upon exercise | 1,642,212 |
Warrants [Member] | |
Reserved shares of common stock for issuance upon exercise | 2,166,995 |
Stock Option Plans, Shares Re_7
Stock Option Plans, Shares Reserved and Warrants (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Compensation expenses | $ 4,859,453 | $ 4,502,093 | |||
RSU [Member] | |||||
Compensation expenses | $ 308,000 | $ 225,000 | $ 871,000 | $ 594,000 | |
2009 Equity Incentive Plan [Member] | |||||
Options granted | 2,905,789 | ||||
Exercise price of options granted (in dollars per share) | $ 3.01 | ||||
Aggregate intrinsic value of stock options outstanding | 2,199,000 | $ 2,199,000 | $ 2,980,000 | ||
Aggregate intrinsic value of stock options exercisable | $ 645,000 | $ 645,000 | $ 1,009,000 | ||
Stock options outstanding | 9,339,037 | 9,339,037 | 6,726,594 | ||
Stock option exercisable | 5,511,795 | 5,511,795 | 3,835,992 |