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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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82-0429727
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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x
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Page
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PART I
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements:
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3
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4
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5
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7
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Item 2.
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11
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Item 3.
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18
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Item 4.
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18
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PART II
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OTHER INFORMATION
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Item 1.
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18
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It
em 1A.
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19
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Item 2.
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19
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Item 3.
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19
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Item 4.
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19
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Item 5.
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19
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Item 6.
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20
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Signatures
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ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
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||||||||||||||||
CONSOLIDATED
STATEMENTS OF
OPERATIONS
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||||||||||||||||
Three Months Ended
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Nine Months Ended
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|||||||||||||||
December 31, 2011
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December 31, 2010
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December 31, 2011
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December 31, 2010
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|||||||||||||
(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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|||||||||||||
REVENUE
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$ | — | $ | — | $ | — | $ | — | ||||||||
COST OF GOODS SOLD
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— | — | — | — | ||||||||||||
Gross Margin
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— | — | — | — | ||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
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807,161 | 928,668 | 2,295,976 | 3,012,993 | ||||||||||||
RESEARCH AND DEVELOPMENT
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181,500 | 2,092,524 | 1,385,969 | 2,109,820 | ||||||||||||
Loss from Operations
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(988,661 | ) | (3,021,192 | ) | (3,681,945 | ) | (5,122,813 | ) | ||||||||
OTHER INCOME (EXPENSE)
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||||||||||||||||
Interest Expense | (2,613 | ) | (72,148 | ) | (32,672 | ) | (712,760 | ) | ||||||||
Gain on Sale of Asset | — | — | 5,297 | 5,600 | ||||||||||||
Net (Loss)
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$ | (991,274 | ) | $ | (3,093,340 | ) | $ | (3,709,320 | ) | $ | (5,829,973 | ) | ||||
Basic and Diluted (Loss) Per Share:
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||||||||||||||||
Basic and Diluted (Loss) Per Share
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$ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.09 | ) | ||||
Basic and Diluted Weighted Average Shares Outstanding
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91,885,620 | 70,005,275 | 87,830,451 | 67,252,621 |
ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
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||||||||
CONSOLIDATED
STATEMENTS OF
CASH FLOWS
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||||||||
Nine Months Ended December 31,
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||||||||
2011
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2010
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|||||||
(Unaudited)
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(Unaudited)
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|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
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Net Loss
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$ | (3,709,320 | ) | $ | (5,829,973 | ) | ||
Adjustments to Reconcile Net Loss to Net
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||||||||
Cash (Used in) Operating Activities:
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Depreciation Expense
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— | 13,682 | ||||||
Stock Issued for Interest
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621 | 777 | ||||||
Stock Issued for Research & Development Services
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— | 1,215,000 | ||||||
Reduction of Compensation Upon Forgiveness of Accrued Bonus
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— | (129,977 | ) | |||||
Consulting Expense Paid in Common Stock
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— | 597,500 | ||||||
Stock-Based Compensation Expense
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134,558 | 100,214 | ||||||
Amortization of Discounts
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— | 527,369 | ||||||
Inventory Reserve Adjustment
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— | (222,878 | ) | |||||
Amortization of Stock Issued for Services
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293,876 | 311,904 | ||||||
Sales Returns Reserve Adjustment
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(58,149 | ) | 307,660 | |||||
Write-down of Discontinued Operations Receivable
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70,000 | — | ||||||
Change in Assets and Liabilities:
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(Increase) Decrease in:
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Accounts Receivable
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— | 5,555 | ||||||
Inventory
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— | 225,587 | ||||||
Prepaid Expenses and Other Current Assets
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(35,320 | ) | 2,394 | |||||
Increase (Decrease) in:
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Accounts Payable
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462,836 | (306,358 | ) | |||||
Accrued Other Expenses
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141,402 | 123,301 | ||||||
Net Cash (Used in) Operating Activities
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(2,699,496 | ) | (3,058,243 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES
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Net Cash Provided by Investing Activities from Discontinued Operations
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— | 150,000 | ||||||
Net Cash Provided by Investing Activities
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— | 150,000 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
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Cash Received from Sale of Common Stock
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1,800,000 | 5,395,000 | ||||||
Cash Received from Related Parties Notes Payable
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7,200 | — | ||||||
Payment of Notes Payable
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(345,000 | ) | — | |||||
Payment of Notes Payable to Related Parties
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— | (208,333 | ) | |||||
Purchase of Treasury Stock
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— | (4,127 | ) | |||||
Net Cash Provided by Financing Activities
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1,462,200 | 5,182,540 | ||||||
(1,237,296 | ) | 2,274,297 | ||||||
Cash:
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Beginning
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1,238,898 | 290,299 | ||||||
Ending
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$ | 1,602 | $ | 2,564,596 |
ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATE
MENT
S OF CASH FLOWS
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Nine Months Ended December 31,
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2011
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2010
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(Unaudited)
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(Unaudited)
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
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Cash Paid for Interest
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$ | 33,859 | $ | 130,526 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND
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INVESTING ACTIVITIES
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Warrants Issued for Prepaid Services
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$ | 21,000 | $ | - | ||||
Common Stock issued for Prepaid Services
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$ | 60,000 | $ | |||||
Notes Payable Converted to Common Stock
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$ | 818,000 | $ | 837,000 | ||||
Common Stock issued for Interest
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$ | 621 | $ | 777 | ||||
Stock Based Compensation Expense
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$ | 134,558 | $ | 100,214 | ||||
Accrued Bonuses Converted to Paid-in Capital
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$ | - | $ | 1,068,786 | ||||
Stock Issued for Consulting Services
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$ | - | $ | 1,265,000 | ||||
Stock Issued for Research & Development Services
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$ | - | $ | 1,215,000 |
Number of
Stock Options
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Weighted
Average
Remaining
Contractual Life
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Weighted
Average
Exercise
Price
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Number of
Stock Options
Vested
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Non-Plan Stock Options
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100,714
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1.85 Years
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$
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41.27
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100,714
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2009 Equity Incentive Plan
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5,230,398
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8.94 Years
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$
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0.24
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2,805,377
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Warrant Shares
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Exercise Price
Per Share
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Date Issued
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Expiration Date
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Biosyn Warrants
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8,245
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$ |
57.97 - $173.92
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October 22, 2004
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2013 - 2014
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Old Adamis Warrants
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1,000,000
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$ |
0.50
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November 15, 2007
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November 15, 2012
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Consultant Warrants
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300,000
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$ |
0.25
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August 26, 2009
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August 26, 2014
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Consultant Warrants
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270,000
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$ |
0.20
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January 29, 2010
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January 29, 2015
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Consultant Warrants
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200,000
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$ |
0.29
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October 26, 2009
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October 26, 2014
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Various Investors
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395,000
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$ |
0.30
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June 14, 2010 -
September 15, 2010
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June 14, 2015 -
September 15, 2015
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Consultant Warrants
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300,000
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$ |
0.22
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July 11, 2011
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July 11, 2016
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Total Warrants
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2,473,245
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Warrants
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2,473,245
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Non-Plan Stock Options
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100,714
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2009 Equity Incentive Plan
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13,406,915
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Total Shares Reserved
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15,980,874
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(1)
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Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Report on Form 8-K, filed with the Securities and Exchange Commission on February 6, 2012.
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ADAMIS PHARMACEUTICALS, INC.
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Date: February 14, 2012
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By:
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/s/ Dennis J. Carlo
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Dennis J. Carlo
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Chief Executive Officer
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Date: February 14, 2012
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By:
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/s/ Robert O. Hopkins
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Robert O. Hopkins
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Vice President, Finance and Chief Financial Officer
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ADAMIS PHARMACEUTICALS CORPORATION
By:/s/ Dennis J. Carlo
Name: Dennis J. Carlo
Its: CEO
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ESES HOLDINGS (FZE)
By:/s/ Ahmed Shayan Fazlur Rahman
Name: Ahmed Shayan Fazlur Rahman
Its: Owner and Manager
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1.
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I have reviewed this quarterly report on Form 10- Q of Adamis Pharmaceuticals Corporation;
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2.
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Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and (15d-15(e)) for the registrant and we have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; and
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting disclosure to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 14, 2011
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By:
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/s/ Dennis J. Carlo
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Dennis J. Carlo
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Adamis Pharmaceuticals Corporation;
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2.
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Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and (15d-15(e)) for the registrant and we have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; and
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting disclosure to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 14, 2011
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By:
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/s/ Robert O. Hopkins
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Robert O. Hopkins
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Vice President, Finance and Chief Financial Officer
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(1)
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the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 14, 2011
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By:
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/s/ Dennis J. Carlo
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Dennis J. Carlo
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Chief Executive Officer
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(1)
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the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 14, 2011
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By:
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/s/ Robert O. Hopkins
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Robert O. Hopkins
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Vice President, Finance and Chief Financial Officer
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