UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A
Amendment No. 1

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): April 1, 2009

	ADAMIS PHARMACEUTICALS CORPORATION
(Exact Name of Registrant as Specified in Charter)

Delaware	0-26372	82-0429727
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2658 Del Mar Heights Rd., #555 Del Mar, CA 92014
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 401-3984

(Former name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

               On April 3, 2009, Cellegy Pharmaceuticals, Inc. (“Cellegy”) filed a Report on Form 8-K reporting the completion of an Agreement and Plan of Reorganization with Adamis Pharmaceuticals Corporation (“Adamis”) and Cellegy Holdings, Inc., a wholly-owned subsidiary of Cellegy, providing for the acquisition of Cellegy by Adamis. The purpose of this Amendment No. 1 is to provide the financial statements required pursuant to Item 9.01 of this Form.

Item 9.01. Financial Statements and Exhibits.

          (a) Financial Statements of Business Acquired

          Adamis Pharmaceuticals Corporation and Subsidiaries Unaudited Consolidated Financial Statements for Three and Nine Months Ended December 31, 2008 and 2007.

          (b) Pro Forma Financial Information

          Unaudited Proforma Combined Condensed Consolidated Balance Sheet. Unaudited Proforma Combined Condensed Consolidated Statement of Operations.

ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
THREE AND NINE MONTHS ENDED DECEMBER 31, 2008 AND 2007

	PAGE
FINANCIAL STATEMENTS (UNAUDITED):
Consolidated Balance Sheet	1
Consolidated Statements of Operations	2
Consolidated Statements of Cash Flows	3-4
Notes to the Consolidated Financial Statements	5-27

ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	December 31, 2008			March 31, 2008
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	939		$	541
Accounts Receivable, Net		108,791			76,270
Inventory, Net		520,489			24,263
Prepaid Expenses and Other Current Assets		18,399			144,221
Assets from Discontinued Operations		350,000			9,626,425
Total Current Assets		998,618			9,871,720
PROPERTY AND EQUIPMENT, Net		34,766			53,980
DEFERRED ACQUISITION COSTS		147,747			101,247
OTHER ASSETS		21,871			21,871
Total Assets	$	1,203,002		$	10,048,818
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts Payable	$	845,461		$	991,144
Accrued Expenses		266,133			379,982
Liabilities from Discontinued Operations		—			6,246,161
Notes Payable to Related Parties		528,000			1,744,000
Total Current Liabilities		1,639,594			9,361,287
NOTE PAYABLE TO RELATED PARTY, Less Current Maturity		—			500,000
LONG-TERM DEBT, Net of Financing Cost		—			1,680,000
Total Liabilities		1,639,594			11,541,287
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT
Preferred Stock – Par Value $.0001; 20,000,000 Shares Authorized; Issued and Outstanding-None		—			—
Common Stock – Par Value $.0001; 100,000,000 Shares Authorized; 35,576,761 and 34,721,110 Issued and Outstanding, Respectively		3,589			3,471
Additional Paid-in Capital		9,587,107			8,788,485
Treasury Stock - 316,000 and 0 Shares, Respectively		(316	)		—
Accumulated Deficit		(10,026,972	)		(10,284,425	)
Total Stockholders’ Deficit		(436,592	)		(1,492,469	)
	$	1,203,002		$	10,048,818

The Accompanying Notes are an integral Part of these Consolidated Financial Statements.

1

ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Nine Months Ended
	December 31, 2008			December 31, 2007			December 31, 2008			December 31, 2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
REVENUE, NET	$	91,539		$	278,176		$	403,020		$	481,556
COST OF GOODS SOLD		42,790			56,859			224,238			202,631
Gross Margin		48,749			221,317			178,782			278,925
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		554,618			1,346,856			2,890,378			3,082,284
RESEARCH AND DEVELOPMENT		26,603			—			362,741			153,089
Loss from Operations		(532,472	)		(1,125,539	)		(3,074,337	)		(2,956,448	)
OTHER INCOME (EXPENSE)
Interest Income		—			48,409			—			68,141
Interest Expense		(28,672	)		(154,767	)		(420,378	)		(172,594	)
Other Income		—			—			—			21,050
Gain (Loss) on Sale of Asset		—			—			1,329			(20,688	)
Total Other Income (Expense)		(28,672	)		(106,358	)		(419,049	)		(104,091	)
Loss from Continuing Operations		(561,144	)		(1,231,897	)		(3,493,386	)		(3,060,539	)
Income (Loss) from Discontinued Operations		(150,000	)		—			3,750,839			—
Net Income (Loss)	$	(711,144	)	$	(1,231,897	)	$	257,453		$	(3,060,539	)
Basic and Diluted Income (Loss) Per Share:
Continuing Operations	$	(0.02	)	$	(0.06	)	$	(0.14	)	$	(0.19	)
Discontinued Operations		(0.01	)		—			0.15			—
Basic and Diluted Income (Loss) Per Share	$	(0.03	)	$	(0.06	)	$	0.01		$	(0.19	)
Basic and Diluted Weighted Average Shares Outstanding		25,242,798			19,295,557			24,707,514			16,065,794

The Accompanying Notes are an integral Part of these Consolidated Financial Statements.

2

ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	December 31, 2008			December 31, 2007
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) from Continuing Operations	$	(3,493,386	)	$	(3,060,539	)
Adjustments to Reconcile Net (Loss) from Continuing Operations to Net Cash (Used in) Operating Activities:
Depreciation Expense		15,543			15,685
Gain on Sale of Asset		(1,329	)		(20,668	)
Inventory Reserve Adjustment		(25,592	)		—
Loan Discount Accretion		328,000			24,000
Beneficial Conversion Feature Interest		(80,000	)		80,000
Interest Expense Converted to Equity		—			25,000
Sales Returns Reserve Adjustment		(1,963	)		—
Change in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable		(32,521	)		40,598
Interest Receivable		—			29,699
Inventory		(470,634	)		13,763
Prepaid Expenses and Other Current Assets		125,822			13,249
Other Assets		—			571
Increase (Decrease) in:
Accounts Payable		(145,683	)		195,728
Accrued Expenses		(111,886	)		127,991
Net Cash (Used in) Operating Activities from Continuing Operations		(3,893,629	)		(2,514,943	)
Net Cash (Used in) Operating Activities from Discontinued Operations		(812,603	)		—
Net Cash (Used in) Operating Activities		(4,706,232	)		(2,514,943	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Acquired in HealthCare Ventures Group, Inc. Acquisition		—			12,611
Cash Received from Sale of International Laboratories, Inc.		2,304,000			—
Deferred Acquisiton Costs		(46,500	)		—
International Laboratories, Inc. Obligation Repayments		4,322,082			—
Sale of Property and Equipment		5,000			19,188
Net Cash Provided by Investing Activities from Continuing Operations		6,584,582			31,799
Net Cash (Used in) Investing Activities from Discontinued Operations		(862,122	)		(3,393,913	)
Net Cash (Used in) Provided by Investing Activities		5,572,460			(3,362,114	)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in Subscriptions Receivable		—			126,000
Payments of Notes Payable to Related Parties		(1,752,000	)		(100,000	)
Proceeds from Issuance of Common Stock		878,740			3,295,500
Purchase of Treasury Stock		(316	)		—
Proceeds from Issuance of Loans Payable		—			1,000,000
Proceeds from Issuance of Notes Payable to Related Parties		—			410,000
Proceeds from Issuance of Notes Payable to Shareholders		28,000			1,242,000
Payments of Loans		(2,000,000	)		—
Net Cash (Used in) Provided by Financing Activities from Continuing Operations		(2,845,576	)		5,973,500
Net Cash Provided by Financing Activities from Discontinued Operations		1,829,746			—
Net Cash (Used in) Provided by Financing Activities		(1,015,830	)		5,973,500
Increase in Cash		398			96,443
Cash:
Beginning		541			36,763
Ending	$	939		$	133,206

The Accompanying Notes are an integral Part of these Consolidated Financial Statements.

3

ADAMIS PHARMACEUTICALS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	December 31, 2008		December 31, 2007
	(Unaudited)		(Unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid for Interest	$	228,407	$	21,949
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES
Stock Issued to Acquire HealthCare Ventures Group, Inc. (Note 2)	$	—	$	2,579,904
Stock Issued to Acquire International Laboratories, Inc. (Note 2)	$	—	$	1,000,000
Stock Issued as Loan Acquisition Cost (Note 8)	$	—	$	400,000
Stock Warrant Issued (Note 7)	$	—	$	80,000
Capital from Beneficial Conversion Feature (Note 7)	$	—	$	80,000
Stock Issued in Lieu of Interest (Note 11)	$	—	$	25,000
Forgiveness of Debt to International Laboratories, Inc. (Note 3)	$	570,618	$	—
Reduction of Capital from Unexcercised Beneficial Conversion Feature (Note 7)	$	80,000	$	—

The Accompanying Notes are an integral Part of these Consolidated Financial Statements.

4

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Adamis Pharmaceuticals Corporation and Subsidiaries is comprised of the following companies: Adamis Pharmaceuticals Corporation, Adamis Laboratories, Inc., and International Laboratories, Inc. (collectively “Adamis Pharmaceuticals”, the “Company”, “we”, “our”). The Company’s strategic objective is to build a publicly-held company that combines the financial stability and sales force of a specialty pharmaceutical company with the near-term development of biopharmaceutical products (Note 14).

Adamis Pharmaceuticals Corporation was established under the laws of the State of Delaware on June 6, 2006 and has devoted substantially all its efforts to establishing a new business. Adamis Viral Therapies, Inc. was established under the laws of the State of Delaware on March 23, 2007, and was merged into Adamis Pharmaceuticals Corporation, the surviving entity, on March 30, 2007. The merged company changed its name to Adamis Viral Therapies, Inc. (“Viral”) on March 30, 2007. Viral had no activity during the periods ended December 31, 2008 and 2007 (Note 14).

Adamis Holding Corporation was established under the laws of the State of Delaware on March 23, 2007. Adamis Holding Corporation changed its name to Adamis Pharmaceuticals Corporation on March 30, 2007. Viral transferred all of its authorized and outstanding shares of stock to Adamis Pharmaceuticals Corporation on March 30, 2007.

Adamis Laboratories, Inc. (formally known as HealthCare Ventures Group, Inc.) was established under the laws of the State of Delaware on September 2, 2005, and was acquired by the Company on April 23, 2007 (Note 2). On April 24, 2007, Healthcare Ventures Group, Inc. changed its name to Adamis Laboratories, Inc. (“Adamis Labs”). Adamis Labs is a distributor of respiratory products.

International Laboratories, Inc. (“INL”) was incorporated in the State of Florida in March 1981. INL’s operations consist of the packaging of prescription and non-prescription pharmaceutical and nutraceutical goods mainly for a major retailer (Notes 2 and 3).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying unaudited consolidated financial statements include Adamis Pharmaceuticals and its wholly-owned subsidiaries, Adamis Labs and INL. All significant intercompany balances and transactions have been eliminated in consolidation.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements. Actual results could differ from those estimates, and the differences could be material.

5

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Long-Lived Assets

The Company periodically assesses whether there has been permanent impairment of its long-lived assets held and used in accordance with Statement of Financial Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”). SFAS No. 144 requires the Company to review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of the asset to future net undiscounted cash flows expected to be generated from the use and eventual disposition of the asset.

Discontinued Operations

As discussed in Note 3, the results of operations for the three and nine months ended December 31, 2008, and the assets and liabilities at December 31, 2008 and March 31, 2008, related to INL have been accounted for as discontinued operations in accordance with SFAS No. 144. There were no operations or related assets and liabilities of INL in the accompanying unaudited consolidated financial statements of prior periods.

Cash and Cash Equivalents

For purposes of the unaudited consolidated statements of cash flows, the Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes (“SFAS No. 109”). SFAS No. 109 requires an asset and liability approach for financial accounting and reporting for income taxes. Under the asset and liability approach, deferred taxes are provided for the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are established where management determines that it is more likely than not that some portion or all of a deferred tax asset will not be realized.

On April 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty on Income Taxes, and Interpretation of SFAS No. 109, Accounting for Income Taxes, which clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet and the measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return, and did not have a material impact on the Company’s liability for unrecognized tax benefits.

6

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Our primary customers are pharmaceutical wholesalers. In accordance with our revenue recognition policy, revenue is recognized when title and risk of loss are transferred to the customer, the sale price to the customer is fixed and determinable, and collectability of the sale price is reasonably assured. Reported revenue is net of estimated customer returns and other wholesaler fees. Our policy regarding sales to customers is that we do not recognize revenue from, or the cost of, such sales, where we believe the customer has more than a demonstrably reasonable level of inventory. We make this assessment based on historical demand, historical customer ordering patterns for purchases, business considerations for customer purchases and estimated inventory levels. If our actual experience proves to be different than our assumptions, we would then adjust such allowances accordingly.

We estimate allowances for revenue dilution items using a combination of information received from third parties, including market data, inventory reports from our major U.S. wholesaler customers, when available, historical information and analysis that we perform. The key assumptions used to arrive at our best estimate of revenue dilution reserves are estimated customer inventory levels and purchase forecasts provided. Our estimates of inventory at wholesaler customers and in the distribution channels are subject to the inherent limitations of estimates that rely on third-party data, as certain third-party information may itself rely on estimates, and reflect other limitations. We believe that such provisions are reasonably ascertainable due to the limited number of assumptions involved and the consistency of historical experience.

Fair Value of Financial Instruments

Effective April 1, 2008, the Company adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS No. 157”). In February 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157, which provides a one-year deferral of the effective date of SFAS No. 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. Accordingly, the Company adopted the provisions of SFAS No. 157 with respect to only its financial assets and financial liabilities. The adoption of SFAS No. 157 did not impact the Company’s results of operations, but rather, provided the Company with a framework for measuring fair value and enhanced the Company’s disclosures about fair value measurements.

Under SFAS No. 157, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

7

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments (Continued)

The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities and debt approximated fair value due to the short maturity of the instruments. Therefore, the adoption of SFAS No. 157 did not have a material impact on its financial position, results of operations and cash flows for the three and nine months ended December 31, 2008.

Inventory

Inventory, consisting of allergy products, respiratory products, and pre-launch epi inventory is recorded at the lower of cost or market, using the weighted average method.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. The costs of leasehold improvements, if any, are amortized over the lesser of the lease term or the life of the improvement, if shorter.

Estimated useful lives used to depreciate property and equipment are as follows:

	Estimated Useful Lives In Years
Office Furniture and Equipment	7
Computer Equipment and Software	3
Vehicles	3

Deferred Acquisition Costs

The Company incurred certain professional fees associated with specific potential acquisition targets. These costs, should the acquisition occur, will be capitalized as part of the purchase price paid for the acquisition. Should the acquisition not occur, the Company will expense these costs upon such determination (Note 14).

Accounts Receivable, Allowance for Doubtful Accounts and Sales Returns

Trade accounts receivable are stated net of an allowance for doubtful accounts. The Company estimates an allowance based on its historical experience of the relationship between actual bad debts and net credit sales. At December 31, 2008 and March 31, 2008, no allowance for doubtful accounts was recorded.

The Company has established an allowance for sales returns based on management’s best estimate of probable loss inherent in the accounts receivable balance. Management determines the allowance based on current credit conditions, historical experience, and other currently available information. The allowance for sales returns was $19,059 and $21,022 at December 31, 2008 and March 31, 2008, respectively, and is included in accrued expenses on the consolidated balance sheet.

8

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Registration Payment Arrangements

The Company accounts for registration payment arrangements under FASB Staff Position EITF 00-19-2, Accounting for Registration Payment Arrangements (“FSP EITF 00-19-2”). FSP EITF 00-19-2 specifies that the contingent obligation to make future payments under a registration payment arrangement should be separately recognized and measured in accordance with SFAS No. 5, Accounting for Contingencies. FSP EITF 00-19-2 was issued in December 2006. Early adoption of FSP EITF 00-19-2 is permitted and the Company adopted FSP EITF 00-19-2 effective January 3, 2007. At December 31, 2008 and March 31, 2008 the Company has no accrued estimated penalty. (Notes 7 and 10)

Research and Development

The Company accounts for research and development costs in accordance with SFAS No. 2, Accounting for Research and Development Costs (“SFAS No. 2”) and Emerging Issues Task Force (“EITF”) Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities (“EITF Issue No. 07-3”). Under SFAS No. 2, research and development costs are expensed as incurred. EITF Issue No. 07-3 requires non-refundable advance payments for goods and services to be used in future research and development activities to be recorded as an asset and expensing the payments when the research and development activities are performed.

Research and development costs, which primarily consist of salaries, contractor fees, facility and building costs, utilities, administrative expenses and other corporate costs, expensed in accordance with such pronouncements were $26,603 and $0 for the three months ended December 31, 2008 and 2007, respectively, and $362,741 and $153,089 for the nine months ended December 31, 2008 and 2007, respectively. Expenses related to outside contractors for development of the Epinephrine Syringe (“epi”) during the three months ended December 31, 2008 and 2007 were $5,280 and $0, respectively, and were $55,707 and $150,000 for the nine months ended December 31, 2008 and 2007, respectively. Non-refundable advanced payments used and expensed during the three and nine months ended December 31, 2008 were $0 and $143,207, respectively, and were $0 for both the three and nine months ended December 31, 2007. Non-refundable advanced payments for products to be used in the development of EPI were $0 and $39,769 at December 31, 2008 and March 31, 2008, respectively.

Expenses related to outside contractors for the development of influenza technology were $21,323 and $0 for the three months ended December 31, 2008 and 2007, respectively, and were $163,827 and $3,089 for the nine months ended December 31, 2007, respectively.

Shipping and Handling

Shipping and handling costs are included in selling, general and administrative expenses. Shipping and handling costs were $1,906 and $15,795 for the three months ended December 31, 2008 and 2007, respectively, and $8,553 and $29,816 for the nine months ended December 31, 2008 and 2007, respectively.

9

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Advertising Expenses

Advertising costs are expensed as incurred as set forth in Statement of Position (“SOP”) No. 93- 7, Reporting on Advertising Costs. Advertising expenses were $0 during each of the three months ended December 31, 2008 and 2007, and $2,848 and $0 during the nine months ended December 31, 2008 and 2007, respectively.

Net Loss Per Share

The Company computes net loss per share in accordance with SFAS No. 128, Earnings per Share, under the provisions of which basic loss per share is computed 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. Since the effect of common stock equivalents was anti-dilutive, all such equivalents were excluded from the calculation of weighted average shares outstanding. Outstanding warrants at December 31, 2008 and March 31, 2008 were 1,000,000, and there were no other common stock equivalents outstanding.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”), which establishes the principles and requirements for how an acquirer: (1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; (3) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination; and (4) requires acquisition costs incurred prior to acquisition to be expensed rather than deferred. SFAS No. 141(R) replaces SFAS No. 141, Business Combinations. SFAS No. 141(R) is effective in fiscal years beginning after December 15, 2008. The Company has noted that under the provisions of SFAS No. 141(R), $147,747 and $101,247 capitalized as deferred acquisition costs at December 31, 2008 and March 31, 2008, respectively, would be expensed.

In February 2008, the FASB issued FSP SFAS No. 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Its Related Interpretive Accounting Pronouncements That Address Leasing Transactions (“FSP SFAS No. 157-1”) and FSP SFAS No. 157-2, Effective Date of FASB Statement No. 157 (“FSP SFAS No. 157-2”). FSP SFAS No. 157-1 removes leasing from the scope of SFAS No. 157. FSP SFAS No. 157-2 delays the effective date of SFAS No. 157 for the Company from its fiscal 2009 to 2010 year for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company does not expect that its adoption of the provisions of FSP SFAS No. 157-1 and FSP SFAS No. 157-2 will have a material effect on its financial condition, results of operations or cash flows.

10

NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements (Continued)

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, which establishes accounting and recording standards for the noncontrolling interest (minority interest) in a subsidiary and for the deconsolidation of a subsidiary to make them consistent with the requirements of SFAS No. 141(R). SFAS No. 160 is effective in fiscal years beginning after December 15, 2008. The Company does not expect that its adoption of the provisions of SFAS No. 160 will have a material effect on its financial condition, results of operations or cash flows.

In June 2007, the FASB ratified EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities. EITF Issue No. 07-3 requires non-refundable advance payments for goods and services to be used in future research and development activities to be recorded as an asset and expensing the payments when the research and development activities are performed. EITF Issue No. 07-3 applies prospectively for new contractual arrangements entered into in fiscal years beginning after December 15, 2007. The Company recognizes these non-refundable advanced payments as an asset upon payment, and expenses costs as goods are used and services are provided in accordance with EITF Issue No. 07-3.

NOTE 2: ACQUISITIONS

Acquisition of HealthCare Ventures Group, Inc.

On April 23, 2007, the Company acquired all of the outstanding shares of HealthCare Ventures Group, Inc. in exchange for 5,159,807 shares of common stock valued at $0.50 per share, or approximately $2.6 million (the “HVG Acquisition”). The purchase agreement provides for an additional 7,451,304 restricted shares held in escrow with issuance conditional upon future earnings targets, 719,019 of which were subsequently cancelled. The acquired company’s name was changed to Adamis Labs.

The HVG Acquisition was accounted for as a business combination using the purchase method of accounting under the provisions of SFAS No. 141. Accordingly, the results of Adamis Labs’s operations have been included in the unaudited consolidated financial statements from the date of acquisition. The allocation of consideration for acquisitions requires extensive use of accounting estimates and management’s judgment to allocate the purchase price of tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Management believes fair values assigned to the assets acquired and liabilities assumed are based on reasonable estimates and assumptions.

11

NOTE 2: ACQUISITIONS (CONTINUED)

Acquisition of HealthCare Ventures Group, Inc. (Continued)

The purchase price for the HVG Acquisition was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, with the excess being allocated to intangible assets, as follows:

Cash	$	12,611
Accounts Receivable		138,218
Inventory		37,373
Prepaid and Other Current Assets		71,915
Property		69,645
Other Assets		22,442
Intangible Assets		3,150,985
Accounts Payable		(148,657	)
Accrued Liabilities		(191,611	)
Interest Payable		(33,017	)
Loan Payable		(550,000	)
Net Assets Acquired	$	2,579,904

During the year ended March 31, 2008, the Company recorded an impairment charge related to the intangible asset (consisting primarily of a distribution network) associated with the transaction that the Company determined had no remaining value.

The following table represents summarized financial information of the results of operations included in the Consolidated Statements of Operations:

	Three Months Ended						Nine Months Ended
	2008			2007			2008			2007
Revenue, net	$	91,539		$	280,113		$	403,020		$	483,493
Operating Loss	$	(273,174	)	$	(379,917	)	$	(1,443,396	)	$	(1,664,275	)
Net Loss from Operations	$	(237,174	)	$	(400,605	)	$	(1,443,396	)	$	(1,663,913	)

Acquisition of International Laboratories, Inc.

On December 31, 2007, the Company acquired all of the outstanding shares of INL in an all stock transaction for 2,000,000 shares of common stock valued at $0.50 per share, or $1.0 million (the “INL Acquisition”). The purchase agreement provided for an additional 8,000,000 restricted shares to be held in escrow with issuance conditional upon future earnings targets (Note 3).

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NOTE 2: ACQUISITIONS (CONTINUED)

Acquisition of International Laboratories, Inc. (Continued)

The INL Acquisition was accounted for as a business combination using the purchase method of accounting under the provisions of SFAS No. 141. Accordingly, the results of International Laboratories, Inc.’s operations have been included in the unaudited consolidated financial statements beginning December 31, 2007. The allocation of consideration for acquisitions requires extensive use of accounting estimates and management judgment to allocate the purchase price of tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values. Management believes the fair values assigned to the assets acquired and liabilities assumed are based on reasonable estimates and assumptions.

The purchase price for the INL Acquisition was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, with the excess being allocated to intangible assets, as Management deems a significant customer agreement with a finite term as the value purchased. The customer agreement was with a major retailer, and without such agreement Adamis would not have acquired INL. The length of the agreement at the time of INL’s purchase was in excess of two and one-half years.

The purchase price was allocated as follows:

Cash and Cash Equivalents	$	219,321
Accounts Receivable		707,101
Prepaid Expenses and Other Current Assets		29,155
Inventory		305,723
Property		434,935
Intangible Asset Acquired		6,328,704
Accounts Payable		(1,757,312	)
Accrued Liabilities		(282,307	)
Deferred Revenue		(114,437	)
Current Portion of Long-Term Debt		(151,930	)
Long-Term Debt		(4,718,953	)
Net Assets Acquired	$	1,000,000

The customer agreement valued as the acquired intangible asset had a remaining term of 2.5 years at the acquisition date. Amortization of the intangible asset recorded during the three and nine months ended December 31, 2008 was $0 and $759,444, respectively.

On July 18, 2008, INL was sold. Accordingly, the assets, liabilities, and results from operations are classified as discontinued operations in the unaudited consolidated financial statements (Note 3).

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NOTE 3: DISCONTINUED OPERATIONS

Effective July 18, 2008, the Company’s packaging division (INL) (Note 2) was sold for $2,654,000. On the closing date, $2,154,000 was paid to a lender (investor – Note 9) to retire long-term debt. Additionally, $500,000 of the purchase price was held in escrow to secure any of the Company’s indemnification obligations (Note 10). In addition, INL repaid loans and accrued interest of $4,630,813 to Adamis Pharmaceuticals; however, the Company forgave $570,618 of outstanding loans to INL. The 8,000,000 shares of common stock held in escrow in connection with the Company’s purchase of INL were released and cancelled in conjunction with the sale agreement.

In May 2009, INL settled litigation with MBA Marketing, LLC, in which INL was the defendant, awarding the plaintiff $150,000 (Notes 10 and 14). The settlement was included as an indemnity obligation in the purchase agreement, and reduces the purchase price, cash held in escrow and related receivable.

The following table presents information regarding the calculation of the gain from the sale of INL:

Sale Price - Imperium note payment	$	2,154,000
Sale Price - Cash held in Escrow		350,000
Total Sale Price		2,504,000
INL Assets		9,615,763
INL Liabilities		(13,470,365	)
Net Liabilities		(3,854,602	)
Amount of inter-company loan not paid by Buyer		570,618
Total Basis		(3,283,984	)
Gain on Sale	$	5,787,984

Operating loss from INL from the acquisition date through disposal, excluding the gain on sale, was $4,581,256 and for the nine months ended December 31, 2008 was $2,037,145.

Total loss from discontinued operations for the three months ended December 31, 2008 was $150,000, and total income from discontinued operations for the nine months ended December 31, 2008 was $3,750,839.

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NOTE 3: DISCONTINUED OPERATIONS (CONTINUED)

The following table presents the major classes of assets and liabilities that have been presented as assets and liabilities of discontinued operations at:

	December 31, 2008		March 31, 2008
Cash and Cash Equivalents	$	—	$	144,490
Purchase Price Held in Escrow		350,000		—
Accounts Receivable		—		1,361,973
Prepaid Expenses and Other Current Assets		—		12,634
Inventory		—		464,887
Property		—		1,946,607
Long-Term Assets		—		5,695,834
Total Assets from Discontinued Operations	$	350,000	$	9,626,425
Accounts Payable	$	—	$	2,957,629
Accrued Liabilities		—		455,456
Accrued Interest		—		2,036
Deferred Revenue		—		381,193
Debt		—		2,449,847
Total Liabilities from Discontinued Operations	$	—	$	6,246,161

NOTE 4: CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to credit risk consist principally of cash, accounts receivable, purchases and accounts payable.

Cash

The Company at times may have cash in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit. The Company maintains its cash with larger financial institutions. The Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.

Sales and Accounts Receivable

The Company grants credit to customers, substantially all of whom are pharmaceutical distribution and medical parties located throughout the United States. The Company typically does not require collateral from customers. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances.

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NOTE 4: CONCENTRATIONS OF CREDIT RISK (CONTINUED)

Sales and Accounts Receivable (Continued)

The Company had the following concentrations in accounts receivable at:

	December 31, 2008			March 31, 2008
Customer A		58.9	%		29.6	%
Customer B		32.3			—
		91.2	%		29.6	%

The Company is dependant on a limited number of customers for a significant portion of its revenue. The Company had the following concentrations in its sales during the three and nine months ended December 31, 2008 and 2007:

	Three Months ended December 31, 2008			Three Months ended December 31, 2007			Nine Months ended December 31, 2008			Nine Months ended December 31, 2007
Customer A		—	%		35.5	%		15.6	%		26.5	%
Customer B		38.3			17.4			37.3			24.1
		38.3	%		52.9	%		52.9	%		50.6	%

Accounts receivable from continuing operations was $108,791 and $76,270 at December 31, 2008 and March 31, 2008, respectively.

Purchases and Accounts Payable

The Company had no outstanding balance greater than 10% of total accounts payable at December 31, 2008 and March 31, 2008.

The Company is dependant on a limited number of vendors for a significant portion of its trade purchases. The Company had the following concentrations in its trade purchases during the three and nine months ended December 31, 2008 and 2007:

	Three Months ended December 31, 2008			Three Months ended December 31, 2007			Nine Months ended December 31, 2008			Nine Months ended December 31, 2007
Vendor A		19.6	%		—	%		44.2	%		—	%
Vendor B		19.5			—			—			—
Vendor C		—			13.6			—			12.7
		39.1	%		13.6	%		44.2	%		12.7	%

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NOTE 5:	INVENTORY
Inventory consists of the following at:

	December 31, 2008			March 31, 2008
Respiratory and Allergy Products	$	63,556		$	104,151
Less: Obsolescence Reserve		(54,296	)		(79,888	)
Respiratory and Allergy Products, Net		9,260			24,263
Pre-Launch epi Inventory		511,229			—
Inventory, Net	$	520,489		$	24,263

The epi product is in the final phase of validation, and we expect the product to be launched prior to expiration.

NOTE 6:	PROPERTY AND EQUIPMENT
Property and Equipment consists of the following at:

	December 31, 2008			March 31, 2008
Office Furniture and Equipment	$	128,738		$	133,038
Computer Equipment		22,707			22,707
Computer Software		59,639			59,639
Vehicles		13,500			13,500
		224,584			228,884
Less: Accumulated Depreciation		(189,818	)		(174,904	)
	$	34,766		$	53,980

NOTE 7: NOTES PAYABLE TO RELATED PARTIES

The Company had notes payable amounting to $528,000 and $2,244,000 at December 31, 2008 and March 31, 2008, respectively, that bear interest at various rates between 10% and 12%. All of the notes payable were from related parties and $480,000 at March 31, 2008 were not collateralized. The remaining notes were collateralized by the Company’s assets or optional conversion features. The Company retired $1,744,000 of the notes payable in July 2008.

On November 15, 2007, the Company issued a convertible promissory note to a shareholder for $1,000,000 (included in the amounts above) that bore interest at 10% per annum, matured on April 15, 2008, and granted a warrant, that expires on November 15, 2012, to issue 1,000,000 shares of the Company’s common stock with an exercise price of $0.50 per share.

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NOTE 7: NOTES PAYABLE TO RELATED PARTIES (CONTINUED)

The warrant also includes piggyback registration rights in the event the Company files a registration statement with the Securities and Exchange Commission (“SEC”) subsequent to exercise of the warrant. The Company determined the present value of the warrant at the grant date to be $0.42 per share using the Black-Scholes method, assuming 0.10% volatility, 0.00% dividend rate, and a discount rate of 3.67%.

The difference between the present value and the exercise price for the warrants, or $80,000, was recorded as additional paid-in capital and a discount to the note payable, and was accreted on a straight-line basis as interest expense over the term of the note. The balance of the discount was $8,000 at March 31, 2008.

The note also contained a conversion feature that extends the shareholder the right to convert the note into $1,000,000 of the Company’s common stock at a rate of $0.50 per share, or 2,000,000 shares. The conversion of the $1,000,000 note, net of the $80,000 discount, or $920,000, into 2,000,000 shares at a net value of $0.46 per share results in a beneficial conversion. Accordingly, the benefit per share was recorded as additional paid-in capital and a one-time interest charge of $80,000.

The effective interest rate of the note considering the attached warrant and beneficial conversion feature is 39.6%.

The note and accrued interest were retired on July 21, 2008, subsequent to the stated April 15, 2008 maturity date. The Company continued to pay interest through the retirement of the note, and there were no other penalties required by the lender resulting from the default. The additional paid-in capital recorded as a result of the beneficial conversion feature was reversed as the feature was not exercised.

On February 12, 2008, the Company issued a convertible promissory note to Cellegy Pharmaceuticals, Inc. (“Cellegy”) for $500,000 (included in the above amount) that bears interest at 10% per annum, with an original maturity date of June 12, 2009. The conversion feature extends to Cellegy the right to convert the principal amount of the note and accrued interest into shares of the Company’s common stock at the fair market value at the time of the note, or $0.50 per share, in the event that the effective date of the merger between Cellegy and the Company precedes the stated maturity date or an event of default. The merger became effective April 1, 2009 (Note 14).

On December 23, 2008, the Company issued a promissory note to a shareholder for $28,000 that bears interest of 10% with all principal and interest due on the maturity date of December 31, 2009.

NOTE 8: LONG-TERM DEBT

Long-term debt at March 31, 2008 consists of two $1,000,000 notes payable to an investor. The Notes bear interest at 12% and are due on April 1, 2009 and April 10, 2009, respectively. The investor was also issued 800,000 shares of the Company’s stock as a condition to issue the debt, valued at $0.50 per share, or $400,000, recorded as deferred financing costs, which is being amortized using the straight-line method over the term of the note. Unamortized financing costs at March 31, 2008 amounted to $320,000 (Note 10).

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NOTE 8: LONG-TERM DEBT (CONTINUED)

On July 18, 2008, the Company retired all of its long-term debt in plus accrued interest and early payment penalties of $154,000 in connection with the sale of INL. The remaining balance of the unamortized financing costs was charged to interest as a result of the retirement.

NOTE 9: LICENSE AGREEMENT

On July 28, 2006, the Company entered into a nonexclusive, royalty free license agreement with an entity for the technology used to research and develop new viral therapies, and an exclusive royalty-bearing license requiring a small percentage of revenue received by the Company on future products developed and sold with a payment cap of $10,000,000. The Company paid the entity an initial license fee and granted one of the entity’s officers the right to purchase 1,000,000 Founder’s shares in the Company at price of $0.001 pursuant to a separate stock purchase agreement. The Company also granted the entity a royalty-free non-exclusive license to use any improvements made on the existing technology for research purposes only. The Company and the entity have the right to sublicense with written permission of each party. In the event that the entity sublicenses or sells the improved technology to a third party, then a portion of the total payments, to be decided by mutual agreement, will be due to the Company.

The Company is obligated to make the following milestone payments to the entity based on commencement of various clinical trials and submissions of an application to the FDA for regulatory approval:

Amount	Date due
$  50,000	Within 30 days of commencement of Phase I/II clinical trial.
50,000	Within 30 days of commencement of a separate Phase II trial as required by the FDA.
300,000	Within 30 days of commencement of a Phase III trial.
500,000	Within 30 days of submission of a biological license application or a new drug application with the FDA.

The total milestone payments are not to exceed $900,000 and can only be paid one time and will not repeat for subsequent products. At December 31, 2008, no milestones have been achieved.

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NOTE 9: LICENSE AGREEMENT (CONTINUED)

The agreement will remain in effect as long as the patent rights remain in effect. Adamis has the right to terminate the agreement if it is determined that no viable product can come from the technology. Adamis would be required to transfer and assign all filings, rights and other information in its control if termination occurs. Adamis would retain the same royalty rights for license, or sublicense, agreements if the technology is later developed into a product. Either party may terminate the license agreement in the event of a material breach of the agreement by the other party that has not been cured or corrected within 90 days of notice of the breach.

On September 22, 2006, the Company entered into an agreement with an entity to manufacture an influenza vaccine for the Company. The agreement requires the Company to pay $70,000 upon commencement of the project, followed by monthly payments based upon services performed until the project is complete. No product has been manufactured and no payments have been made at December 31, 2008. Once the project begins, the total payments will aggregate $283,420. The project has an open ended start time. Adamis may terminate the agreement upon notice to the other party, other reimbursing the other party for non cancellable materials and supplies ordered, and work in progress, through the date of the termination.

NOTE 10: COMMITMENTS AND CONTINGENCIES

Contingencies

In conjunction with the issuance of the long-term debt and private placement of 800,000 shares of Common Stock to one investor (Notes 8 and 11), the Company entered into a registration rights agreement on December 21, 2007, which required the Company to file a registration statement for the resale of the common shares. The Company must file a registration statement within one year of the first closing date (December 21, 2007). The Company must also use its best efforts to have the registration statement declared effective within 90 days of the filing with the Securities and Exchange Commission (“SEC”). In addition, the Company must use its best efforts to maintain the effectiveness of the registration statement until all common shares have been sold or may be sold without volume restrictions pursuant to Rule 144(k) of the Securities Act.

If the registration statement is not filed or declared effective within the allowable time frame or the Company cannot maintain its effectiveness, the Company must pay partial liquidated damages in cash to the investor amounting to $30,000 for each 30 day period that the Registration default remains uncured up to a cumulative amount of $200,000. This obligation of the Company is to cease if (i) the effective time of the Cellegy merger occurs on or prior to the Registration Deadline, and (ii) certain terms related to these shares in conjunction with the merger are satisfied. The merger transaction was completed April 1, 2009 (Note 14).

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NOTE 10: COMMITMENTS AND CONTINGENCIES (CONTINUED)

Litigation

INL is a party in a pending State of Florida 6^th Judicial Circuit action styled MBA MARKETING, LLC d/b/a EXPRESS PERSONNEL SERVICES, a Florida limited liability company v. INTERNATIONAL LABORATORIES, INC., a Florida for profit corporation CASE NO.: 08-4941 CI 19. The claim asserts money that is due for using the employment services of employees of the Plaintiff in violation of the servicing agreement. The claim was settled in May 2009, granting the plaintiff $150,000, which the Company must deliver in two payments of $75,000 within 75 days and 90 days, respectively, of the settlement agreement. This amount is to be repaid from assets of discontinued operations held in escrow (Note 3).

NOTE 11: CAPITAL STRUCTURE

The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock with a par value of $0.0001 per share.

In June 2006, the Company was founded through an issuance of 16,684,500 shares of common stock for $0.001 per share or $16,685. The Company has repurchase rights related to 10,409,500 of these shares, which have not been included in the calculation of weighted average shares outstanding.

In July 2006, the Company issued 1,253,000 of its common stock to seed investors for $0.10 per share, or $125,300.

During 2007, the Company retired outstanding debt and accrued interest through issuing 629,737 shares of its common stock at $0.50 per share, or $314,868.

On various dates during 2006 and 2007, the Company sold 1,160,400 shares of its common stock valued at $0.50 per share, or $580,200, in a private placement.

In April 2007, the Company issued 5,159,807 shares of its common stock in exchange for all of the outstanding shares of HVG at $0.50 per share (Note 2). The Company had repurchase options related to 1,000,000 of the shares, of which 684,000 have lapsed. The remaining 316,000 were exercised by the Company and repurchased at $.001 per share per the repurchase agreement.

In November 2007, 669,019 shares of the Company’s common stock were issued to executives of the Company at $0.50 per share with various repurchase rights, which are not included in the calculation of weighted average shares outstanding.

In November 2007, the Company issued 50,000 shares of its common stock at $0.50 per share in lieu of interest associated with an outstanding loan.

In November 2007, the Company issued the remaining 50,000 shares of its common stock at $0.50 per share in lieu of interest associated with an outstanding loan.

In December 2007, the Company issued 800,000 of its common stock at $0.50 per share as costs to obtain long-term debt (Note 8).

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NOTE 11: CAPITAL STRUCTURE (CONTINUED)

In December 2007, the Company issued 2,000,000 shares of its common stock in exchange for all of the outstanding shares of INL at $0.50 per share.

On various dates during 2007, the Company sold 6,591,000 shares of its common stock valued at $0.50 per share, or $3,295,500, in a private placement.

On various dates during the three month period ended March 31, 2008, the Company sold 392,666 shares of its common stock valued at $0.75, or $294,499, in a private placement.

On various dates during the nine month period ended December 31, 2008, the Company sold 1,771,651 shares of its common stock valued at $0.75, or $878,740, in a private placement.

NOTE 12: INCOME TAXES

The Company did not elect to file consolidated tax returns for the year ended March 31, 2008. Accordingly, the deferred tax assets for each of the consolidated companies can only be used to offset future tax expense of the respective company.

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NOTE 12: INCOME TAXES (CONTINUED)

The income tax benefit from continuing operations consists of the following:

	Three Months Ended December 31,
		2008			2008			2007			2007
	Adamis Pharmaceuticals			Adamis Labs			Adamis Pharmaceuticals			Adamis Labs
Current	$	—		$	—		$	—		$	—
Deferred		(206,000	)		(136,000	)		(96,000	)		(174,000	)
Total		(206,000	)		(136,000	)		(96,000	)		(174,000	)
Change in Valuation Allowance		206,000			136,000			96,000			174,000
Tax Benefit, net	$	—		$	—		$	—		$	—

	Nine Months Ended December 31,
	2008			2008			2007			2007
	Adamis Pharmaceuticals			Adamis Labs			Adamis Pharmaceuticals			Adamis Labs
Current	$	—		$	—		$	—		$	—
Deferred		(136,000	)		(626,000	)		(288,000	)		(656,000	)
Total		(136,000	)		(626,000	)		(288,000	)		(656,000	)
Change in Valuation Allowance		136,000			626,000			288,000			656,000
Tax Benefit, net	$	—		$	—		$	—		$	—

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NOTE 12: INCOME TAXES (CONTINUED)

The significant components of the deferred tax assets from continuing operations at December 31, 2008 and March 31, 2008 are summarized below:

	December 31, 2008			December 31, 2008			March 31, 2008			March 31, 2008
	Adamis Pharmaceuticals			Adamis Labs			Adamis Pharmaceuticals			Adamis Labs
Net Operating Loss Carryforwards	$	1,080,000		$	1,424,000		$	812,000		$	843,000
Deferred Tax Assets		73,000			178,000			128,000			133,000
Deferred Tax (Liabilities)		(200,000	)		—			(123,000	)		—
Net Deferred Tax Assets		953,000			1,602,000			817,000			976,000
Less Valuation Allowance		(953,000	)		(1,602,000	)		(817,000	)		(976,000	)
Net Deferred Tax Assets	$	—		$	—		$	—		$	—

We have determined at December 31, 2008 and March 31, 2008 that a full valuation allowance would be required against all of our operating loss carryforwards and deferred tax assets that we do not expect to be utilized by deferred tax liabilities. The following tables reconcile our income (loss) before income taxes:

			Three Months Ended December 31,
			2008			2008			2007			2007
			Adamis Pharmaceuticals*			Adamis Labs			Adamis Pharmaceuticals			Adamis Labs
Income (Loss)			$	(440,000	)	$	(271,000	)	$	(593,000	)	$	(639,000	)
Permanent Differences:
Non-Cash Interest				—			—			129,000			—
INL Loss				150,000			—			—			—
Meals and Entertainment				(205,000	)		8,000			(1,000	)		2,000
			$	(495,000	)	$	(263,000	)	$	(465,000	)	$	(637,000	)
Federal Statutory Rate	34.00	%	$	(150,000	)	$	(92,000	)	$	(202,000	)	$	(217,000	)
State Income Tax, net of Federal Tax	3.63	%		(16,000	)		(10,000	)		(21,000	)		(23,000	)
Intercompany Eliminations	37.63	%		(20,000	)		(37,000	)		79,000			65,000
Permanent Differences	37.63	%		(20,000	)		3,000			48,000			1,000
Change in Valuation Allowance				206,000			136,000			96,000			174,000
Expected Tax (Benefit) Expense			$	—		$	—		$	—		$	—

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NOTE 12: INCOME TAXES (CONTINUED)

			Nine Months Ended December 31,
			2008 Adamis Pharmaceuticals*			2008 Adamis Labs			2007 Adamis Pharmaceuticals			2007 Adamis Labs
Income (Loss)			$	3,738,000		$	(1,443,000	)	$	(1,390,000	)	$	(1,672,000	)
Permanent Differences:
Non-Cash Interest				248,000			—			129,000			—
INL Gain				(4,604,000	)		—			—			—
Meals and Entertainment				26,000			13,000			6,000			12,000
			$	(592,000	)	$	(1,430,000	)	$	(1,255,000	)	$	(1,660,000	)
Federal Statutory Rate	34.00	%	$	1,271,000		$	(492,000	)	$	(472,000	)	$	(568,000	)
State Income Tax, net of Federal Tax	3.63	%		136,000			(52,000	)		(50,000	)		(61,000	)
Intercompany Eliminations	37.63	%		86,000			(87,000	)		183,000			(31,000	)
Permanent Differences	37.63	%		(1,629,000	)		5,000			51,000			4,000
Change in Valuation Allowance				136,000			626,000			288,000			656,000
Expected Tax Benefit			$	—		$	—		$	—		$	—

*   Does not include operating loss from discontinued operations.

We paid no income tax during the three and nine months ended December 31, 2008 and 2007. We do not expect to pay income tax in the year ending March 31, 2009.

NOTE 13: GOING CONCERN

The Company’s consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as shown in the accompanying consolidated financial statements, the Company has sustained substantial losses from continuing operations since inception and has not introduced new revenue producing products since inception. In addition, the Company has used, rather than provided, cash in its continuing operations. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. It is management’s plan in this regard to obtain additional working capital through debt and equity financings. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

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NOTE 14: SUBSEQUENT EVENTS

Notes Payable to Related Parties

On January 8, 2009 and March 10, 2009, the Company issued promissory notes to a shareholder for $66,000 and $5,765, respectively, which bear interest of 10% with all principal and interest due on the maturity dates of January 8, 2010 and March 10, 2010.

Factoring and Security Agreement

On January 22, 2009, the Company entered into a one-year factoring and security agreement with a third party. The agreement provides for a maximum funding amount of $300,000. The agreement stipulates an initial and periodic factoring fee of .375%. The Company may take advances of 80% of the net factored accounts.

Merger with Cellegy

The Company entered into a merger agreement on February 12, 2008 with Cellegy. The stockholders of Cellegy and the Company approved the merger transaction and related matters at an annual meeting of Cellegy’s stockholders and at a special meeting of Adamis stockholders each held on March 23, 2009. On April 1, 2009, Cellegy completed the merger transaction with the Company. In connection with the closing of the merger transaction, the Company’s $500,000 promissory note converted into shares of the Company’s stock, and these shares were immediately cancelled in accordance with the underlying note payable (Note 7).

In connection with the consummation of the merger and pursuant to the terms of the Merger Agreement, Cellegy changed its name from Cellegy Pharmaceuticals, Inc. to Adamis Pharmaceuticals Corporation, and the Company changed its corporate name to Adamis Corporation.

Pursuant to the terms of the Merger Agreement, immediately before the consummation of the merger Cellegy affected a reverse stock split of its common stock. Pursuant to this reverse stock split, each 9.929060333 shares of common stock of Cellegy that were issued and outstanding immediately before the effective time of the merger was converted into one share of common stock and any remaining fractional shares held by a stockholder (after the aggregating fractional shares) were rounded up to the nearest whole share (the “Reverse Split”).

As a result, the total number of shares of Cellegy that were outstanding immediately before the effective time of the merger were converted into approximately 3,000,000 shares of post-Reverse Split shares of common stock of the Company. Pursuant to the terms of the Merger Agreement, at the effective time of the merger, each share of the Company’s common stock that was issued and outstanding immediately before the effective time of the merger ceased to be outstanding and was converted into the right to receive one share of common stock of Cellegy.

During 2008, the Cellegy’s common stock traded on the OTCBB under the symbol “CLGY.OB.” In April, 2009, and following the merger with Cellegy and the change of Cellegy’s corporate name, the trading symbol for the common stock changed to “ADMP”.

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NOTE 14: SUBSEQUENT EVENTS (CONTINUED)

Merger with Cellegy (Continued)

Also in connection with the closing of the merger, Cellegy amended its certificate of incorporation to increase the authorized number of shares of common stock from 50,000,000 to 175,000,000 and the authorized number of shares of preferred stock from 5,000,000 to 10,000,000.

Cellegy’s stockholders also approved a new 2009 Equity Incentive Plan (the “2009 Plan”), which became effective upon the closing of the merger. The 2009 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation (collectively “stock awards”). In addition, the 2009 Plan provides for the grant of performance cash awards. The aggregate number of shares of common stock that may be issued initially pursuant to stock awards under the 2009 Plan is 7,000,000 shares. The number of shares of common stock reserved for issuance will automatically increase on January 1 of each calendar year, from January 1, 2010 through and including January 1, 2019, by the lesser of (a) 5.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year or (b) a lesser number of shares of common stock determined by the Company’s board of directors before the start of a calendar year for which an increase applies.

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Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet

	Historical (1)
	Cellegy December 31, 2008			Adamis December 31, 2008			Pro FormaAdjustments				Pro Forma As Adjusted
ASSETS
Current assets:
Cash and cash equivalents	$	129,000		$	1,000		$	—			$	130,000
Accounts receivable					109,000							109,000
Inventory, net					520,000							520,000
Prepaid expenses and other current assets		34,000			18,000							52,000
Assets from Discontinued Operations					350,000							350,000
Total current assets		163,000			998,000			—				1,161,000
Note receivable from related party		500,000						(500,000	)	(B)		—
Interest receivable from related party		44,000						(44,000	)	(C)		—
Propery and equipment, net					35,000							35,000
Deferred acquisition costs					148,000			(148,000	)	(E)		—
Other assets					22,000							22,000
Total assets	$	707,000		$	1,203,000		$	(692,000	)		$	1,218,000
LIABILITIES AND STOCKHOLDERS DEFICIT
Current liabilities:
Accounts payable	$	72,000		$	845,000		$	—			$	917,000
Accrued expenses and other current payables		185,000			266,000			(44,000	)	(D)		407,000
								100,000		(E)		100,000
Notes Payable to related parties					528,000			(500,000	)	(B)		28,000
Total current liabilities		257,000			1,639,000			(444,000	)			1,452,000
Notes payable		778,000										778,000
Total liabilities		1,035,000			1,639,000			(444,000	)			2,230,000
Stockholders’ equity (deficit):
Preferred Stock
Common stock		3,000			4,000			(3,000	)	(F)		4,000
Additional paid in capital		125,770,000						(125,770,000	)	(F)		—
Additional paid in capital					9,587,000			(328,000	)	(A)		9,259,000
Accumulated deficit		(126,101,000	)		(10,027,000	)		126,101,000		(F)		(10,027,000	)
								(248,000	)	(E)		(248,000	)
Total stockholders’ deficit		(328,000	)		(436,000	)		(248,000	)			(1,012,000	)
Total liabilities and stockholders’ deficit	$	707,000		$	1,203,000		$	(692,000	)		$	1,218,000

(1)   Amounts derived from the audited consolidated financial statements of Cellegy's December 31, 2008 Form 10-K filed with the SEC on May 12, 2009 and from the unaudited consolidated financial statements of Adamis beginning on page 1 of this Form 8-K/A

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Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations

	Historical (2)
	Cellegyfor the nine months endedSeptember 30, 2008			Adamis for the nine months ended December 31, 2008			Pro FormaAdjustments				Pro Forma As Adjusted
Revenues:
Product sales	$	—		$	403,000		$	—			$	403,000
Total revenue		—			403,000			—				403,000
Costs and expenses:
Cost of sales		—			224,000			—				224,000
Research and development		3,000			363,000			—				366,000
Selling, general and administrative		1,060,000			2,890,000			—				3,950,000
Total costs and expenses		1,063,000			3,477,000			—				4,540,000
Loss from operations		(1,063,000	)		(3,074,000	)		—				(4,137,000	)
Other income (expense)
Interest and other income		60,000			1,000			(32,000	)	(C)		29,000
Interest and other expense		(206,000	)		(420,000	)		38,000		(D)		(588,000	)
Total other income (expense)		(146,000	)		(419,000	)		6,000				(559,000	)
Loss from continuing operations	$	(1,209,000	)	$	(3,493,000	)	$	6,000			$	(4,696,000	)
Basic and diluted net loss per common share	$	(0.04	)	$	(0.14	)	$	—			$	(0.17	)
Weighted-average shares used in computing basic and diluted net loss per share		29,834,796			24,707,514			(26,834,796	)	(F)		27,707,514

(2)   Amounts derived from the audited consolidated financial statements of Cellegy previously included in the Form S-4 registration statement and from the unaudited consolidated financial statements of Adamis beginning on page 1 of this Form 8-K/A

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1. Pro forma adjustments

          (A) To record the fair value of Cellegy’s outstanding common stock assumed in connection with the merger.

          (B) To reflect the conversion of the related party note between Cellegy and Adamis to shares of Adamis common stock which will be subsequently cancelled.

          (C) To reflect the elimination of accrued interest income between Cellegy and Adamis in connection with the related party note as mentioned in Note (B) above.

          (D) To reflect the elimination of accrued interest expense between Cellegy and Adamis in connection with the related party note as mentioned in Note (B) above.

          (E) To reflect the expensing of deferred direct costs of the business combination and the accrual of estimated direct costs to be incurred after December 31, 2008 by Cellegy and Adamis to consummate the merger. Merger costs include fees payable for legal, accounting, printing and other consulting services.

          (F) To adjust Cellegy’s historical common shares to reflect the reverse stock split and issuance of post split Cellegy shares to Adamis shareholders on a one for one basis. The pro forma adjustment assumes that the reverse stock split of the Cellegy shares contemplated by the merger agreement will be approximately 1:9.945 and that, pursuant to the terms of the merger agreement, the Cellegy shareholders will hold 3,000,000 shares of the combined company immediately after the merger. Pursuant to the applicable standards for calculating weighted average shares outstanding for a particular period, the calculation of Adamis weighted average shares outstanding for the respective periods excludes outstanding shares that are subject to stock restriction agreements.

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADAMIS PHARMACEUTICALS CORPORATION
Dated: June 15, 2009	By:	/s/ Robert O. Hopkins
	Name:	Robert O. Hopkins
	Title:	Chief Financial Officer

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