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Item
1.01
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Entry
into a Material Definitive Agreement
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On
June 12, 2020, Adamis Pharmaceuticals Corporation (the “Company” or “Adamis”) entered into a license agreement
(the “Agreement”) with Matrix Biomed, Inc. (“Matrix” or the “Licensor”) to license rights
under patents, patent applications and related know-how of Matrix relating to Tempol, an investigational drug. The exclusive license
includes the worldwide use under the licensed patent rights and related rights of Tempol for the fields of COVID-19 infection,
asthma, respiratory syncytial virus infection, and influenza infection. In addition, the exclusive license includes the use of
Tempol as a therapeutic for reducing radiation-induced dermatitis in patients undergoing treatment for cancer. In consideration
for Matrix providing the rights under its patent rights and related know-how relating to Tempol within the licensed fields, Adamis
paid Matrix $250,000 and also issued to Matrix 1,000,000 shares of Adamis Series B Convertible Preferred Stock (“Series
B Preferred”).
Under
the Agreement, the Company will be responsible for funding preclinical and clinical development relating to products developed
for the licensed fields of use, and for matters relating to compliance of any licensed products or development and testing of
licensed products with laws and regulations. Licensor will provide, and the Company will purchase from Licensor, Tempol material
for preclinical or clinical work or use in licensed products, and Licensor will provide the Company with other information and
materials relating to testing and development of products within the licensed fields of use. The Agreement provides for the creation
of a joint steering committee with members from the Company and Licensor to meet periodically and discuss issues relating to the
development, testing and approval of products within the licensed fields of use.
Under
the Agreement, if any products are commercialized, profits (as defined in the Agreement) from sales of licensed products will
be shared equally between the parties. Profits are generally determined as net sales of licensed products less costs incurred
by the Company for manufacturing, marketing and distribution of licensed products.
The
Agreement contains other covenants of the Company and Licensor relating to, among other matters, funding of testing and development
of licensed products, confidentiality, compliance with laws, and other matters. The Agreement includes customary provisions regarding
prosecution, maintenance, infringement and enforcement of the licensed patents, books and records, indemnification and other matters.
The Company may not sublicense its rights under the Agreement without the consent of Licensor, and neither party may assign its
rights under the Agreement without the consent of the other party. The term of the Agreement continues until the expiration of
the last to expire of the patents licensed under the Agreement and will terminate or may be terminated earlier upon the occurrence
of certain other events including an uncured breach of the Agreement or failure to satisfy certain covenants. The Company may
also terminate the Agreement with advance written notice to Licensor.
The
Series B Preferred was established pursuant to a Certificate of Designation of Preferences, Rights and Limitations filed with
the Delaware Secretary of State. Each share of Series B Preferred will automatically convert into one share of Common Stock after
the occurrence of a Capital Event as defined in the Certificate of Designation. “Capital Event” is defined as the
filing and effectiveness of an amendment to the Company’s certificate of incorporation (or similar charter documents) to
either (i) increase the number of shares of Common Stock the Company is authorized to issue or (ii) effect a reverse split of
the Common Stock, in either event sufficient to permit the issuance of shares of Common Stock upon conversion of all outstanding
shares of Series B Preferred Stock. The conversion rate of the Series B Preferred is subject to proportionate adjustments for
stock splits, reverse stock splits and similar events, but is not subject to adjustment based on price anti-dilution provisions
or other events.
The
foregoing description of certain terms of the Agreement does not purport to be complete and is qualified in its entirety by reference
to the Agreement that the Company intends to file as an exhibit to its Quarterly Report on Form 10-Q for the period ended June
30, 2020, or other report that the Company may file with the Securities and Exchange Commission (the “SEC”).