On March 16, 2023 Adamis Pharmaceuticals Corporation (NASDAQ: ADMP), a biopharmaceutical company focused on developing and commercializing products in various therapeutic areas, including opioid overdose, allergy, respiratory and inflammatory disease, reported financial results for the full year ended December 31, 2022, and provided an update on recent corporate developments (Press release, Adamis Pharmaceuticals, MAR 16, 2023, View Source [SID1234628951]).

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General Corporate Highlights

Merger Agreement with DMK Pharmaceuticals

In October 2022, Adamis announced that it had initiated a process to explore a range of strategic and financing alternatives and had retained an investment bank to assist in evaluating certain alternatives focused on maximizing stockholder value. Potential alternatives to be considered included a sale, partnership, distribution or other agreement regarding one or both of the Company’s commercial products, a merger or sale of the company, and/or seeking additional financing.
On February 27, 2023, the Company announced that it had entered into an Agreement and Plan of Merger and Reorganization with DMK Pharmaceuticals, a private, clinical-stage biotechnology company at the forefront of endorphin-inspired drug design focused on developing novel treatments for opioid use disorder and other neuro-based diseases.
Under terms of the merger agreement, Adamis will acquire DMK, including its library of approximately 750 small molecule neuropeptide analogues and ongoing government funding for its development programs.
At the close of the merger, Eboo Versi, M.D., Ph.D., the current CEO of DMK, will assume the role of CEO and chairman of the combined company.
Nasdaq Continued Listing

On February 23, 2023, Adamis announced that Nasdaq had granted its request to extend the period for the Company to regain compliance with the $1 minimum bid share price requirement, subject to the Company evidencing compliance with all applicable criteria for continued listing, by no later than a final extension date of June 26, 2023. The Company’s continued listing is subject to the timely satisfaction of certain interim milestones and undertaking of certain corporate actions during the compliance period, including without limitation: (1) the Company executing the merger agreement with DMK; (2) effecting a reverse stock split of the common stock; and (3) achieving the minimum closing bid price of at least $1.00 per share for a minimum of ten consecutive business days prior to the expiration of the compliance period.

Financing

On March 14, 2023, Adamis announced it had entered into a securities purchase agreement with a single, healthcare-focused institutional investor for the purchase and sale of 16,500,000 shares of its common stock and pre-funded warrants to purchase up to 7,500,000 shares of common stock, together with warrants to purchase up to 48,000,000 shares of common stock, at a combined purchase price of $0.125 per share (and $0.1249 per pre-funded warrant) and accompanying warrants, pursuant to a registered direct offering.

The warrants have an exercise price of $0.138 per share, will be initially exercisable beginning six months following the date of issuance and will expire five years and six months from the date of issuance, and the warrants are not exercisable for six months, and are subject to other limitations on the ability to exercise.

The closing of the offering occurred on March 16, 2023, and the gross proceeds from the offering are approximately $3.0 million, before deducting fees and other estimated offering expenses. The Company intends to use the net proceeds from the offering for general working capital purposes.

The offering was made pursuant to an effective shelf registration statement on Form S-3 (File No 333-267365) previously filed with the U.S. Securities and Exchange Commission (the "SEC"). A prospectus supplement describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC’s website located at View Source
Full Year 2022 Financial Highlights

Total net revenue for the twelve months ending December 31, 2022, was approximately $4.8 million compared to approximately $2.2 million for the full year 2021. The increase in revenues was primarily due to product sales of ZIMHI to US WorldMeds, less an offset of approximately $310,000 in costs for the completion of the SYMJEPI recall.

Selling, general and administrative expenses for the twelve months ending December 31, 2022 and 2021 were approximately $13.2 million and $16.1 million, respectively. The decrease was primarily a result of reductions in legal and compensation expenses which included the elimination of the bonus accrual and lower stock-based compensation expenses.
Research and development expenses were lower for 2022 at approximately $10.4 million compared to $11.3 million in 2021. The decrease was also primarily related to the elimination of the bonus accrual and lower stock-based compensation expense.
Net loss for the combined (continued and discontinued) operations for the years ended December 31, 2022 and 2021 was approximately $26.5 million and $45.8 million, respectively. This decreased loss was primarily attributable to the cessation of US Compounding’s operations and the aforementioned reductions in legal and compensation expenses.
Cash and cash equivalents at December 31, 2022, totaled $1.1 million. Additional cash infusions during the first quarter of 2023 included proceeds of approximately $832,000 from the sale of certain equipment related to the discontinued US Compounding operations, proceeds of $875,000 from Employee Retention Credit ("ERC") program of the government and $3.0 million gross proceeds from the sale of equity.
Conference Call Information

Management will host a live webcast/conference call today, March 16, 2023, at 2:00 p.m. PT / 5:00 p.m. ET, during which Company executives will review financial information for the full year ending December 31, 2022 and provide a corporate update.

U.S. Dial-in (Toll Free): 1-877-423-9813
Toll/International Dial-in: 1-201-689-8573

A live audio webcast of the conference call will also be available via this link. If you are unable to participate in the live call, a replay will be available shortly after the live event. To listen to the replay please visit the events page of the Adamis investor relations section of the company website at the following link.