Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 06, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Adamis Pharmaceuticals Corp | |
Entity Central Index Key | 0000887247 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 001-36242 | |
Entity Incorporation, State or Country Code | DE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,438,109 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 4,092,689 | $ 19,271,642 |
Accounts Receivable, net | 2,902,280 | 1,155,166 |
Inventories, net | 2,914,486 | 3,279,032 |
Prepaid Expenses and Other Current Assets | 2,062,427 | 2,078,413 |
Total Current Assets | 11,971,882 | 25,784,253 |
LONG TERM ASSETS | ||
Security Deposits | 54,655 | 54,655 |
Intangible Assets, net | 12,101,441 | 13,210,596 |
Goodwill | 7,640,622 | 7,640,622 |
Fixed Assets, net | 11,501,412 | 9,867,921 |
Right-of-Use Assets | 2,119,113 | |
Other Non-Current Assets | 1,700,000 | 1,800,000 |
Total Assets | 47,089,125 | 58,358,047 |
CURRENT LIABILITIES | ||
Accounts Payable | 4,271,095 | 4,170,720 |
Deferred Revenue | 964,296 | 1,011,246 |
Accrued Other Expenses | 2,487,182 | 2,340,095 |
Accrued Bonuses | 959,868 | 1,448,505 |
Lease Liabilities, current portion | 445,401 | |
Bank Loans - Building and Equipment | 2,334,037 | 2,583,134 |
Total Current Liabilities | 11,461,879 | 11,553,700 |
LONG TERM LIABILITIES | ||
Deferred Tax Liability, net | 112,530 | 112,530 |
Lease Liabilities, net of current portion | 1,705,930 | |
Total Liabilities | 13,280,339 | 11,666,230 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock – Par Value $.0001; 10,000,000 Shares Authorized; Series A-2 Convertible, Zero and Zero Issued and Outstanding at June 30, 2019 (Unaudited) and December 31, 2018, respectively. | ||
Common Stock - Par Value $.0001; 100,000,000 Shares Authorized; 48,161,066 and 47,814,315 Issued, 47,638,109 and 47,291,358 Outstanding at June 30, 2019 and December 31, 2018, respectively | 4,816 | 4,781 |
Additional Paid-in Capital | 203,439,869 | 199,696,656 |
Accumulated Deficit | (169,630,649) | (153,004,370) |
Treasury Stock, at cost - 522,957 Shares and 522,957 at June 30, 2019 and December 31, 2018, respectively | (5,250) | (5,250) |
Total Stockholders' Equity | 33,808,786 | 46,691,817 |
Total Liabilities and Stockholders' Equity | $ 47,089,125 | $ 58,358,047 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 48,161,066 | 47,814,315 |
Common stock, outstanding | 47,638,109 | 47,291,358 |
Treasury stock | 522,957 | 522,957 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
REVENUE, net | $ 5,764,899 | $ 3,920,566 | $ 10,670,671 | $ 7,099,800 |
COST OF GOODS SOLD | 3,665,565 | 2,394,394 | 7,291,033 | 4,457,557 |
Gross Profit | 2,099,334 | 1,526,172 | 3,379,638 | 2,642,243 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 7,000,339 | 6,362,931 | 15,021,803 | 12,836,746 |
RESEARCH AND DEVELOPMENT | 2,845,745 | 4,835,634 | 5,042,260 | 7,084,702 |
Loss from Operations | (7,746,750) | (9,672,393) | (16,684,425) | (17,279,205) |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (22,954) | (51,435) | (46,962) | (102,103) |
Interest Income | 34,117 | 21,457 | 108,495 | 60,566 |
Total Other Income (Expense), net | 11,163 | (29,978) | 61,533 | (41,537) |
Net (Loss) | $ (7,735,587) | $ (9,702,371) | $ (16,622,892) | $ (17,320,742) |
Basic and Diluted (Loss) Per Share (in dollars per share) | $ (0.16) | $ (0.29) | $ (0.35) | $ (0.52) |
Basic and Diluted Weighted Average Shares Outstanding (in shares) | 47,539,186 | 33,389,600 | 47,425,971 | 33,389,505 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance, Beginning at Dec. 31, 2017 | $ 3,369 | $ 153,546,932 | $ (5,229) | $ (113,997,588) | $ 39,547,484 |
Balance, Beginning (in shares) at Dec. 31, 2017 | 33,696,950 | (307,540) | |||
Share Based Compensation | 1,517,657 | 1,517,657 | |||
Net (Loss) | (7,618,371) | (7,618,371) | |||
Balance, Ending at Mar. 31, 2018 | $ 3,369 | 155,064,589 | $ (5,229) | (121,615,959) | 33,446,770 |
Balance, Ending (in shares) at Mar. 31, 2018 | 33,696,950 | (307,540) | |||
Balance, Beginning at Dec. 31, 2017 | $ 3,369 | 153,546,932 | $ (5,229) | (113,997,588) | 39,547,484 |
Balance, Beginning (in shares) at Dec. 31, 2017 | 33,696,950 | (307,540) | |||
Net (Loss) | (17,320,742) | ||||
Balance, Ending at Jun. 30, 2018 | $ 3,370 | 156,719,009 | $ (5,229) | (131,318,330) | 25,398,820 |
Balance, Ending (in shares) at Jun. 30, 2018 | 33,697,670 | (307,540) | |||
Balance, Beginning at Mar. 31, 2018 | $ 3,369 | 155,064,589 | $ (5,229) | (121,615,959) | 33,446,770 |
Balance, Beginning (in shares) at Mar. 31, 2018 | 33,696,950 | (307,540) | |||
Common Stock Issued for Exercised Options | $ 1 | (1) | |||
Common Stock Issued for Exercised Options (in shares) | 720 | ||||
Share Based Compensation | 1,654,421 | 1,654,421 | |||
Net (Loss) | (9,702,371) | (9,702,371) | |||
Balance, Ending at Jun. 30, 2018 | $ 3,370 | 156,719,009 | $ (5,229) | (131,318,330) | 25,398,820 |
Balance, Ending (in shares) at Jun. 30, 2018 | 33,697,670 | (307,540) | |||
Balance, Beginning at Dec. 31, 2018 | $ 4,781 | 199,696,656 | $ (5,250) | (153,004,370) | 46,691,817 |
Balance, Beginning (in shares) at Dec. 31, 2018 | 47,814,315 | (522,957) | |||
Cumulative Effect from Adoption of ASU 2016-02, Leases (Topic 842) | (3,387) | (3,387) | |||
Issuance of RSU's | $ 15 | (15) | |||
Issuance of RSU's (in shares) | 151,056 | ||||
Share Based Compensation | 1,977,930 | 1,977,930 | |||
Net (Loss) | (8,887,305) | (8,887,305) | |||
Balance, Ending at Mar. 31, 2019 | $ 4,796 | 201,674,571 | $ (5,250) | (161,895,062) | 39,779,055 |
Balance, Ending (in shares) at Mar. 31, 2019 | 47,965,371 | (522,957) | |||
Balance, Beginning at Dec. 31, 2018 | $ 4,781 | 199,696,656 | $ (5,250) | (153,004,370) | 46,691,817 |
Balance, Beginning (in shares) at Dec. 31, 2018 | 47,814,315 | (522,957) | |||
Net (Loss) | (16,622,892) | ||||
Balance, Ending at Jun. 30, 2019 | $ 4,816 | 203,439,869 | $ (5,250) | (169,630,649) | 33,808,786 |
Balance, Ending (in shares) at Jun. 30, 2019 | 48,161,066 | (522,957) | |||
Balance, Beginning at Mar. 31, 2019 | $ 4,796 | 201,674,571 | $ (5,250) | (161,895,062) | 39,779,055 |
Balance, Beginning (in shares) at Mar. 31, 2019 | 47,965,371 | (522,957) | |||
Issuance of RSU's | $ 20 | (20) | |||
Issuance of RSU's (in shares) | 195,695 | ||||
Share Based Compensation | 1,765,318 | 1,765,318 | |||
Net (Loss) | (7,735,587) | (7,735,587) | |||
Balance, Ending at Jun. 30, 2019 | $ 4,816 | $ 203,439,869 | $ (5,250) | $ (169,630,649) | $ 33,808,786 |
Balance, Ending (in shares) at Jun. 30, 2019 | 48,161,066 | (522,957) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (Loss) | $ (16,622,892) | $ (17,320,742) |
Adjustments to Reconcile Net (Loss) to Net Cash (Used in) Operating Activities: | ||
Stock Based Compensation | 3,743,248 | 3,172,078 |
Provision for Bad Debts | 33,956 | 84,350 |
Provision for Excess and Obsolete Inventory | 539,758 | 2,805,609 |
Depreciation and Amortization Expense | 1,453,668 | 1,544,003 |
Gain on Sale of Fixed Assets | (9,000) | (758) |
(Increase) Decrease in: | ||
Accounts Receivable - Trade | (1,781,070) | (499,578) |
Inventories | (175,212) | (3,590,891) |
Prepaid Expenses and Other Current Assets | 15,986 | 83,139 |
Other Non-Current Assets | 100,000 | |
Increase (Decrease) in: | ||
Accounts Payable | 369,589 | 1,227,391 |
Deferred Revenue | (46,950) | 7,317 |
Accrued Other Expenses and Bonuses | (310,903) | 87,765 |
Net Cash (Used) in Operating Activities | (12,689,822) | (12,400,317) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Equipment | (2,203,948) | (1,270,486) |
Net Cash (Used) in Investing Activities | (2,203,948) | (1,270,486) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal Payment of Finance Leases | (36,086) | |
Payment of Bank Loans | (249,097) | (239,840) |
Net Cash (Used) in Financing Activities | (285,183) | (239,840) |
(Decrease) in Cash and Restricted Cash | (15,178,953) | (13,910,643) |
Cash, Cash Equivalents and Restricted Cash: | ||
Beginning Cash, Cash Equivalents and Restricted Cash | 19,271,642 | 18,332,702 |
Total Cash, Cash Equivalents and Restricted Cash | 4,092,689 | 4,422,059 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and Cash Equivalents | 4,092,689 | 3,406,331 |
Restricted Cash | 1,015,728 | |
Total Cash, Cash Equivalents and Restricted Cash | 4,092,689 | 4,422,059 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash Paid for Income Taxes | 9,612 | 8,650 |
Cash Paid for Interest | 47,011 | 108,796 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES | ||
Increase (Decrease) in Accrued Capital Expenditures | $ (269,214) | $ 1,017,300 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
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 presentation of all periods presented. The results of operations of Adamis Pharmaceuticals Corporation ("the Company") for any interim periods are not necessarily indicative of the results of operations for any other interim periods or for a full fiscal year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Liquidity and Capital Resources The Company's cash and cash equivalents were $4,092,689 and $19,271,642 at June 30, 2019 and December 31, 2018, respectively. 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 will need significant 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. The condensed consolidated financial statements included elsewhere herein for the three and six months ended June 30, 2019, were prepared under the assumption that we would continue our operations as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Our unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Management’s plans include attempting to secure additional required funding through equity or debt financings, sales or out-licensing of intellectual property assets, products, product candidates or technologies, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions, and through revenues from existing agreements and sales of prescription compounded formulations. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. 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 for the three and six month periods ended June 30, 2019 and June 30, 2018 consist of outstanding equity classified warrants (2,134,670 and 3,166,995, respectively), outstanding options (8,346,058 and 9,352,243, respectively), and outstanding restricted stock units (3,681,796 and 1,642,212, respectively). Prior Periods Reclassifications Certain amounts in prior periods have been reclassified to conform with current period presentation related to the reserve for inventory obsolescence in the condensed consolidated statement of cash flows and had no effect on cash used in operations or statement of cash flows for the periods ended June 30, 2019 and June 30, 2018. The reclassification has no effect on the condensed consolidated balance sheet as of June 30, 2019 and December 31, 2018, or the condensed consolidated statement of operations for the three months and six months ended June 30, 2019 and June 30, 2018. Recently Adopted Accounting Pronouncement In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02 Leases Leases , Other key practical expedients elected by the Company (as a lessee) relate to maintaining leases with an initial term of 12 months or less off the balance sheet; not separating lease and non-lease components and the use of the portfolio approach to determine the incremental borrowing rate. For transition purposes, the Company used the incremental borrowing rate based on the total lease term and total minimum rental payments. The Company completed its identification of leases which comprised two building leases and two equipment leases. Further, the Company analyzed service contracts and parts assembly arrangements from suppliers and did not identify any material leases of production equipment. On the date of initial application, the Company recognized right-of-use ("ROU") assets and leasing liabilities on its condensed consolidated balance sheets of approximately $2 million. The adoption had no significant impact on the Company's condensed consolidated statement of operations. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2019 | |
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 Adamis is a specialty biopharmaceutical company focused on developing and commercializing products in the therapeutic areas of respiratory disease and allergy. Our subsidiary U.S. Compounding, Inc. or USC provides prescription compounded medications, including compounded sterile preparations and nonsterile compounds, to patients, physician clinics, hospitals, surgery centers and other clients throughout most of the United States. USC’s product offerings broadly include, among others, corticosteroids, hormone replacement therapies, hospital outsourcing products, injectables, urological preparations, topical compounds for pain and men’s and women’s health products. Adamis and USC have contracts with customers when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. Effective July 1, 2018 (the “Effective Date”), Adamis signed an exclusive distribution and commercialization agreement with Sandoz, Inc. (“Sandoz”). This agreement grants Sandoz the exclusive rights to market, sell and distribute the Company’s SYMJEPI™ epinephrine pre-filled syringe injectable products (“Products”) throughout the United States only. There is currently no distributor for markets outside the United States. The Company generates revenue from this agreement by manufacturing and supplying Sandoz with Products. The Company's performance obligation is to manufacture and supply the Products to Sandoz. The initial term for the agreement with Sandoz began on the Effective Date and shall continue for a period of 10 years from the first launch of Product in the United States, unless terminated earlier in accordance with its terms. The term will automatically renew for one year terms after the initial 10-year term and subsequent renewal terms, unless terminated by either party. The revenue arrangement consists of a single performance obligation, which is satisfied at the point in time when the Product is delivered to the carrier, as control, title and risk of loss is passed on to Sandoz upon delivery of the products to the carrier. The Company has the following payment considerations with Sandoz: (1) Fixed consideration. One-time milestone payment, which grants Sandoz the material right for the distribution and commercialization of the Product in the United States market only. This one-time milestone payment is a non-refundable up-front fee. Revenue from this up-front fee is recognized over the initial 10-year term of the contract, which is substantially the expected customer life. The period of recognition is subject to adjustment if the expected customer life changes; and (2) Variable considerations which are recognized upon satisfaction of the performance obligation, comprised of the following: (i) Firm Orders consisting of purchase orders specifying quantities ordered by Sandoz. Sandoz is obligated to pay Adamis for Products ordered based on a supply pricing arrangement plus additional cost of shipping and distribution. This variable consideration does not require estimation, as the terms of the variable payment relate to the Company's efforts to satisfy distinct goods in the contract; (ii) Profit sharing arrangement, which requires Sandoz to pay Adamis 50% of the net profit generated from the sale of Products by Sandoz over a given quarter. The variable consideration from profit sharing is estimated based on current sales levels and historical experience using the expected value method, subject to constraint; and (iii) Commercial milestone payments that are payable upon the Company's successful achievement of certain milestone events specified under the agreement. There are five commercial milestone events, based on certain revenue thresholds from Products sold over the term. The variable consideration from milestone payments is estimated using the most likely amount method, subject to constraint. In accordance to ASC 606, an estimate of the expected net profit share or commercial milestone payments that the Company has present rights to, shall be recognized when there is a basis to reasonably estimate the amount of these considerations and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Revenues do not include any state or local taxes collected from customers on behalf of governmental authorities. The Company made the accounting policy election to continue to exclude these amounts from revenues. With respect to sales of prescription compounded medications by our USC subsidiary, revenue arrangements consist of a single performance obligation which is satisfied at the point in time when goods are delivered to the customer. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. The contracts between the Company and the customers provide that the transaction price for medication sales is adjusted for estimated product returns that the Company expects to occur under its return policy based upon historical return rates, which have historically been immaterial. In rare cases when the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes. The Company has extensive experience with the types of contracts entered with customers regarding sales of medications by USC, and does not have a history of offering a broad range of price concessions or payment term changes. The Company believes a significant reversal in the amount of cumulative revenue recognized from such contracts is neither probable nor significant. The transaction price for all transactions is based on the price reflected in the individual customer’s purchase order. Variable consideration has not been identified as a significant component of the transaction price for any of our transactions regarding sales of medications by USC. Disaggregation of Revenue As operations under a sterile environment is covered by Section 503B of the U.S. Food, Drug & Cosmetic Act, as amended, and the U.S. Drug Quality and Security Act, USC’s sterile 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 Company outsources the manufacturing of the SYMJEPI product to third party manufacturers who bear the responsibility of maintaining a suitable environment as governed by specific regulatory and quality requirements. The following table presents the Company's revenues disaggregated by outsourced manufacturing, sterile and non-sterile regulatory environments for the three months and six months ended June 30, 2019 and 2018. Three Months Ended June 30 Six Months Ended June 30 2019 2018 2019 2018 Outsourced Manufacturing $ 1,119,584 $ — $ 1,584,573 $ — Sterile 3,324,679 2,111,509 6,498,814 3,882,245 Non-Sterile 1,320,636 1,809,057 2,587,284 3,217,555 Total $ 5,764,899 $ 3,920,566 $ 10,670,671 $ 7,099,800 The Company's revenues relating to its FDA approved product SYMJEPI are dependent on an exclusive distribution agreement with Sandoz and the Company’s pharmacy formulations rely, in large part, on sales generated from clinics and hospital customers. Adverse economic conditions pose a risk that the Company’s customers may reduce or cancel spending, which would impact the Company’s revenues. The following table presents the Company's revenue disaggregated by end market for the three months and six months ended June 30, 2019 and 2018. Three Months Ended June 30 Six Months Ended June 30 2019 2018 2019 2018 Distribution Channel - Sandoz $ 1,119,584 $ — $ 1,584,573 $ — Clinics/Hospitals 4,428,879 3,365,302 8,473,072 6,117,912 Direct to Patients 216,436 555,264 613,026 981,888 Total $ 5,764,899 $ 3,920,566 $ 10,670,671 $ 7,099,800 Deferred Revenue Deferred Revenue are contract liabilities that the Company records when cash payments are received or due in advance of the Company's satisfaction of performance obligations. The Company’s performance obligation is met when control of the promised goods is transferred to the Company's customers. For the three months ended June 30, 2019 and 2018, $28,248 and $12,043 of the revenues recognized were reported as deferred revenue as of March 31, 2019 and 2018, respectively, and for the six months ended June 30, 2019 and 2018, $61,246 and $14,758 of the revenues recognized were reported as contract liabilities as of December 31, 2018 and 2017, respectively. Included in the deferred revenue at June 30, 2019 and December 31, 2018 was $950,000 and $1.0 million, respectively, relating to the non-refundable upfront payment received from Sandoz 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 and the Company expects to recover such costs. The deferred costs, reported in the prepaid expenses and other current assets and other non-current assets on the Company’s Condensed Consolidated Balance Sheets, will be amortized over the economic benefit period of the contract. The Company capitalized the $2.0 million fee paid to a financial advisor as an incremental cost of obtaining a contract to commercialize and distribute the Company’s first FDA approved product SYMJEPI with Sandoz. The costs were deferred and will be amortized over the economic benefit period estimated to be approximately 10 years from date of product launch, based on the contract term. The period of recognition is subject to adjustment in future periods if the expected customer life changes. The deferred costs were classified as current or non-current in the Company’s condensed consolidated balance sheets based on the timing of when the Company expects to recognize the expense. As of June 30, 2019 and December 31, 2018, the Company had $1,900,000 and $2.0 million, respectively, of deferred costs related to obtaining a contract with $100,000 and $50,000 amortized to Selling, General and Administrative expenses during the six months and three months ended June 30, 2019, respectively. Practical Expedients As part of the adoption of the ASC Topic 606, the Company elected to use the following practical expedients (i) incremental costs of obtaining a contract in the form of sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded within Selling, General and Administrative expenses; (ii) taxes collected from customers and remitted to government authorities and that are related to the sales of the Company’s products, are excluded from revenues; (iii) shipping and handling activities are accounted for as fulfillment costs and recorded in cost of sales. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3: Inventories Inventories at June 30, 2019 and December 31, 2018 consisted of the following: June 30, 2019 December 31, 2018 Finished Goods $ 1,296,494 $ 1,320,738 Raw Material 417,853 527,308 Devices 1,200,139 1,430,986 $ 2,914,486 $ 3,279,032 Reserve for obsolescence as of June 30, 2019 and December 31, 2018 was approximately $225,000 and $526,000, respectively. |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 4: Fixed Assets Fixed assets at June 30, 2019 and December 31, 2018 are summarized in the table below: Description Useful Life June 30, 2019 December 31, 2018 Building 30 $ 3,040,000 $ 3,040,000 Machinery and Equipment 3 - 7 2,473,988 2,244,744 Furniture and Fixtures 7 126,654 126,654 Automobile 5 9,500 9,395 Leasehold Improvements 7 - 15 284,037 284,037 Total Fixed Assets 5,934,179 5,704,830 Less: Accumulated Depreciation (1,869,895 ) (1,578,049 ) Land 460,000 460,000 Construction In Progress - Equipment 6,977,128 5,281,140 Fixed Assets, net $ 11,501,412 $ 9,867,921 Depreciation expense for the three months ended June 30, 2019 and 2018 was approximately $145,000 and $154,000, respectively; and for the six months ended June 30, 2019 and 2018, depreciation expense was approximately $301,000 and $306,000, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 5: Intangible Assets and Goodwill Intangible assets at June 30, 2019 and December 31, 2018 are summarized in the tables below: June 30, 2019 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (5,339,785 ) $ 4,368,915 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (1,275,866 ) 2,687,134 Non-compete Agreement - USC, 3 years 1,639,000 (1,639,000 ) — Customer Relationships - USC, 10 years 5,572,000 (1,793,874 ) 3,778,126 Website Design - USC, 3 years 25,163 (12,571 ) 12,592 Total Definite-lived Assets 21,102,063 (10,255,296 ) 10,846,767 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 SYMJEPI Domain Name 9,674 — 9,674 Balance, June 30, 2019 $ 22,356,737 $ (10,255,296 ) $ 12,101,441 December 31, 2018 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (4,854,350 ) $ 4,854,350 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (1,077,716 ) 2,885,284 Non-compete Agreement, 3 years 1,639,000 (1,485,721 ) 153,279 Customer Relationships, 10 years 5,572,000 (1,515,274 ) 4,056,726 Website Design, 3 years 16,163 (9,880 ) 6,283 Total Definite-lived Assets 21,093,063 (9,137,141 ) 11,955,922 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 SYMJEPI Domain Name 9,674 — 9,674 Balance, December 31, 2018 $ 22,347,737 $ (9,137,141 ) $ 13,210,596 Amortization expense for the three months ended June 30, 2019 and 2018 was approximately $499,000 and $619,000, respectively; and for the six months ended June 30, 2019 and 2018, amortization expense was approximately $1,118,000 and $1,238,000, respectively. Estimated amortization expense of definite-lived intangible assets at June 30, 2019 for each of the five succeeding years and thereafter is as follows: Year ending December 31, Remainder of 2019 $ 966,379 2020 1,927,370 2021 1,927,370 2022 1,926,768 2023 1,924,370 Thereafter 2,174,510 Total $ 10,846,767 Goodwill recorded related to the acquisition of USC in 2016 was approximately $7,641,000. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized but rather evaluated for impairment annually or more frequently, if indicators of impairment exist. If the impairment evaluations for goodwill indicate the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to that excess. The carrying value of the Company's goodwill as of June 30, 2019 and December 31, 2018 was approximately $7,641,000. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 6: Leases The Company has two operating leases, one for an office space and another for an office space and manufacturing facility; and two finance leases for an office equipment and plant equipment. As of June 30, 2019, the leases have remaining terms between four months and less than five years. The operating leases do not include an option to extend beyond the life of the current term. There are no short-term leases, and the lease agreements do not require material variable lease payments, residual value guarantees or restrictive covenants. The tables below present the operating and financing lease assets and liabilities recognized on the condensed consolidated balance sheets as of June 30, 2019: Right-of Use Assets June 30, 2019 Operating Leases $ 2,083,901 Financing Leases 35,212 $ 2,119,113 Lease Liabilities, Current June 30, 2019 Operating Leases $ 412,424 Financing Leases 32,977 $ 445,401 Lease Liabilities, Non-Current Operating Leases $ 1,702,123 Financing Leases 3,807 $ 1,705,930 Total Lease Liabilities $ 2,151,331 The amortizable lives of operating and financing leased assets are limited by the expected lease term. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating and financing lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for leases that commenced prior to that date. The Company's weighted average remaining lease term and weighted average discount rate for operating and financing leases as of June 30, 2019 are: June 30, 2019 Operating Financing Weighted Average Remaining Lease Term 4.44 Years .65 Years Weighted Average Discount Rate 3.95 % 3.95 % The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheets as of June 30, 2019: June 30, 2019 Operating Financing Remainder of 2019 $ 235,229 $ 31,180 2020 508,056 4,651 2021 520,993 1,550 2022 534,295 — 2023 515,257 — Undiscounted Future Minimum Lease Payments 2,313,830 37,381 Less: Difference between undiscounted lease payments and discounted lease liabilities 199,283 597 Total Lease Liabilities $ 2,114,547 $ 36,784 Operating lease expense was approximately $128,000 and $257,000 for the three months and six months ended June 30, 2019. Operating lease costs are included within selling, general and administrative expenses on the condensed consolidated statements of operations. Financing lease costs for the three months and six months ended June 30, 2019 included approximately $18,000 and $34,000, respectively, in right-of-use asset amortization and approximately $400 and $1,000, respectively, of interest expense. Financing lease costs are included within selling, general and administrative expenses on the condensed consolidated statements of operations. Cash paid for amounts included in the measurement of operating lease liabilities were approximately $260,000 for the six months ended June 30, 2019. Cash paid for amounts included in the measurement of financing lease liabilities were approximately $37,000 for the six months ended June 30, 2019. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
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 (see 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 Ben Franklin 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 March 28, 2016, the Company entered into a loan and security agreement (“Adamis Working Capital Line”) with Bear State Bank, N.A. (the “Lender” or the “Bank”), pursuant to which the Company may borrow up to an aggregate of $2,000,000 to provide working capital to USC, subject to the terms and conditions of the loan agreement. Interest on amounts borrowed under the Adamis Working Capital Line accrues at a rate equal to the prime interest rate, as defined in the agreement. Interest payments are required to be made quarterly. As amended, the entire outstanding principal balance, and all accrued and unpaid interest and all other sums payable pursuant to the loan documents, were due and payable on June 1, 2018. The Company’s obligations under the loan agreement were secured by certain collateral, including without limitation its interest in amounts that it has loaned to USC, and a warrant that the Company issued to the Bank to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price equal to par value per share. The warrant was exercisable only if the Company is in default under the loan agreement or related loan documents, the Lender delivers a notice to the Company and the Company does not cure the default within the applicable cure period. If the warrant became exercisable, then Lender may exercise the warrant in whole or in part, from time to time, to acquire warrant shares in a number that the Lender believes will, upon sale of such shares, be sufficient to cure or pay off the Company’s obligations due to the Lender under the loan documents. Under the terms of the Warrant, the Lender agreed that following any exercise of the warrant, Lender will use its best efforts to sell as promptly as reasonably practicable following such exercise, the shares of common stock acquired by the Lender upon such exercise, and that all of the net proceeds from such sales of warrant shares will be applied in satisfaction of the Company’s obligations under the loan documents. On June 28, 2018, the Company and the Lender amended the warrant and the loan and security agreement to provide that effective as of June 1, 2018, if the Company has not paid in full all amounts that are required to be paid to the Lender under the loan documents on or before the maturity date of the loan, then the Lender may exercise the Warrant, in whole or in part, to acquire a number of warrant shares as described above. In July 2018, the Lender delivered a notice of exercise of the warrant and sold warrant shares in an amount sufficient to satisfy substantially all of the outstanding principal balance of the loan. The Company paid in cash the remaining principal and accrued unpaid interest, and there is no outstanding balance under the Adamis Working Capital Line. There was no gain or loss upon extinguishment of the debt. The Adamis Working Capital Line was not renewed and the account was closed as of December 31, 2018. In addition, the Lender released the Company’s $1.0 million restricted Certificate of Deposit that had served as additional collateral for the Adamis Working Capital Line, and the amount is no longer restricted cash. As of June 30, 2019 and December 31, 2018, the loan balance on the Adamis Working Capital Line of credit was $0. Interest expense related to the loan for the three months ended June 30, 2019 and 2018 was approximately $0 and $24,000, respectively; and for the six months ended June 30, 2019 and 2018, interest expense was approximately $0 and $47,000, respectively. Loans Assumed from Acquisition of USC: Building Loan In connection with the closing of the acquisition of USC by the Company and the agreements relating to the transaction, an entity of which certain or former officers or stockholders of USC are members, agreed to sell to the Company, the building and property owned by the entity 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 the entity and certain other parties previously entered into with the Lender. 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 Document due and payable in August 2019. As of June 30, 2019 and December 31, 2018, the outstanding principal balance owed on the applicable note was approximately $2,199,000 and $2,249,000, respectively. The loan currently bears an interest of 3.75% per year. Interest expense for the three month periods ended June 30, 2019 and 2018 was approximately $21,000 and $22,000, respectively; and for the six month periods ended June 30, 2019 and 2018, interest expense was approximately $42,000 and $44,000, respectively. Equipment Loans, Consolidated Equipment Loan, Tribute USC Equipment Loan. Consolidated Equipment Loans Loan Amendment, Forbearance and Assumption Agreement In connection with the Company's acquisition of USC in April 2016, 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 borrowers under each of the USC Loan Documents. 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. The notes included in the USC Loan Documents 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 June 30, 2019, the Company was not in breach of any of the debt covenants or subjective acceleration clauses. At June 30, 2019, the outstanding principal maturities of the amended long-term debts were as follows: Years ending December 31, Building Loan Equipment Loan Total Remainder of 2019 $ 2,199,297 $ 134,740 $ 2,334,037 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 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, inventory, accounts payable, notes payable, accrued liabilities and other payables approximate their fair values due to their short-term nature. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9: Commitments and Contingencies The Company may become involved in or subject to, routine litigation, claims, disputes, proceedings and investigations in the ordinary course of business, which in management’s opinion will not have a material adverse effect on our financial condition, cash flows or results of operations. Any such litigation could divert management time and attention from Adamis, could involve significant amounts of legal fees and other fees and expenses. Litigation with Belcher Pharmaceuticals On September 26, 2018, the Company brought action against Belcher Pharmaceuticals, LLC (“Belcher”) in the United States District Court for the Middle District of Florida for a declaratory judgment (“Complaint”) of non-infringement of certain patents in which Belcher claims rights, relating to certain methods of preparing epinephrine solutions and treating allergic reactions using a method of preparing certain epinephrine solutions (collectively the “Patents-in-Suit”). The Complaint sought a declaratory judgment that the company’s SYMJEPI (epinephrine) Injection product (“SYMJEPI”) does not infringe the Patents-in-Suit. On November 7, 2018, Belcher filed its Answer and Counterclaim to the Complaint and alleged that the Company infringes the Patents-in-Suit as a result of the SYMJEPI product. Belcher’s Counterclaim seeks damages and injunctive relief in conjunction with the infringement claims. The Company responded to the Counterclaim by generally denying any wrongdoing and asserting the affirmative defense that the Patents-in-Suit are invalid. The parties exchanged initial disclosures and initiated discovery in January 2019. On December 28, 2018, Belcher filed a reissue application for one of the Patents-in-Suit seeking to amend the asserted claims and correct an improper benefit claim. On March 29, 2019, the parties agreed to stay the litigation at the District Court pending the outcome of the reissue application and the Company’s petition for inter partes On July 24, 2019, the Company announced that Adamis and Belcher Pharmaceuticals, LLC (“Belcher”) agreed to settle all previously filed litigation between the parties, including the case filed by Adamis in the United States District Court for the Middle District of Florida in which Adamis was seeking a declaratory judgment of non-infringement of certain patents in which Belcher claimed rights, relating to certain methods of preparing epinephrine solutions (“Patent Case”), and the inter partes Litigation with kaléo Inc On May 21, 2019, the Company announced that on May 20, 2019, it received notice that it had been named and served as a defendant in a lawsuit filed by kaléo Inc. in the United States District Court for the District of Delaware regarding Adamis’ higher dose naloxone injection product candidate, ZIMHI, for the treatment of opioid overdose, for which Adamis has previously submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) that is being reviewed by the agency. The complaint alleges, among other things, that the company’s product candidate infringes patents purportedly held by kaléo relating to its naloxone auto-injector product. The action was filed under the provisions of the Hatch-Waxman Act in response to Adamis’ Paragraph IV certification regarding the kaléo patents as part of the company’s NDA process, and results in an automatic stay of any final approval by the FDA of Adamis’ NDA. On June 21, 2019, the Company filed two motions in the United States District Court for the District of Delaware in response to kaléo’s patent infringement lawsuit relating to ZIMHI. The first was a motion to disqualify Cooley LLP as counsel to kaléo based on, among other things, conflicts of interest and violation of applicable ethical rules. The second was a motion to dismiss the entire lawsuit for lack of subject matter jurisdiction. Adamis filed an amendment to its original new drug application (“NDA”) removing any reference to kaléo’s EVZIO® product, which Adamis contends prevents kaléo from claiming infringement under the Hatch-Waxman Act. On the same day, Adamis filed a separate lawsuit in the United States District Court for the Eastern District of Virginia against kaléo, Inc. for cybersquatting under 15 U.S.C. § 1125(d), unfair competition under 15 U.S.C. § 1125(a), and common law unfair competition and trademark infringement for kaléo’s use of Adamis’ SYMJEPI trademark. With this lawsuit, Adamis is seeking injunctive relief to prevent kaléo from using Adamis’ SYMJEPI trademark and damages for kaléo’s past use of Adamis’ SYMJEPI trademark in commerce. On July 18, 2019, the Company announced that Adamis and kaléo Inc. agreed to settle all previously announced litigation between the parties, including the case filed by kaléo in the United States District Court for the District of Delaware in which kaléo claimed specified aspects of Adamis’ ZIMHI naloxone product infringed certain kaléo-owned patents, and the case filed by Adamis in the United States District Court for the Eastern District of Virginia in which Adamis claimed specified actions by kaléo infringed Adamis’ SYMJEPI trademark. As part of the resolution of the current litigation, kaléo agreed not to bring future action against Adamis relating to ZIMHI so long as Adamis does not reference kaléo’s product in a future filing with the FDA, and Adamis agreed not to bring future action against kaléo for acts that occurred prior to the settlement date. Other The Company has a production threshold commitment to a manufacturer of our SYMJEPI Products where the Company would be required to pay for maintenance fees if it does not meet certain periodic purchase order minimums. Any such maintenance fees would be prorated as a percentage of the required minimum production threshold. The Company believes that the production thresholds will be met in the succeeding periods, or if not that the fees will not be material, as they are prorated based on actual production. |
Stock Option Plans, Shares Rese
Stock Option Plans, Shares Reserved and Warrants | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Plans, Shares Reserved and Warrants | Note 10: Stock Option Plans, Shares Reserved and Warrants On January 1, 2019, pursuant to the 2009 Equity Incentive Plan the number of shares reserved for the issuance of stock awards increased by 2,364,568 shares. On January 30, 2019, the Company granted options to purchase 90,000 shares of common stock to the non-employee directors of the Company under the 2009 Plan with an exercise price of $3.09 per share. The options will vest over a period of one year. These options were valued using the Black-Scholes option pricing model, the expected volatility was approximately 56%, the term was six years, the dividend rate was 0.0 % and the risk-free interest rate was approximately 2.6%, which resulted in a calculated fair value of approximately $152,000. On January 30, 2019, the Company awarded Restricted Stock Units (“RSUs”) covering 2,349,350 shares of common stock to the officers and employees of the Company under the 2009 Plan; as of the date of grant, the market price of the common stock was $3.09 per share. These RSUs vest in equal amounts each quarter on the determined date over a period of three years from grant date provided that the recipient has continued to provide services to the Company, or earlier upon the occurrence of certain events including a Change in Control of the Company (as defined in the 2009 Plan), or earlier upon the recipient’s separation from service to the Company by reason of death or disability (as defined in the 2009 Plan). The calculated fair value of the RSUs was approximately $7,259,000. On January 30, 2019, the Company awarded RSUs covering 36,985 shares of common stock to an employee of the Company under the 2009 Plan; as of the date of grant, the market price of the common stock was $3.09 per share. These RSUs were vested in full at grant date. The calculated fair value of the RSUs was approximately $114,000. The following summarizes the stock option activity for the six months ended June 30, 2019 below: 2009 Equity Incentive Plan Weighted Average Exercise Price Weighted Average Remaining Contract Life Outstanding Options as of December 31, 2018 9,298,101 $ 4.40 7.92 years Options Granted 90,000 3.09 9.59 years Options Cancelled/Expired (1,042,043 ) 4.34 — Outstanding Options as of June 30, 2019 8,346,058 $ 4.38 6.89 years Exercisable at June 30, 2019 6,551,706 $ 4.72 6.46 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 8,346,058 and 9,298,101 stock options outstanding at June 30, 2019 and December 31, 2018 was $0, respectively. The aggregate intrinsic value of 6,551,706 and 6,130,337 stock options exercisable at June 30, 2019 and December 31, 2018 was $0, respectively. The following summarizes warrants outstanding at June 30, 2019 and December 31, 2018: Warrant Exercise Price Date Expiration June 30, 2019 Shares Per Share Issued Date Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 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 Common Stock, Private Placement 700,000 $ 2.98 August 3, 2016 August 3, 2021 Total Warrants 2,134,670 December 31, 2018 Warrant Shares Exercise Price Per Share Date Issued Expiration Date Old Adamis Warrants 58,824 $ 8.50 November 15, 2007 November 15, 2019 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 Common Stock, Private Placement 700,000 $ 2.98 August 3, 2016 August 3, 2021 Total Warrants 2,138,887 The following table summarizes the RSUs outstanding at June 30, 2019 and December 31, 2018: June 30, 2019 RSU Shares 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 228,141 (2) $ 2.83 February 21, 2018 Company Executives and Employees 2,153,655 (3) $ 3.09 January 30, 2019 Total RSUs 3,681,796 (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. (3) The RSUs vest ratably quarterly over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability. December 31, 2018 RSU Shares 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 June 30, 2019 and 2018 was approximately $882,000 and $305,000, respectively; and for the six months ended June 30, 2019 and 2018, expense related to RSUs was approximately $1,684,000 and $563,000, respectively. At June 30, 2019, the Company has reserved shares of common stock for issuance upon exercise of outstanding options and warrants, convertible preferred stock shares and options granted under the 2009 Equity Incentive Plan, as follows: Warrants 2,134,670 Restricted Stock Units (RSU) 3,681,796 2009 Equity Incentive Plan 8,346,058 Total Shares Reserved 14,162,524 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11: Subsequent Events Litigation with Belcher Pharmaceuticals On July 24, 2019, the Company announced that Adamis and Belcher Pharmaceuticals, LLC (“Belcher”) agreed to settle all previously filed litigation between the parties, including the case filed by Adamis in the United States District Court for the Middle District of Florida in which Adamis was seeking a declaratory judgment of non-infringement of certain patents in which Belcher claimed rights, relating to certain methods of preparing epinephrine solutions (“Patent Case”), and the inter partes Litigation with kaléo Inc On July 18, 2019, the Company announced that Adamis and kaléo Inc. agreed to settle all previously announced litigation between the parties, including the case filed by kaléo in the United States District Court for the District of Delaware in which kaléo claimed specified aspects of Adamis’ ZIMHI naloxone product infringed certain kaléo-owned patents, and the case filed by Adamis in the United States District Court for the Eastern District of Virginia in which Adamis claimed specified actions by kaléo infringed Adamis’ SYMJEPI trademark. As part of the resolution of the current litigation, kaléo agreed not to bring future action against Adamis relating to ZIMHI so long as Adamis does not reference kaléo’s product in a future filing with the FDA, and Adamis agreed not to bring future action against kaléo for acts that occurred prior to the settlement date. Financing On August 5, 2019, the Company completed the closing of an underwritten public offering of 13,800,000 shares of common stock, and warrants (“Warrants”) to purchase up to 13,800,000 shares of common stock, which included 1,800,000 shares and Warrants to purchase up to 1,800,000 shares pursuant to the full exercise of the over-allotment option granted to the underwriters. The exercise price of the Warrants is $1.15 per share, and the Warrants are exercisable for five years. Each share of common stock was sold together with a warrant to purchase one share of common stock for a combined public offering price of $1.00 per unit. Estimated net proceeds were approximately $12.7 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. Raymond James & Associates, Inc. acted as the sole book-running manager for the offering, and Maxim Group LLC acted as lead manager for the offering. The securities were issued by the Company pursuant to a “shelf” registration statement on Form S-3 that the Company previously filed with the Securities and Exchange Commission, and a prospectus supplement and an accompanying prospectus relating to the offering. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources The Company's cash and cash equivalents were $4,092,689 and $19,271,642 at June 30, 2019 and December 31, 2018, respectively. 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 will need significant 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. The condensed consolidated financial statements included elsewhere herein for the three and six months ended June 30, 2019, were prepared under the assumption that we would continue our operations as a going concern, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Our unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Management’s plans include attempting to secure additional required funding through equity or debt financings, sales or out-licensing of intellectual property assets, products, product candidates or technologies, seeking partnerships with other pharmaceutical companies or third parties to co-develop and fund research and development efforts, or similar transactions, and through revenues from existing agreements and sales of prescription compounded formulations. There is no assurance that the Company will be successful in obtaining the necessary funding to meet its business objectives. |
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 for the three and six month periods ended June 30, 2019 and June 30, 2018 consist of outstanding equity classified warrants (2,134,670 and 3,166,995, respectively), outstanding options (8,346,058 and 9,352,243, respectively), and outstanding restricted stock units (3,681,796 and 1,642,212, respectively). |
Prior Periods Reclassifications | Prior Periods Reclassifications Certain amounts in prior periods have been reclassified to conform with current period presentation related to the reserve for inventory obsolescence in the condensed consolidated statement of cash flows and had no effect on cash used in operations or statement of cash flows for the periods ended June 30, 2019 and June 30, 2018. The reclassification has no effect on the condensed consolidated balance sheet as of June 30, 2019 and December 31, 2018, or the condensed consolidated statement of operations for the three months and six months ended June 30, 2019 and June 30, 2018. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncement In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02 Leases Leases , Other key practical expedients elected by the Company (as a lessee) relate to maintaining leases with an initial term of 12 months or less off the balance sheet; not separating lease and non-lease components and the use of the portfolio approach to determine the incremental borrowing rate. For transition purposes, the Company used the incremental borrowing rate based on the total lease term and total minimum rental payments. The Company completed its identification of leases which comprised two building leases and two equipment leases. Further, the Company analyzed service contracts and parts assembly arrangements from suppliers and did not identify any material leases of production equipment. On the date of initial application, the Company recognized right-of-use ("ROU") assets and leasing liabilities on its condensed consolidated balance sheets of approximately $2 million. The adoption had no significant impact on the Company's condensed consolidated statement of operations. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 outsourced manufacturing, sterile and non-sterile regulatory environments for the three months and six months ended June 30, 2019 and 2018. Three Months Ended June 30 Six Months Ended June 30 2019 2018 2019 2018 Outsourced Manufacturing $ 1,119,584 $ — $ 1,584,573 $ — Sterile 3,324,679 2,111,509 6,498,814 3,882,245 Non-Sterile 1,320,636 1,809,057 2,587,284 3,217,555 Total $ 5,764,899 $ 3,920,566 $ 10,670,671 $ 7,099,800 The following table presents the Company's revenue disaggregated by end market for the three months and six months ended June 30, 2019 and 2018. Three Months Ended June 30 Six Months Ended June 30 2019 2018 2019 2018 Distribution Channel - Sandoz $ 1,119,584 $ — $ 1,584,573 $ — Clinics/Hospitals 4,428,879 3,365,302 8,473,072 6,117,912 Direct to Patients 216,436 555,264 613,026 981,888 Total $ 5,764,899 $ 3,920,566 $ 10,670,671 $ 7,099,800 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories at June 30, 2019 and December 31, 2018 consisted of the following: June 30, 2019 December 31, 2018 Finished Goods $ 1,296,494 $ 1,320,738 Raw Material 417,853 527,308 Devices 1,200,139 1,430,986 $ 2,914,486 $ 3,279,032 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets at June 30, 2019 and December 31, 2018 are summarized in the table below: Description Useful Life June 30, 2019 December 31, 2018 Building 30 $ 3,040,000 $ 3,040,000 Machinery and Equipment 3 - 7 2,473,988 2,244,744 Furniture and Fixtures 7 126,654 126,654 Automobile 5 9,500 9,395 Leasehold Improvements 7 - 15 284,037 284,037 Total Fixed Assets 5,934,179 5,704,830 Less: Accumulated Depreciation (1,869,895 ) (1,578,049 ) Land 460,000 460,000 Construction In Progress - Equipment 6,977,128 5,281,140 Fixed Assets, net $ 11,501,412 $ 9,867,921 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets at June 30, 2019 and December 31, 2018 are summarized in the tables below: June 30, 2019 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (5,339,785 ) $ 4,368,915 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (1,275,866 ) 2,687,134 Non-compete Agreement - USC, 3 years 1,639,000 (1,639,000 ) — Customer Relationships - USC, 10 years 5,572,000 (1,793,874 ) 3,778,126 Website Design - USC, 3 years 25,163 (12,571 ) 12,592 Total Definite-lived Assets 21,102,063 (10,255,296 ) 10,846,767 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 SYMJEPI Domain Name 9,674 — 9,674 Balance, June 30, 2019 $ 22,356,737 $ (10,255,296 ) $ 12,101,441 December 31, 2018 Gross Accumulated Net Carrying Definite-lived Intangible assets, estimated lives in years: Patents, Taper DPI Intellectual Property, 10 years $ 9,708,700 $ (4,854,350 ) $ 4,854,350 Transition Services Agreement, 1 year 194,200 (194,200 ) — FDA 503B Registration & Compliance - USC, 10 years 3,963,000 (1,077,716 ) 2,885,284 Non-compete Agreement, 3 years 1,639,000 (1,485,721 ) 153,279 Customer Relationships, 10 years 5,572,000 (1,515,274 ) 4,056,726 Website Design, 3 years 16,163 (9,880 ) 6,283 Total Definite-lived Assets 21,093,063 (9,137,141 ) 11,955,922 Trade Name and Brand - USC, Indefinite 1,245,000 — 1,245,000 SYMJEPI Domain Name 9,674 — 9,674 Balance, December 31, 2018 $ 22,347,737 $ (9,137,141 ) $ 13,210,596 |
Schedule of estimated future amortization expense | Estimated amortization expense of definite-lived intangible assets at June 30, 2019 for each of the five succeeding years and thereafter is as follows: Year ending December 31, Remainder of 2019 $ 966,379 2020 1,927,370 2021 1,927,370 2022 1,926,768 2023 1,924,370 Thereafter 2,174,510 Total $ 10,846,767 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of the operating and financing lease assets and liabilities | The tables below present the operating and financing lease assets and liabilities recognized on the condensed consolidated balance sheets as of June 30, 2019: Right-of Use Assets June 30, 2019 Operating Leases $ 2,083,901 Financing Leases 35,212 $ 2,119,113 Lease Liabilities, Current June 30, 2019 Operating Leases $ 412,424 Financing Leases 32,977 $ 445,401 Lease Liabilities, Non-Current Operating Leases $ 1,702,123 Financing Leases 3,807 $ 1,705,930 Total Lease Liabilities $ 2,151,331 |
Schedule of amortizable lives of operating and financing leased assets are limited by the expected lease term | The Company's weighted average remaining lease term and weighted average discount rate for operating and financing leases as of June 30, 2019 are: June 30, 2019 Operating Financing Weighted Average Remaining Lease Term 4.44 Years .65 Years Weighted Average Discount Rate 3.95 % 3.95 % |
Schedule of future minimum lease payments | The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheets as of June 30, 2019: June 30, 2019 Operating Financing Remainder of 2019 $ 235,229 $ 31,180 2020 508,056 4,651 2021 520,993 1,550 2022 534,295 — 2023 515,257 — Undiscounted Future Minimum Lease Payments 2,313,830 37,381 Less: Difference between undiscounted lease payments and discounted lease liabilities 199,283 597 Total Lease Liabilities $ 2,114,547 $ 36,784 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of principal maturities under the amended long-term debts | At June 30, 2019, the outstanding principal maturities of the amended long-term debts were as follows: Years ending December 31, Building Loan Equipment Loan Total Remainder of 2019 $ 2,199,297 $ 134,740 $ 2,334,037 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 02, 2019 | Dec. 31, 2018 | |
Cash and cash equivalents | $ 4,092,689 | $ 3,406,331 | $ 4,092,689 | $ 3,406,331 | $ 19,271,642 | |
Right-of use assets | 2,119,113 | 2,119,113 | ||||
Leasing liabilities | $ 2,151,331 | $ 2,151,331 | ||||
Accounting Standards Update 2016-02 [Member] | ||||||
Right-of use assets | $ 2,000,000 | |||||
Leasing liabilities | $ 2,000,000 | |||||
Warrants [Member] | ||||||
Potential dilutive securities, excluded from computation of earnings | 2,134,670 | 3,166,995 | 2,134,670 | 3,166,995 | ||
Stock Option [Member] | ||||||
Potential dilutive securities, excluded from computation of earnings | 8,346,058 | 9,352,243 | 8,346,058 | 9,352,243 | ||
RSU [Member] | ||||||
Potential dilutive securities, excluded from computation of earnings | 3,681,796 | 1,642,212 | 3,681,796 | 1,642,212 |
Revenues (Details)
Revenues (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 5,764,899 | $ 3,920,566 | $ 10,670,671 | $ 7,099,800 |
Outsourced Manufacturing [Member] | ||||
Revenue | 1,119,584 | 1,584,573 | ||
Sterile [Member] | ||||
Revenue | 3,324,679 | 2,111,509 | 6,498,814 | 3,882,245 |
Non-Sterile [Member] | ||||
Revenue | 1,320,636 | 1,809,057 | 2,587,284 | 3,217,555 |
Distribution Channel - Sandoz [Member] | ||||
Revenue | 1,119,584 | 1,584,573 | ||
Clinics/Hospitals [Member] | ||||
Revenue | 4,428,879 | 3,365,302 | 8,473,072 | 6,117,912 |
Direct to Patients [Member] | ||||
Revenue | $ 216,436 | $ 555,264 | $ 613,026 | $ 981,888 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenues recognized previously reported as deferred revenue | $ 28,248 | $ 12,043 | $ 61,246 | $ 14,758 | |
Distribution And Commercialization Agreement [Member] | Sandoz Inc [Member] | |||||
Maturity terms of agreement | 10 years | ||||
Agreements renewal terms | 1 year | ||||
Profit sharing agreement, percentage of net profit from sale of products to be paid | 50.00% | ||||
Description of revenue performance obligation | The Company has the following payment considerations with Sandoz: (1) Fixed consideration. One-time milestone payment, which grants Sandoz the material right for the distribution and commercialization of the Product in the United States market only. This one-time milestone payment is a non-refundable up-front fee. Revenue from this up-front fee is recognized over the initial 10-year term of the contract, which is substantially the expected customer life. The period of recognition is subject to adjustment if the expected customer life changes; and (2) Variable considerations which are recognized upon satisfaction of the performance obligation, comprised of the following: (i) Firm Orders consisting of purchase orders specifying quantities ordered by Sandoz. Sandoz is obligated to pay Adamis for Products ordered based on a supply pricing arrangement plus additional cost of shipping and distribution. This variable consideration does not require estimation, as the terms of the variable payment relate to the Company's efforts to satisfy distinct goods in the contract; (ii) Profit sharing arrangement, which requires Sandoz to pay Adamis 50% of the net profit generated from the sale of Products by Sandoz over a given quarter. The variable consideration from profit sharing is estimated based on current sales levels and historical experience using the expected value method, subject to constraint; and (iii) Commercial milestone payments that are payable upon the Company's successful achievement of certain milestone events specified under the agreement. There are five commercial milestone events, based on certain revenue thresholds from Products sold over the term. The variable consideration from milestone payments is estimated using the most likely amount method, subject to constraint. | ||||
Deferred revenue | 950,000 | $ 950,000 | $ 1,000,000 | ||
Contract To Commercialize And Distribute [Member] | |||||
Deferred costs | 1,900,000 | 1,900,000 | $ 2,000,000 | ||
Amortization of deferred costs | $ 50,000 | $ 100,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 1,296,494 | $ 1,320,738 |
Raw Material | 417,853 | 527,308 |
Devices | 1,200,139 | 1,430,986 |
Inventories | $ 2,914,486 | $ 3,279,032 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Reserve for obsolescence | $ 225,000 | $ 526,000 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Costs | $ 5,934,179 | $ 5,704,830 |
Less: Accumulated Depreciation | (1,869,895) | (1,578,049) |
Land | 460,000 | 460,000 |
Construction In Progress - Equipment | 6,977,128 | 5,281,140 |
Fixed Assets, net | 11,501,412 | 9,867,921 |
Building [Member] | ||
Costs | $ 3,040,000 | 3,040,000 |
Useful lives of fixed assets | 30 years | |
Machinery and Equipment [Member] | ||
Costs | $ 2,473,988 | 2,244,744 |
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 | $ 9,500 | 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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 145,000 | $ 154,000 | $ 301,000 | $ 306,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Gross Carrying Value - Finite-Lived Assets | $ 21,102,063 | $ 21,093,063 |
Gross Carrying Value - intangibles | 22,356,737 | 22,347,737 |
Accumulated Amortization | (10,255,296) | (9,137,141) |
Net Carrying Amount - Finite-Lived Assets | 10,846,767 | 11,955,922 |
Net Carrying Amount | 12,101,441 | 13,210,596 |
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 | (5,339,785) | (4,854,350) |
Net Carrying Amount - Finite-Lived Assets | $ 4,368,915 | $ 4,854,350 |
Transition Services 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 | (1,275,866) | (1,077,716) |
Net Carrying Amount - Finite-Lived Assets | $ 2,687,134 | $ 2,885,284 |
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 | $ (1,639,000) | (1,485,721) |
Net Carrying Amount - Finite-Lived Assets | $ 153,279 | |
Customer Relationships - USC [Member] | ||
Amortization Period | 10 years | 10 years |
Gross Carrying Value - Finite-Lived Assets | $ 5,572,000 | $ 5,572,000 |
Accumulated Amortization | (1,793,874) | (1,515,274) |
Net Carrying Amount - Finite-Lived Assets | $ 3,778,126 | $ 4,056,726 |
Website Design - USC [Member[ | ||
Amortization Period | 3 years | 3 years |
Gross Carrying Value - Finite-Lived Assets | $ 25,163 | $ 16,163 |
Accumulated Amortization | (12,571) | (9,880) |
Net Carrying Amount - Finite-Lived Assets | $ 12,592 | $ 6,283 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Estimated future amortization expense for the year ending December 31, | ||
Remainder of 2019 | $ 966,379 | |
2020 | 1,927,370 | |
2021 | 1,927,370 | |
2022 | 1,926,768 | |
2023 | 1,924,370 | |
Thereafter | 2,174,510 | |
Net Carrying Amount - Finite-Lived Assets | $ 10,846,767 | $ 11,955,922 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Amortization expense | $ 499,000 | $ 619,000 | $ 1,118,000 | $ 1,238,000 | ||
Goodwill acquired | $ 7,641,000 | |||||
Goodwill | $ 7,640,622 | $ 7,640,622 | $ 7,640,622 |
Leases (Details)
Leases (Details) | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Right-of Use Assets Operating Leases | $ 2,083,901 |
Right-of Use Assets Financing Leases | 35,212 |
Total Right-of Use Assets | 2,119,113 |
Lease Liabilities, Current Operating Leases | 412,424 |
Lease Liabilities, Current Financing Leases | 32,977 |
Total Lease Liabilities, Current | 445,401 |
Lease Liabilities, Non-current Operating Leases | 1,702,123 |
Lease Liabilities, Non-current Financing Leases | 3,807 |
Total Lease Liabilities, Non Current | 1,705,930 |
Total Lease Liabilities | $ 2,151,331 |
Leases (Details 1)
Leases (Details 1) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted Average Remaining Lease Term - Operating | 4 years 5 months 8 days |
Weighted Average Remaining Lease Term - Financing | 7 months 24 days |
Weighted Average Discount Rate - Operating | 3.95% |
Weighted Average Discount Rate - Financing | 3.95% |
Leases (Details 2)
Leases (Details 2) | Jun. 30, 2019USD ($) |
Operating leases | |
Remaining | $ 235,229 |
2020 | 508,056 |
2021 | 520,993 |
2022 | 534,295 |
2023 | 515,257 |
Undiscounted Future Minimum Lease Payments | 2,313,830 |
Less: Difference between undiscounted lease payments and discounted lease liabilities | 199,283 |
Total Lease Liabilities | 2,114,547 |
Financing leases | |
Remaining | 31,180 |
2020 | 4,651 |
2021 | 1,550 |
Undiscounted Future Minimum Lease Payments | 37,381 |
Less: Difference between undiscounted lease payments and discounted lease liabilities | 597 |
Total Lease Liabilities | $ 36,784 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Operating lease expense | $ 128,000 | $ 257,000 |
Financing lease costs, right-of-use asset amortization | 18,000 | 34,000 |
Financing lease costs, interest expense | $ 400 | 1,000 |
Cash paid operating lease | 260,000 | |
Cash paid financing lease | $ 37,000 | |
Minimum [Member] | ||
Lease terms | 4 months | |
Maximum [Member] | ||
Lease terms | 5 years |
Debt (Details)
Debt (Details) | Jun. 30, 2019USD ($) |
Principal Maturities during the year ending December 31, | |
Remainder of 2019 | $ 2,334,037 |
Building Loan [Member] | |
Principal Maturities during the year ending December 31, | |
Remainder of 2019 | 2,199,297 |
Equipment Loan [Member] | |
Principal Maturities during the year ending December 31, | |
Remainder of 2019 | $ 134,740 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2004 | Dec. 31, 2018 | Apr. 30, 2016 | Mar. 28, 2016 | |
Debt Instrument [Line Items] | ||||||||
Interest expense | $ 22,954 | $ 51,435 | $ 46,962 | $ 102,103 | ||||
Bear State Bank Line of Credit [Member] | Loan And Security Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 2,000,000 | $ 2,000,000 | ||||||
Warrant shares | 1,000,000 | |||||||
Certificate of deposit released | 1,000,000 | 1,000,000 | ||||||
Bank loan - line of credit | 0 | 0 | $ 0 | |||||
Interest expense | $ 0 | $ 24,000 | $ 0 | $ 47,000 | ||||
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 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Apr. 30, 2016 | Mar. 28, 2016 |
Loan And Security Agreement [Member] | Bear State Bank Line of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 2,000,000 | $ 2,000,000 | ||||||
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 | $ 2,199,000 | $ 2,199,000 | $ 2,249,000 | |||||
Effective interest rate | 3.75% | 3.75% | ||||||
Interest expense | $ 21,000 | $ 22,000 | $ 42,000 | $ 44,000 | ||||
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% | ||||||
Maximum borrowing capacity | $ 700,000 | $ 700,000 | ||||||
Equipment Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Periodic payment | 33,940 | |||||||
Debt amount | $ 1,152,890 | 135,000 | 135,000 | $ 334,000 | ||||
Interest rate | 3.75% | |||||||
Interest expense | $ 2,000 | $ 6,000 | $ 5,000 | $ 12,000 |
Stock Option Plans, Shares Re_2
Stock Option Plans, Shares Reserved and Warrants (Details) - 2009 Equity Incentive Plan [Member] - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2019 |
Number of options | |||
Outstanding Options, beginning | 9,298,101 | ||
Options Granted | 90,000 | ||
Options Cancelled/Expired | (1,042,043) | ||
Outstanding Options, ending | 8,346,058 | 9,298,101 | 8,346,058 |
Exercisable Options | 6,551,706 | 6,130,337 | 6,551,706 |
Weighted average exercise price | |||
Outstanding options, beginning | $ 4.40 | ||
Options Granted | 3.09 | ||
Options Canceled/Expired | 4.34 | ||
Outstanding Options, ending | $ 4.38 | $ 4.40 | 4.38 |
Exercisable Options | $ 4.72 | $ 4.72 | |
Weighted average remaining contractual life | |||
Outstanding Options | 6 years 10 months 21 days | 7 years 11 months 1 day | |
Options Granted | 9 years 7 months 2 days | ||
Exercisable Options | 6 years 5 months 15 days |
Stock Option Plans, Shares Re_3
Stock Option Plans, Shares Reserved and Warrants (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Old Adamis Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrant shares | 58,824 | 58,824 |
Warrant exercise price (in dollars per share) | $ 8.50 | $ 8.50 |
Date Issued | Nov. 15, 2007 | Nov. 15, 2007 |
Expiration Date | Nov. 15, 2019 | Nov. 15, 2019 |
Preferred Stock Series A-1 Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrant shares | 1,183,432 | 1,183,432 |
Warrant exercise price (in dollars per share) | $ 4.10 | $ 4.10 |
Date Issued | Jan. 26, 2016 | Jan. 26, 2016 |
Expiration Date | Jan. 26, 2021 | Jan. 26, 2021 |
Preferred Stock Series A-2 Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrant shares | 192,414 | 192,414 |
Warrant exercise price (in dollars per share) | $ 2.90 | $ 2.90 |
Date Issued | Jul. 11, 2016 | Jul. 11, 2016 |
Expiration Date | Jul. 11, 2021 | Jul. 11, 2021 |
2016 Common Stock, Private Placement [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrant shares | 700,000 | 700,000 |
Warrant exercise price (in dollars per share) | $ 2.98 | $ 2.98 |
Date Issued | Aug. 3, 2016 | Aug. 3, 2016 |
Expiration Date | Aug. 3, 2021 | Aug. 3, 2021 |
Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrant shares | 2,134,670 | 2,138,887 |
Underwriter Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrant shares | 4,217 | |
Warrant exercise price (in dollars per share) | $ 7.44 | |
Date Issued | Jan. 16, 2014 | |
Expiration Date | Jan. 16, 2019 |
Stock Option Plans, Shares Re_4
Stock Option Plans, Shares Reserved and Warrants (Details 2) - RSU [Member] - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | ||
Total RSUs | 3,681,796 | 1,642,212 | |
Board of Directors [Member] | |||
Total RSUs | [1] | 350,000 | 350,000 |
Price at grant date (in dollars per share) | $ 8.46 | $ 8.46 | |
Date of grant | May 25, 2016 | May 25, 2016 | |
Company Executives #1 [Member] | |||
Total RSUs | [1] | 950,000 | 950,000 |
Price at grant date (in dollars per share) | $ 3.50 | $ 3.50 | |
Date of grant | Mar. 1, 2017 | Mar. 1, 2017 | |
Company Executives #2 [Member] | |||
Total RSUs | [2] | 228,141 | 342,212 |
Price at grant date (in dollars per share) | $ 2.83 | $ 2.83 | |
Date of grant | Feb. 21, 2018 | Feb. 21, 2018 | |
Company Executives And Employees [Member] | |||
Total RSUs | [3] | 2,153,655 | |
Price at grant date (in dollars per share) | $ 3.09 | ||
Date of grant | Jan. 30, 2019 | ||
[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. | ||
[3] | The RSUs vest ratably quarterly 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_5
Stock Option Plans, Shares Reserved and Warrants (Details 3) | Jun. 30, 2019shares |
Reserved shares of common stock for issuance upon exercise | 14,162,524 |
2009 Equity Incentive Plan [Member] | |
Reserved shares of common stock for issuance upon exercise | 8,346,058 |
RSU [Member] | |
Reserved shares of common stock for issuance upon exercise | 3,681,796 |
Warrants [Member] | |
Reserved shares of common stock for issuance upon exercise | 2,134,670 |
Stock Option Plans, Shares Re_6
Stock Option Plans, Shares Reserved and Warrants (Details Narrative) - USD ($) | Jan. 30, 2019 | Jan. 02, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Compensation expenses | $ 3,743,248 | $ 3,172,078 | |||||
2009 Equity Incentive Plan [Member] | |||||||
Increase in shares reserved for stock awards | 2,364,568 | ||||||
Options granted | 90,000 | ||||||
Exercise price of options granted (in dollars per share) | $ 3.09 | ||||||
Stock options outstanding | 8,346,058 | 8,346,058 | 9,298,101 | ||||
Intrinsic value of stock options outstanding | $ 0 | $ 0 | $ 0 | ||||
Stock options exercisable | 6,551,706 | 6,551,706 | 6,130,337 | ||||
Intrinsic value of stock options exercisable | $ 0 | $ 0 | $ 0 | ||||
2009 Equity Incentive Plan [Member] | Non-employee Directors [Member] | |||||||
Options granted | 90,000 | ||||||
Exercise price of options granted (in dollars per share) | $ 3.09 | ||||||
Vesting period | 1 year | ||||||
Expected volatility | 56.00% | ||||||
Term | 6 years | ||||||
Dividend rate | 0.00% | ||||||
Risk-free interest rate | 2.60% | ||||||
Fair value | $ 152,000 | ||||||
2009 Equity Incentive Plan [Member] | RSU [Member] | |||||||
Compensation expenses | $ 882,000 | $ 305,000 | $ 1,684,000 | $ 563,000 | |||
2009 Equity Incentive Plan [Member] | RSU [Member] | Company Executives And Employees [Member] | |||||||
Vesting period | 3 years | ||||||
Fair value | $ 7,259,000 | ||||||
Restricted Stock Units granted | 2,349,350 | ||||||
Market price of common stock | $ 3.09 | ||||||
2009 Equity Incentive Plan [Member] | RSU [Member] | Employee [Member] | |||||||
Fair value | $ 114,000 | ||||||
Restricted Stock Units granted | 36,985 | ||||||
Market price of common stock | $ 3.09 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Aug. 05, 2019USD ($)$ / sharesshares |
Number of shares issued | 13,800,000 |
Number of warrants to purchase common stock issued | 13,800,000 |
Excercise price of warrants | $ / shares | $ 1.15 |
Warrants exercisable period | 5 years |
Sale price per unit | $ / shares | $ 1 |
Proceeds from stock issuance | $ | $ 12,700,000 |
Over-Allotment Option [Member] | |
Number of shares issued | 1,800,000 |
Number of warrants to purchase common stock issued | 1,800,000 |