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Item 7. Management’s Discussion and Analysis

2022-03-24 compared with 2021-03-25 · 391 added, 265 removed, 101 unchanged (87% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be materially affected by the uncertainties and risk factors described throughout this Annual Report.

Annual Report.

See “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially.

ADMA Biologics, Inc.

(the “Company,” “ADMA,” “we,” “us” or “our”) is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty plasma-derived biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases.

Our targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or who may be immune-suppressed for medical reasons.

We currently have three products with U.S.

treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases.

Our targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or

who may be immune-suppressed for medical reasons.

Through our ADMA BioManufacturing business segment, we currently have three products with U.S.

Food and Drug Administration (the “FDA”) approval, all of which are currently marketed and commercially available:

(i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”), and for which we received FDA approval on May 9, 2019 and commenced commercial sales in August 2019;

(ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019;

and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing HBsAg and other listed exposures to Hepatitis B.

BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”), and for which we

received FDA approval on May 9, 2019 and commenced commercial sales in August 2019;

(ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which we received FDA approval on

April 1, 2019 and commenced first commercial sales in October 2019;

and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing HBsAg and other listed exposures to Hepatitis

We seek to develop a pipeline of plasma-derived therapeutics, including a product based on our most recently approved patent application under U.S.

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pneumonia infection for an immunoglobulin manufactured to contain standardized antibodies to numerous serotypes of S.

Our products and product candidates are intended to be used by physician specialists focused on caring for immune-compromised patients with or at risk for certain infectious diseases.

We manufacture these products at our FDA-licensed, 400,000-liter annual capacity plasma fractionation and purification facility located in Boca Raton, Florida (the “Boca Facility”).

Based on current production yields and our ongoing supply chain enhancement and capacity expansion initiatives, we believe this facility has the potential to produce quantities of our immune globulin (“IG”) products of more than $250 million in annual revenue beginning in 2024 as well as achieving profitability during the first quarter of 2024, as we ramp-up production over the next three to five years.

Through our ADMA BioCenters subsidiary, we currently operate as an FDA-approved source plasma collection organization in the U.S.

This business unit, which we refer to as our Plasma Collection Centers business segment, provides us with a portion of our blood plasma for the manufacture of our products and product candidates, and also allows us to sell certain quantities of source plasma to customers for further manufacturing.

As a part of our planned supply chain robustness initiative, we opened two new plasma collection centers during 2020, and we now have seven plasma collection centers in various stages of approval and development, including three that are fully operational and collecting plasma.

With respect to our fully operational plasma collection centers, two hold FDA licenses and the third has a Biologics License Application (“BLA”) pending an FDA decision expected in the fourth quarter of 2021.

In addition, one of our FDA-approved plasma collection centers also has approvals from the Korean Ministry of Food and Drug Safety (“MFDS”), as well as FDA approval to implement a Hepatitis B immunization program.

After giving effect to the progress we made in 2020 with our plasma collection network expansion, we believe we remain on track to achieve our goal of having 10 or more plasma collection centers operating in the U.S.

A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase and market conditions at the time of sale.

Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products or product candidates is sold to third-party customers in the U.S.

Our products and product

candidates are intended to be used by physician specialists focused on caring for immune-compromised patients with or at risk for certain infectious diseases.

We manufacture these products at our FDA-licensed, plasma fractionation and purification facility located in Boca Raton, Florida with a peak annual processing capability of up to 600,000 liters (the “Boca Facility”).

Based on current production yields, our ongoing supply chain enhancements and capacity expansion initiatives, we believe this facility has the potential to produce sufficient quantities of our immune globulin (“IG”) products representing more

than $250 million in annual revenue beginning in 2024 and potentially in excess of $300 million of annual revenue thereafter, as well as achieving profitability during the first quarter of 2024, as we ramp-up production over the next two to four

Through our ADMA BioCenters subsidiary, we currently operate FDA-licensed source plasma collection facilities in the U.S.

This business unit, which we refer to as our Plasma Collection Centers business segment,

provides us with a portion of our blood plasma for the manufacture of our products and product candidates, and also allows us to sell certain quantities of source plasma to customers for further manufacturing.

As a part of our planned supply

chain robustness initiative, we have opened five new plasma collection centers during the past 18 months, and we now have ten plasma collection centers in various stages of approval and development, including six that are operational and

collecting plasma.

With respect to our operational plasma collection centers, five plasma collection centers currently hold FDA licenses.

In addition, one of our FDA-approved plasma collection centers also has approvals from the Korean Ministry

of Food and Drug Safety (“MFDS”), as well as FDA approval to operate a Hepatitis B immunization program.

After giving effect to the progress we made in 2020 and 2021 with our plasma collection network expansion, we believe we remain on track to

achieve our goal of having 10 plasma collection centers licensed by the FDA by the end of 2023.

A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source plasma

annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase and market conditions at the time of sale.

Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products or

product candidates is sold to third-party customers in the U.S.

and in other locations outside the U.S.

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We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products.

In January 2020, we announced our entry into a five-year manufacturing and supply agreement to produce and sell these intermediate by-products, which are used as the starting raw material to produce other plasma-derived biologics.

In addition, from time to time we provide contract manufacturing and testing services for certain third-party clients.

We also provide laboratory contracting services to certain customers and anticipate providing contract filling, labeling and packing services upon FDA approval and implementation of our in-house fill-finish capabilities through our Vanrx SA25 Workcell aseptic filling machine.

On June 6, 2017, we completed the acquisition of certain assets (the “Biotest Assets”) of the Therapy Business Unit (“BTBU”) of Biotest Pharmaceuticals Corporation (“BPC” and, together with Biotest AG, “Biotest”), which included two FDA-licensed products, Nabi-HB and BIVIGAM, and an FDA-licensed plasma fractionation facility located in Boca Raton, FL (the “Boca Facility”) (the “Biotest Transaction”).

In January 2020, we announced our entry into a

five-year manufacturing and supply agreement to produce and sell these intermediate by-products, which are used as the starting raw material to produce other plasma-derived biologics.

In addition, from time to time we provide contract

manufacturing and testing services for certain third-party clients.

We also provide laboratory contracting services to certain customers.

On September 8, 2021, we announced that the FDA granted approval for our aseptic fill-finish machine and our related internal fill-finish processes.

This approval provides us with in-house fill-finish operations

capable of sufficiently addressing our forecasted production requirements for our FDA approved commercial products.

With our fill-finish machine and related processes now operational, we anticipate improved gross margins, enhanced patient supply

consistency, potentially accelerated inventory production cycle times, and increased control and visibility of commercial product lot releases.

We also expect that the approval of our in-house fill-finish processes and capabilities will

potentially enable us with the opportunity to onboard new fill-finish contract manufacturing opportunities with third parties as a potential new revenue stream.

which included two FDA-licensed products, Nabi-HB and BIVIGAM, and the Boca Facility (the “Biotest Transaction”).

BIVIGAM is a plasma-derived IVIG that contains a broad range of antibodies similar to those found in normal human plasma.

These antibodies are directed against bacteria and viruses and help to protect PI patients against serious infections.

These antibodies are directed against bacteria and viruses and help to protect PI patients

against serious infections.

BIVIGAM is a purified, sterile, ready-to-use preparation of concentrated human Immunoglobulin G antibodies indicated for the treatment of PI, a group of genetic disorders.

This includes, but is not limited to, the humoral immune defect in common variable immunodeficiency, X-linked agammaglobulinemia, congenital agammaglobulinemia, Wiskott-Aldrich syndrome and severe combined immunodeficiency.

This includes, but is not limited to, the

humoral immune defect in common variable immunodeficiency, X-linked agammaglobulinemia, congenital agammaglobulinemia, Wiskott-Aldrich syndrome and severe combined immunodeficiency.

These PIs are a group of genetic disorders.

Based on recent estimates, these disorders are no longer considered to be very rare, with as many as one in every 1,200 people in the United States having some form of PI.

Based on recent

estimates, these disorders are no longer considered to be very rare, with as many as one in every 1,200 people in the United States having some form of PI.

On May 9, 2019, the FDA approved the Prior Approval Supplement (the “PAS”) for the use of our IVIG manufacturing process, thereby enabling us to commence commercial sales of this product in the United States.

We resumed production of BIVIGAM during the fourth quarter of 2017 and commercial production is ongoing, using our FDA-approved IVIG manufacturing process under U.S.

resumed production of BIVIGAM during the fourth quarter of 2017 and commercial production is ongoing, using our FDA-approved IVIG manufacturing process under U.S.

Department of Health and Human Services (“HHS”) License No.

We commenced commercial sales for this product in August of 2019.

ASCENIV is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies, which are proteins that are used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent against infection and disease.

commercial sales for this product in August of 2019.

On April 28, 2021, we announced that the FDA granted approval for our expanded plasma pool production scale process, allowing for a 4,400-liter plasma pool for the manufacture of our BIVIGAM IVIG product.

increased IVIG plasma pool scale, which allows us to produce BIVIGAM at an expanded capacity utilizing the same equipment, release testing assays and labor force, has begun to have a favorable impact on our gross margins and operating results,

beginning in the third quarter of 2021.

against infection and disease.

We manufacture ASCENIV under HHS License No.

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The Centers for Medicare and Medicaid Services (“CMS”) has issued a permanent, product-specific-J-code for ASCENIV.

Under the Healthcare Common Procedure Coding System (“HCPCS”), the J-code (J1554) will become effective April 1, 2021 and will replace the currently issued C-code for ASCENIV (C9072), which can continue to be utilized in the interim for reimbursement purposes.

As part of our proprietary manufacturing process for ASCENIV, we leverage our unique, patented plasma donor screening methodology and tailored plasma pooling design, which blends normal source plasma and plasma from donors tested to have high levels of neutralizing antibody titers to respiratory syncytial virus (“RSV”) using our proprietary microneutralization testing assay.

We are able to identify the high titer or “hyperimmune” plasma that meets our internal and required specifications for ASCENIV with our patented testing methods and assay.

This type of high titer plasma is typically found in less than 10% of the total donor collection samples we test.

ASCENIV is approved for the treatment of Primary Immune Deficiency Disorder (“PIDD”), a class of inherited genetic disorders that causes a deficient or absent immune system in adults and adolescents (12 to 17 years of age).

the Healthcare Common Procedure Coding System (“HCPCS”), the J-code (J1554) became effective April 1, 2021.

As part of our proprietary manufacturing process for ASCENIV, we leverage our unique, patented plasma donor screening methodology and

tailored plasma pooling design, which blends normal source plasma and plasma from donors tested to have high levels of neutralizing antibody titers to respiratory syncytial virus (“RSV”) using our proprietary microneutralization testing assay.

are able to identify the high titer or “hyperimmune” plasma that meets our internal and required specifications for ASCENIV with our patented testing methods and assay.

This type of high titer plasma is typically found in less than 10% of the

total donor collection samples we test.

Our pivotal Phase 3 clinical trial in 59 PIDD patients met the primary endpoint of no Serious Bacterial Infections reported during 12 months of treatment.

Secondary efficacy endpoints further demonstrated the benefits of ASCENIV in the low incidence of infection, therapeutic antibiotic use, days missed from work/school/daycare and unscheduled medical visits and hospitalizations.

We believe this clinical data together with the FDA approval for the treatment of PIDD better positions ADMA to further evaluate ASCENIV in immune-compromised patients infected with or at-risk for RSV infection or potentially other respiratory viral pathogens.

We plan to work with the FDA and the immunology and infectious disease community to design a clinical trial to evaluate the use of ASCENIV in this patient population in the near future.

Secondary efficacy endpoints further demonstrated the benefits of ASCENIV in the

low incidence of infection, therapeutic antibiotic use, days missed from work/school/daycare and unscheduled medical visits and hospitalizations.

We believe this clinical data together with the FDA approval for the treatment of PIDD better

positions ADMA to further evaluate ASCENIV in immune-compromised patients infected with or at-risk for RSV infection or potentially other respiratory viral pathogens.

We may elect to work with the FDA and the immunology and infectious disease

community to potentially design an appropriate clinical trial to evaluate the use of ASCENIV in this patient population or other appropriate populations.

Commercial sales of ASCENIV commenced in October of 2019

and the product is currently available to U.S.-based healthcare professionals for prescription and use in U.S.-based patients .

Nabi-HB is a hyperimmune globulin that is rich in antibodies to the Hepatitis B virus.

Nabi-HB is a purified human polyclonal antibody product collected from plasma donors who have been previously vaccinated with a Hepatitis B vaccine.

Nabi-HB is indicated for the treatment of acute exposure to blood containing HBsAg, prenatal exposure of infants born to HBsAg-positive mothers, sexual exposure to HBsAg-positive persons and household exposure to persons with acute Hepatitis B virus infection in specific, listed settings.

Nabi-HB is a purified human polyclonal antibody product collected from plasma donors who have been previously vaccinated with a

Hepatitis B vaccine.

acute Hepatitis B virus infection in specific, listed settings.

Hepatitis B is a potentially life-threatening liver infection caused by the Hepatitis B virus.

It is a major global health problem.

It can cause chronic infection and puts people at high risk of death from cirrhosis and liver cancer.

It can cause chronic infection and puts people at

high risk of death from cirrhosis and liver cancer.

Nabi-HB has a well-documented record of long-term safety and effectiveness since its initial market introduction.

The FDA approved Nabi-HB on March 24, 1999.

Production of Nabi-HB at the Boca Facility has continued under our leadership since the third quarter of 2017.

Production of Nabi-HB at the Boca

Facility has continued under our leadership since the third quarter of 2017.

In early 2018, we received authorization from the FDA for the release of our first commercial batch of Nabi-HB for commercial distribution in the U.S.

and we continue to manufacture Nabi-HB under HHS License No.

and we continue to

manufacture Nabi-HB under HHS License No.

IMPACT OF THE COVID-19 CRISIS

We continue to closely monitor ongoing developments in connection with the COVID-19 pandemic and its impacts to our commercial manufacturing operations and plasma collections facilities, including but not limited to potential disruptions to our supply chain operations, including collections of source plasma, procurement of raw materials and packaging materials, a portion of which are sourced internationally, and testing of finished drug product that is required prior to its availability for commercial sale.

Such testing has historically been performed by contract laboratories outside the United States.

In addition, travel and other restrictions that have been implemented in the United States have impacted our commercial engagement efforts with respect to some of our products, including BIVIGAM and ASCENIV, as trade shows, industry and medical conferences and other events we had been planning to utilize and exhibit and attend with our staff to increase awareness of our products by physicians and payers remain subject to reduction in scope, rescheduling or outright cancellation due to the pandemic.

We have experienced some delays with our third-party vendors and testing laboratories which perform final drug product GMP release testing.

In response to these delays, we have added additional release testing laboratories to our FDA-approved consortium listed in our drug approval documents which we believe has adequately addressed this issue.

In July 2020, we began receiving FDA lot releases with testing data from our new testing laboratory vendor.

In addition, due to previous state and local “shelter-in-place” orders, as well as ongoing requirements around physical distancing, we have experienced, and may experience in the future, lower than normal donor collections at our FDA-approved plasma collection centers.

We were also subject to delays in shipments of source plasma from our contracted third-party suppliers, as well as delays in deliveries for personal protective equipment, reagents and other non-plasma raw materials and supplies used in the manufacture and distribution of our products.

We have also experienced supply chain delays as a result of certain of our suppliers diverting significant resources towards the rapid development and distribution of COVID-19 vaccines.

In addition, we have experienced challenges with respect to our customer engagement initiatives, as our sales and medical affairs field forces face difficulties communicating directly with physicians and other healthcare professionals and the cancellation or postponement of a number of key scientific and medical conferences, further limiting our ability to communicate with potential customers.

We have implemented a comprehensive suite of virtual engagement initiatives, though clinician engagement remains lower due to continuing COVID-19-related priorities at U.S.

We continue to monitor the ongoing developments related to the COVID-19 pandemic, including the emergence of the Delta and Omicron variants and other resistant strains of the coronavirus, and its impacts to our

commercial and manufacturing operations and plasma collection facilities, including collections of source plasma, procurement of raw materials and packaging materials, a portion of which are sourced internationally, and the testing of finished

drug product that is required prior to its availability for commercial sale.

A substantial portion of such testing has historically been performed by contract laboratories outside the United States.

Due to a combination of previous state and local “shelter-in-place” orders, as well as government stimulus packages, persisting social distancing measures and varying roll-outs of vaccinations by state, we have

experienced lower than normal donor collections at our FDA approved plasma collection centers.

We were also subject to delays in shipments of source plasma from our contracted third-party suppliers, as well as delays in deliveries for personal

protective equipment, reagents and other non-plasma raw materials and supplies used in the manufacture and distribution of our products.

In addition, we are subject to supply chain delays as a result of certain of our suppliers diverting

significant resources towards the rapid development and distribution of COVID-19 vaccines and, as a result, we have elected to carry more raw materials inventory than we have in the past.

The COVID-19 pandemic has also impacted, to a certain

degree, our customer engagement initiatives, whereby ADMA’s sales and medical affairs field personnel have faced difficulties communicating directly with physicians and other healthcare professionals, as well as the cancellation or postponement

of a number of key scientific and medical meetings, further limiting our ability to communicate with potential customers.

We have implemented a comprehensive suite of virtual engagement initiatives;

however, clinician engagement has been reduced

due to rapidly evolving COVID-19 priorities at U.S.

medical centers.

As of the date of this report, we do not believe that the operations and immunoglobulin and plasma products production at our Boca Facility, our contract fill/finishers or our plasma collection facilities have been significantly impacted by the COVID-19 pandemic.

As a result, as of the date of this report, we have not experienced, and currently do not anticipate, any material impairments with respect to any of our long-lived assets, including our property and equipment, goodwill or intangible assets.

Although the COVID-19 pandemic has not, to date, materially adversely impacted our capital and financial resources, due to the economic uncertainty that has resulted from the pandemic, and the potential impact of such to our stakeholders, we are unable to predict with certainty any potential impacts to our business.

Although we believe the effects of the COVID-19 pandemic on our business and our operations will be temporary, at the present time we are unable to determine the ultimate duration of the pandemic or its long-term effects on, among other things, the global, national or local economies, the capital and credit markets, our workforce, our customers or our suppliers.

As a result, we are unable to predict whether the COVID-19 crisis will have a material adverse impact on our business, financial condition, liquidity and results of operations.

The pandemic could also impact our ability to interact with the FDA or other regulatory authorities and may result in delays in the conduct of inspections or review of pending applications or submissions.

received several FDA approvals and two FDA inspections of the Boca Facility were completed during the year ended December 31, 2021, no assurances can be provided as to the timing for completion of any other regulatory submissions or applications

that may be impacted by restrictions related to COVID-19.

During the year ended December 31, 2021, our revenue attributable to international customers was approximately 13% of our total revenues.

As we seek to grow this aspect of our business, we may also be subject to the

impacts of the COVID-19 pandemic in locations outside the United States.

Notwithstanding the foregoing, the COVID-19 pandemic to date has not had a material impact on our financial condition or results of operations, and we do not believe that our production operations at the Boca

Facility, our contract fill/finishers or our plasma collection facilities have been significantly impacted by the COVID-19 pandemic.

As a result, we do not anticipate and have not experienced any material impairments with respect to any of our

long-lived assets, including our property and equipment, goodwill or intangible assets.

Although the COVID-19 pandemic has not, to date, materially adversely impacted our capital and financial resources, because we are unable to determine the ultimate severity or duration of the pandemic or its

long-term effects on, among other things, the global, national or local economies, the capital and credit markets or our workforce, customers or suppliers, at this time we are unable to predict whether COVID-19 will have a material adverse impact

on our business, financial condition, liquidity and results of operations.

RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“U.S.

The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

Generally Accepted in the United States of America (“U.S.

The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and

On an ongoing basis, we evaluate these estimates and assumptions, including those described below.

We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the

circumstances.

These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results and experiences may differ materially from these estimates.

Significant estimates include the realizable value of accounts receivable, valuation of inventory, assumptions used in projecting future liquidity and capital requirements, assumptions used in the fair value of awards granted under our equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for our deferred tax assets.

Actual results and experiences may differ materially from

these estimates.

Significant estimates include rebates and certain other deductions from gross revenues, impairment of long-lived assets, assumptions used in projecting future liquidity and capital requirements, assumptions used in the fair value

of awards granted under our equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for our deferred tax assets.

Some of the estimates and assumptions we have to make under U.S.

GAAP require difficult, subjective and/or complex judgments about matters that are inherently uncertain and, as a result, actual results could differ from those estimates.

Due to the estimation processes involved, the following summary of accounting policies and their application are considered to be critical to understanding our business operations, financial condition and results of operations.

For a detailed discussion on the application of these and our other accounting policies, see Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Revenue Recognition

Revenues for the years ended December 31, 2020 and 2019 are comprised of (i) revenues from the sale of our FDA-approved immunoglobulin products, (ii) product revenues from the sale of human plasma collected from our Plasma Collection Centers business segment, (iii) product revenues from the sale of intermediate fractions, (iv) contract manufacturing and testing revenue from certain clients;

and (v) license revenues attributable to the out-licensing of ASCENIV in December 2012 to Biotest to market and sell this product in Europe and selected countries in North Africa and the Middle East.

Biotest has provided us with certain services and financial payments in accordance with the related Biotest license agreement and is obligated to pay us certain amounts in the future if certain milestones are achieved.

Deferred revenue is recognized over the term of the Biotest license.

Deferred revenue is amortized into income for a period of approximately 22 years, the term of the Biotest license agreement.

Product revenue is recognized when the customer is deemed to have control over the product.

Control is determined based on when the product is shipped or delivered and title passes to the customer.

Revenue is recorded in an amount that reflects the consideration we expect to receive in exchange.

Revenue from the sale of immunoglobulin products is generally recognized when the product reaches the customer’s destination, and is recorded net of distributor fees, estimated rebates, price protection arrangements and customer incentives, including prompt pay discounts, wholesaler chargebacks and other wholesaler fees.

These estimates are based on historical experience and certain other assumptions, and we believe that such estimates are reasonable.

For revenues associated with contract manufacturing and sales of our intermediates, control transfers to the customer and the performance obligation is satisfied when the customer takes possession of the product from the Boca Facility or a third-party warehouse that is utilized by the Company.

Product revenues from the sale of human plasma collected at our plasma collection centers are recognized at the time control of the product has been transferred to the customer, which generally occurs at the time of shipment.

Product revenues are recognized at the time of delivery if we retain control of the product during shipment.

Payments received from customers where the foregoing revenue recognition criteria have not been satisfied are recorded as deferred revenue, which is reflected as a liability in our consolidated balance sheets.

Accounts Receivable

Accounts receivable are reported at realizable value, net of allowances for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded.

We extend credit to our customers based upon an evaluation of each customer's financial condition and credit history.

Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis.

Based on these evaluations, we have concluded that our credit risk is minimal.

Cost of Product Revenue

Cost of product revenue includes costs associated with the manufacture of the Company’s FDA approved products, intermediates and the sale of human source plasma, as well as expenses related to conformance batch production, process development and scientific and technical operations when these operations are attributable to marketed products.

When the activities of these operations are attributable to new products in development, the expenses are classified as research and development expenses.

Costs of production for ASCENIV and BIVIGAM prior to their FDA approval dates of April 1, 2019 and May 9, 2019, respectively, were not capitalized into inventory but were instead expensed as incurred.

As a manufacturer of biological products, we are subject to the risks inherent in biological production, which could include normal course losses and failures inherent in the manufacturing process.

As our biologics production levels increase there may be normal course inventory losses as we ensure product quality and compliance with FDA, state and local regulations, or due to testing results not meeting specifications.

Such losses are charged to cost of product revenue in the period they are incurred.

Stock-Based Compensation

All equity-based payments, including grants of stock options and restricted stock units (“RSUs”) are recognized at their estimated fair value at the date of grant, and compensation expense is recognized on a straight-line basis over the grantee’s requisite vesting period.

During the year ended December 31, 2020, we granted RSUs to members of our Board of Directors and certain members of our management and employees representing an aggregate of 361,000 shares of common stock.

GAAP require difficult, subjective and/or complex judgments about matters that are inherently uncertain and, as a result, actual results could differ

from those estimates.

Due to the estimation processes involved, the following summary of accounting estimates and their application are considered to be critical to understanding our business operations, financial condition and results of

For a description of our significant accounting policies, see Note 2 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Estimates and assumptions used in projecting future liquidity and

capital requirements are described in Note 1 to the Consolidated Financial Statements.

Our gross product revenues are subject to a variety of deductions, which are estimated and recorded in the same period that the revenues are recognized.

These deductions primarily consist of rebates, distribution

fees, chargebacks and sales allowances.

These deductions represent estimates of the related obligations, some of which are contractual in nature and do not require extensive judgment to be exercised by management, while other estimates require

complex or subjective matters of knowledge and judgment when estimating the impact of these revenue deductions on net revenues for a reporting period.

Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business.

However, two of our primary immunoglobulin products, ASCENIV and

BIVIGAM, were only approved for commercial sale by the FDA in 2019, and as such our historical experience with rebates with respect to these products is limited.

If any of our ratios, factors, assessments, experiences or judgments are not

indicative or accurate estimates of our future experience, our results could be materially affected.

Estimates that are most at risk for material adjustment are those associated with U.S.

Medicaid rebates because of the extensive time delay

between the recording of the accrual and its ultimate settlement, an interval that can generally take up to several years or more.

While our results of operations to date have not required any material adjustment due to this risk, the lag time

between when this obligation is initially recorded and ultimately settled could potentially materially impact our revenues and our results of operations in the future.

Stock-Based Compensation and Valuation of Warrants

straight-line basis over the grantee’s requisite vesting period.

For the purpose of valuing stock options granted to our employees, directors and officers, we use the Black-Scholes option pricing model.

We granted options to purchase an aggregate of 1,468,412 and 1,508,000 shares of Common Stock during the years ended December 31, 2020 and 2019, respectively.

The Black-Scholes option valuation model

was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable.

The Company’s employee stock options have characteristics significantly different from those of traded

options, and changes in the underlying Black-Scholes assumptions can materially affect the fair value estimate.

To determine the risk-free interest rate, we utilize the U.S.

Treasury yield curve in effect at the time of the grant with a term consistent with the expected term of our awards.

Treasury yield curve in effect at the time of the grant with a term

consistent with the expected term of our awards.

The expected term of the options granted is in accordance with SEC Staff Accounting Bulletins 107 and 110 and is based on the average between vesting terms and contractual terms.

The expected dividend yield reflects our current and expected future policy for dividends on our Common Stock.

The expected stock price volatility for our stock options was calculated by examining the historical volatility of our Common Stock since our Common Stock became publicly traded in the fourth quarter of 2013.

dividend yield reflects our current and expected future policy for dividends on our Common Stock.

The expected stock price volatility for our stock options was calculated by examining the historical volatility of our Common Stock since our Common

Stock became publicly traded in the fourth quarter of 2013.

We will continue to analyze the expected stock price volatility and expected term assumptions and will adjust our Black-Scholes option pricing assumptions as appropriate.

In accordance with Accounting Standards Update (“ASU”) No.

2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) , we have elected not to establish a forfeiture rate, as stock-based compensation expense related to forfeitures of unvested stock options is fully reversed at the time of forfeiture.

Research and Development Expenses

Our research and development (“R&D”) costs consist of clinical research organization costs, costs related to clinical trials, testing and evaluation of new or alternative products or processes, including the testing and development of a new filling line at one of our third-party fill/finishers for a process that has not been approved by the FDA, studies for potentially extending a product’s approved and labeled expiration dating and other potential label expansions, post-marketing commitment studies for BIVIGAM and ASCENIV, wages, benefits and stock-based compensation for employees directly related to research and development activities and, prior to April 1, 2019, assay development and testing, storage and transportation costs for high-titer plasma used in the manufacture of ASCENIV prior to its approval by the FDA.

All research and development costs are expensed as incurred.

Raw materials inventory consists of various materials purchased from suppliers, including normal source plasma, that are used in the production of our products.

Work-in-process and finished goods inventories reflect the cost of raw materials as well as costs for direct and indirect labor, primarily salaries, wages and benefits for applicable employees, as well as an allocation of overhead costs related to the Boca Facility including utilities, property taxes, general repairs and maintenance, consumable supplies and depreciation.

The allocation of Boca Facility overhead to inventory is generally based upon the estimated square footage of the Boca Facility that is used in the production of our products relative to the total square footage of the facility.

Inventories, including plasma intended for resale and plasma intended for internal use in the Company’s manufacturing, commercialization or research and development activities, are carried at the lower of cost or net realizable value determined by the first-in, first-out method.

Net realizable value is generally determined based upon the consideration we expect to receive when the inventory is sold, less costs to deliver the inventory to the recipient.

The estimates for net realizable value of inventory are based on contractual terms or upon historical experience and certain other assumptions which we believe are reasonable.

Inventory is periodically reviewed to ensure that its carrying value does not exceed its net realizable value, and adjustments are recorded to write down such inventory, with a corresponding charge to cost of product revenue, when the carrying value or historical cost exceeds its estimated net realizable value.

Any changes in

the foregoing Black-Scholes assumptions, or if we were to elect to utilize an alternative method for valuing stock options granted to employees, directors and officers, could potentially impact our stock-based compensation expense and our results

of operations.

We also use the Black-Scholes option valuation model for the purpose of estimating the fair value of warrants we issue from time to time in connection with the issuance of notes payable.

Changes in our Black-Scholes

assumptions, or if we were to utilize an alternative method for valuing warrants issued to our lenders, could impact our interest expense and results of operations.

Impairment of Long-Lived Assets

We assess the recoverability of our long-lived assets, which include property and equipment and definite-lived intangible assets, whenever significant events or changes in circumstances indicate impairment may have occurred.

If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s carrying value is recoverable.

Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.

Any resulting impairment is

recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.

For the years ended December 31, 2021 and 2020, we determined that there was no impairment of our long-lived assets.

Examples of events or circumstances that may be indicative of impairment that would require the use of significant judgment by management include:

A significant adverse change in legal factors or in the business climate that could affect the value of the asset.

Significant and continued cash flow losses.

A significant adverse change in the extent or manner in which an asset is used, such as a restriction imposed by the FDA or other regulatory authorities that could affect our ability to manufacture our products using a particular

An expectation of losses or reduced profits associated with an asset.

This could result, for example, from the introduction of a competitor’s product that impacts projected revenue growth, or a change in the acceptance of a product

by patients, physicians and payers that results in an inability to sustain projected product revenues.

Goodwill is not amortized but is assessed for impairment on an annual basis or more frequently if impairment indicators exist.

We have the option to perform a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of the reporting unit associated with the goodwill is less than its carrying amount, including goodwill and other intangible assets.

If we conclude that this is the case, then we must perform a goodwill impairment test by comparing the fair value of the reporting unit to its carrying value.

An impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value, with the impairment loss recognized not to exceed the total amount of goodwill allocated to that reporting unit.

We did not recognize any impairment charges related to goodwill for the years ended December 31, 2020 and 2019.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires financial assets to be presented at the net amount expected to be collected, with an allowance for credit losses to be deducted from the amortized cost basis of the financial asset such that the net carrying value of the asset is presented as the amount expected to be collected.

Under ASU 2016-13, the entity’s statement of operations is required to reflect the measurement of credit losses for newly recognized financial assets, as well as expected increases or decreases in expected credit losses that have taken place during the period.

For public business entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019.

We adopted ASU No.

2016-13 on January 1, 2020, and the adoption of this update did not have a significant impact on our consolidated financial statements.

In July 2017, the FASB issued ASU No.

2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) ” (“ASU 2017-11”).

ASU 2017-11 changed the classification analysis of certain equity-linked financial instruments (or embedded features within such instruments) with down round features.

When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock.

The amendments also clarify existing disclosure requirements for equity-classified instruments.

As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature.

For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with ASC 260 to recognize the effect of the down round feature when it is triggered.

That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS.

In addition, convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features in ASC 470-20, “ Debt—Debt with Conversion and Other Options.

” ASU 2017-11 became effective for us on January 1, 2019, and this update did not have a significant impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet.

The guidance became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.

We adopted ASU 2016-02 on January 1, 2019 using the option to recognize the cumulative-effect adjustment, if any, as of the date of application, which was also January 1, 2019.

As a result, there was no restatement of comparative periods.

We recognized right-to-use assets of approximately $1.4 million and corresponding lease liabilities of approximately $1.6 million at the date of adoption.

We also elected the “package of practical expedients,” which permits us to not reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

In addition, we elected the short-term lease recognition exemption for all or embedded leases that qualify.

The testing of goodwill for impairment requires us to determine whether or not the fair

value of the reporting unit associated with the goodwill is less than its carrying amount, including goodwill and other intangible assets.

An impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value,

with the impairment loss recognized not to exceed the total amount of goodwill allocated to that reporting unit.

In order to determine the fair value of the reporting unit, we utilize the fair value of the Company as a whole, as determined by its

market capitalization.

Determination of the fair value and carrying value of each reporting unit, relative to the fair value of the Company, requires management to employ certain estimates, assumptions and judgment, which we believe are

However, any changes to these estimates and assumptions could impact our determination of whether or not our goodwill is impaired.

We did not recognize any impairment charges related to goodwill for the years ended December 31, 2021

Deferred Tax Assets

We have historically maintained a full valuation allowance against all of our net deferred tax assets, and as a result have recorded no income tax benefit in the accompanying consolidated financial statements.

valuation allowance reflects our assessment of whether it is more likely than not that we will generate sufficient taxable income in the future to be able to utilize our deferred tax assets.

In determining whether a valuation allowance is

warranted, we evaluate factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies.

We consider all positive and negative evidence to estimate if sufficient future taxable income will be

generated to realize our deferred tax assets.

We consider cumulative losses in recent years to be a significant type of negative evidence, and based on our history of losses, at this time we have not included future projected taxable income as a

source of income to recognize our deferred tax assets.

Year Ended December 31, 2021 Compared to December 31, 2020

1 unchanged sentence

Year Ended December 31,

Increase (Decrease)

Cost of product revenue (exclusive of amortization expense shown below)

(19,071,643 )

(10,155,155 )

Gross profit (loss)

Research and development expenses

3 unchanged sentences

Loss from operations

(64,914,877 )

(41,424,327 )

(23,490,550 )

Interest expense

(11,985,066 )

Gain (loss) on extinguishment of debt

Gain on transfer of plasma center assets

(11,527,421 )

Other income, net

$ (75,748,548 )

$ (48,279,317 )

$ (27,469,231 )

Gain on extinguishment of debt

Other (expense) income, net

We recorded total revenues of $80.9 million during the year ended December 31, 2021, as compared to $42.2 million during the year ended December 31, 2020, an increase of $38.7 million, or approximately 92%.

The increase is mainly due to increased sales of our immunoglobulin products generated by our Boca Facility manufacturing operations in 2020 totaling $14.5 million, partially offset by a $1.6 million decrease in plasma revenues generated by our plasma collection centers business segment.

Our revenues for the year ended December 31, 2020 were greater than the prior year as a result of our continued commercial scale-up for BIVIGAM and ASCENIV following these products’ FDA approvals on May 9, 2019 and April 1, 2019, respectively, as well as from the manufacturing and supply agreement we entered into in January 2020 to produce and sell intermediate fractions to a certain customer.

increase is mainly due to increased sales of our immunoglobulin products and intermediate fractions generated by our Boca Facility manufacturing operations in 2021 totaling $38.1 million as we conclude our second full year of commercial sales of

BIVIGAM and ASCENIV.

We attribute this increase in revenue, which reflects sales volume increases across our entire portfolio of IVIG products, to an expansion of our customer base in 2021 and to increased physician, payer and patient acceptance

of both BIVIGAM and ASCENIV.

We also experienced a $0.5 million increase in plasma revenues generated by our plasma collection centers business segment.

Cost of Product Revenue

Cost of product revenue was $79.8 million for the year ended December 31, 2021, as compared to $61.3 million for the year ended December 31, 2020, an increase of $18.5 million.

This increase reflects non-recurring production charges of $7.5 million for the manufacture of BIVIGAM conformance lots at an increased plasma pool production scale in connection with our planned capacity expansion and other production initiatives and investments at the Boca Facility.

Cost of product revenue for the year ended December 31, 2020 also reflects increases in product revenue costs of approximately $22.5 million related to the increase in revenues, partially offset by a $7.4 million reduction in unabsorbed manufacturing expenses resulting from increased production throughput at the Boca Facility.

This increase reflects higher product

revenue costs pertaining to the Company’s immunoglobulin product sales during the year of approximately $23.6 million due to higher sales volume, an increase in non-inventoriable manufacturing costs of approximately $1.9 million related to IVIG

production at our Boca Facility operations, largely due to higher prices, and to increased product revenue costs pertaining to plasma sales of $0.3 million.

These amounts were partially offset by non-recurring production charges of $7.5 million

in 2020 for the manufacture of BIVIGAM conformance lots at an increased plasma pool production scale in connection with our planned capacity expansion and other production initiatives and investments at the Boca Facility.

Research and Development Expenses

R&D expenses totaled $5.9 million for the year ended December 31, 2020, as compared to $2.3 million for the year ended December 31, 2019.

The increase is primarily due to $1.4 million of costs incurred during 2020 for the testing and development of a new filling line at one of our third-party fill/finishers for a process that has not been approved by the FDA, a $1.0 million increase in expenses associated with clinical studies, mainly BIVIGAM post-marketing commitments, $0.4 million of costs incurred during 2020 for a study we commenced to potentially extend ASCENIV’s approved and labeled expiration dating, $0.2 million of expenses in 2020 related to third-party assay development and a $0.2 million non-recurring expense for assistance with a third-party clinical research project.

Research and development expenses (“R&D”) totaled $3.6 million for the year ended December 31, 2021, as compared to $5.9 million for the year ended December 31, 2020.

The decrease is primarily due to several

non-recurring projects in 2020 aggregating to $2.2 million for which there are no comparable amounts in 2021, consisting of (i) $1.4 million for the testing and development of a new filling line at one of our third-party fill/finishers for a

process that had not been approved by the FDA, (ii) $0.4 million for a study we performed to potentially extend ASCENIV’s approved and labeled expiration dating, (iii) $0.2 million related to third-party assay

development and (iv) $0.2 million for assistance with a third-party clinical research project.

In addition, we experienced lower compensation expense (including stock-based compensation) related to R&D expenses of $1.1 million in 2021,

mainly due to the resignation of our former Chief Medical and Chief Scientific Officer.

These amounts were partially offset by $1.0 million of increased expenses associated with post-marketing commitment clinical studies for ASCENIV and BIVIGAM

Plasma Center Operating Expenses

Plasma center operating expenses were $12.3 million for the year ended December 31, 2021, as compared to $4.2 million for the year ended December 31, 2020.

Plasma center operating expenses consist of certain general and administrative plasma center costs, including rent, maintenance, utilities, compensation and benefits for center and administrative staff, advertising and promotion expenses and computer software fees related to donor collections.

The increase in plasma center operating expenses is attributable to having additional plasma centers in operation in 2020, as well as higher employee compensation costs, donor fees, depreciation and rent expense, all related to plasma center expansion activities that took place in 2020.

During the year ended December 31, 2019, we had one plasma collection facility in operation.

During the year ended December 31, 2020, we opened two additional plasma collection centers and commenced construction and development activities on four additional plasma collection facilities.

We expect additional increases in our plasma center operating expenses in 2021 as we continue our expansion activities in this business segment.

Plasma center operating expenses consist of certain general

and administrative plasma center costs, including lease expenses, maintenance, utilities, compensation and benefits for center and administrative staff, advertising and promotion expenses and computer software fees related to donor collections.

At December 31, 2020 we had three plasma collection centers in operation.

At December 31, 2021, we had six plasma collection centers in operation.

In addition, for those plasma collection centers that are in

construction or development but not yet operational, we still need to incur staffing, training, travel and other costs during the build-out period so that these facilities can be operational on the day they open.

The increase in plasma center

operating expenses in 2021 is mainly attributable to increases in employee compensation costs of $4.8 million, donor fees of $2.5 million, softgoods and supplies of $0.8 million, depreciation expense of $0.7 million, rent expense of $0.7 million,

plasma testing expenses of $0.3 million, travel expense of $0.3 million and advertising expenses of $0.2 million.

These amounts were partially offset by an increase in plasma collections which resulted in a reduction in our plasma center

operating expenses by approximately $3.0 million.

We expect additional increases in our plasma center operating expenses in 2022 and beyond as we intend to have 10 plasma collection centers in operation and approved by the FDA by the end of 2023.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $35.1 million for the year ended December 31, 2020, an increase of $9.1 million from the year ended December 31, 2019.

The increase was mainly due to higher employee compensation expenses of $5.1 million related to staffing increases in support of our commercialization efforts for BIVIGAM and ASCENIV as well as the overall growth in the size and scope of our operations.

SG&A expenses were also impacted in 2020 by increased insurance expense of $1.6 million and marketing consulting fees incurred in connection with our ASCENIV commercialization efforts of $3.1 million, partially offset by lower travel expenses and information technology consulting fees.

We expect our SG&A expenses to continue to increase in 2021 as we continue to execute on the various facets of our business plan (see Liquidity and Capital Resources).

Selling, general and administrative expenses (“SG&A”) were $42.9 million for the year ended December 31, 2021, an increase of $7.8 million from the year ended December 31, 2020.

As we continued to support the

increase in the size and scope of our Boca Facility manufacturing and commercial operations in 2021, we experienced increases in employee compensation and related expenses, including travel, relocation and recruiting, of $6.7 million.

experienced increased insurance expense of $1.3 million in 2021, recognized an expense and corresponding liability in the amount of $0.8 million related to the separation and transition agreement with our former Chief Medical and Chief Scientific

Officer and incurred increased expenses associated with the commercialization of our immunoglobulin portfolio of $0.7 million.

These amounts were partially offset by a reduction in market intelligence fees of approximately $2.1 million for a

one-time project related to ASCENIV that concluded in early 2021.

Amortization of Intangibles

Amortization expense for intangible assets acquired in the Biotest Transaction was $0.7 million and $0.8 million for the years ended December 31, 2020 and 2019, respectively.

Amortization expense for intangible assets acquired in the Biotest Transaction was $0.7 million for the years ended December 31, 2021 and 2020.

Loss from Operations

Our operating loss was $58.4 million for the year ended December 31, 2021, as compared to $64.9 million for the year ended December 31, 2020.

The increase was mainly due to the increase in cost of product revenue and other operating expenses, partially offset by the increase in revenues.

The decrease in operating loss was mainly due to the improved gross

profit/loss for the year ended December 31, 2021 of $20.2 million compared with the same period of a year ago and the $2.3 million of lower R&D expenses, largely offset by the increases in plasma center operating expenses and SG&A.

improvement in gross profit/loss is mainly due to the 92% increase in revenues in 2021, as well as to the absence of the $7.5 million of non-recurring production charges we incurred during 2020.

We expect further improvements to our gross margins

in 2022 as the efficiencies we anticipate from our expanded plasma pool production scale process that was approved by the FDA in April of 2021 and our in-house fill-finish capabilities that were approved in September of 2021 begin to take effect,

subject to the current rate of inflation and price increases we may receive from time to time from our suppliers.

Interest Expense

Interest expense was $13.1 million for the year ended December 31, 2021, as compared to $12.0 million for the year ended December 31, 2020.

The increase reflects a higher average debt principal balance carried in 2020 as compared to 2019 due to the additional draws on our senior credit facility in May of 2019 and March of 2020 (see “Liquidity and Capital Resources”), which resulted in additional debt principal of $42.5 million.

increase reflects the additional interest expense associated with the Perceptive Tranche III Loan which we drew down on March 20, 2020, as well as the higher interest on the $15 million note formerly due to Biotest that we refinanced in

December 2020, which increased the interest rate on this indebtedness from 6% per annum to 11% per annum (see “Liquidity and Capital Resources”).

Interest expense also includes the amortization of debt discount in the amount of $1.9 million and

$1.8 million for the years ended December 31, 2021 and 2020, respectively.

In connection with the refinancing of our senior credit facility on March 23, 2022, we expect our annual interest expense, excluding amortization of debt discount, to

increase from approximately $11.2 million per year to a range between approximately $16.0 million and $19.0 million per year, depending on whether and when we access the second tranche of this facility in the amount of $25.0 million (see

“Liquidity and Capital Resources”) .

Gain/Loss on Extinguishment of Debt

In December of 2020, we refinanced our subordinated note payable to Biotest with an additional draw on our senior credit facility.

As a result of this transaction and the payoff of the Biotest note, we recorded a gain on the extinguishment of debt in the amount of $1.0 million (see Note 8 to the Consolidated Financial Statements).

In connection with the refinancing of our senior credit facility in February of 2019, we incurred a loss on the extinguishment of debt for the retirement of our previously existing credit facility, consisting of a $6.5 million prepayment penalty, and the write-off of $3.5 million of unamortized debt discount related to the previous credit facility.

Gain on Transfer of Plasma Center Assets

As part of the purchase price for the Biotest Assets, we agreed to transfer two of our plasma collection centers to BPC effective January 1, 2019.

We had estimated the combined fair value of the two facilities to be $12.6 million, and we recorded a liability in our financial statements for this amount as of the date of the Biotest Transaction.

On January 1, 2019, the two plasma collection facilities were transferred to BPC and we recorded a gain on this transfer in the amount of $11.5 million, which reflects the derecognition of the obligation to transfer ownership of the two facilities net of the carrying value of the assets associated with these facilities, primarily property and equipment and inventory, in the amount of $1.1 million.

On December 8, 2020, we refinanced our $15 million subordinated note payable to Biotest with an amendment to our senior credit facility and the corresponding Tranche IV draw on that facility.

As a result of this

transaction and the payoff of the Biotest note, we recorded a gain on the extinguishment of debt in the amount of $1.0 million (see Note 7 to the Consolidated Financial Statements).

Our net loss was $71.6 million for the year ended December 31, 2021, as compared to $75.7 million for the year ended December 31, 2020.

The increase in net loss of approximately $27.5 million was mainly due to the increase in operating loss and the higher interest expense.

The decrease in net loss of $4.1 million was mainly due to the decrease in

operating loss, partially offset by the higher interest expense in 2021 and the gain on extinguishment of debt in 2020.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2020, we had working capital of $133.8 million, including cash and cash equivalents of $55.9 million, and stockholders’ equity of $88.2 million, as compared to working capital of $71.8 million, including cash and cash equivalents of $26.8 million, and stockholders’ equity of $26.2 million as of December 31, 2019.

We have incurred an accumulated deficit of $340.5 million since inception, had negative cash flows from operations of $102.0 million and $76.2 million for the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2021, we had working capital of $178.4 million, primarily consisting of $124.7 million of inventory, cash and cash equivalents of $51.1 million and accounts receivable of $28.6 million, partially

offset by $29.6 million of accounts payable and accrued expenses, as compared to working capital of $133.8 million, mainly comprised of $81.5 million of inventory, cash and cash equivalents of $55.9 million and accounts receivable of $13.2

million, partially offset by accounts payable and accrued expenses of $19.4 million, as of December 31, 2020.

We have incurred an accumulated deficit of $412.1 million since inception and had negative cash flows from operations of $112.4 million

and $102.0 million for the years ended December 31, 2021 and 2020, respectively.

We have funded our operations over the past few years primarily from the sale of our equity and debt securities.

We expect to continue to spend substantial amounts on procurement of raw material plasma and other raw materials necessary to scale up our manufacturing operations, commercial product launches, capacity expansion at the Boca Facility, building additional plasma collection facilities, product development, quality assurance, regulatory affairs and conducting clinical trials for our product candidates and purchasing clinical trial materials, some of which may be required by the FDA.

In addition, our end-to-end production cycle from procurement of raw materials to commercial release of finished product can take between seven and 12 months or potentially longer, requiring substantial investments in raw material plasma and other manufacturing materials.

We expect that we will not be able to generate a sufficient amount of product revenue to achieve profitability until the beginning of 2024 and, as a result, we expect that we will need to continue to finance our operations through additional equity or debt financings or through corporate collaboration and licensing arrangements.

Based upon our current projected revenues, the remaining proceeds we expect to receive from the sale of common stock pursuant to the Sale Agreement (as amended to date) discussed below and our projected expenditures, including capital expenditures and continued implementation of our commercialization and expansion activities, we currently believe that our cash, cash equivalents, projected revenue and accounts receivable will be sufficient to fund our operations, as currently conducted, into the fourth quarter of 2021.

In order to have sufficient cash to fund our operations thereafter, we will need to raise additional capital before the end of the fourth quarter of 2021.

These estimates and timeframes may change based upon several factors, including the success of our commercial manufacturing ramp-up activities, the acceptability and reimbursement of BIVIGAM and ASCENIV by physicians, patients or payers, and the various financing options that may be available to us.

We currently have no firm commitments for additional financing, and there can be no assurances that we will be able to secure additional financing on terms that are acceptable to us, or at all.

Furthermore, if our assumptions underlying our estimated expenses and revenues are incorrect, we may have to raise additional capital sooner than currently anticipated.

Our long-term liquidity depends upon our ability to raise additional capital, fund capacity expansion and commercial programs and generate sufficient revenues from our products, several of which have only recently achieved commercial status, to cover our operating expenses and meet our obligations on a timely basis.

The COVID-19 pandemic has negatively affected the global economy and created significant volatility and disruption to the financial markets.

Failure to secure any necessary financing in a timely manner and on commercially reasonable terms could have a material adverse effect on our business plan and financial performance and we could be forced to delay or discontinue our capacity expansion, commercialization, product development or clinical trial activities, delay or discontinue the approval efforts for any of our product candidates, or potentially cease operations.

In addition, we could also be forced to reduce or forgo sales and marketing efforts and forgo attractive business opportunities.

Due to numerous risks and uncertainties associated with the COVID-19 pandemic, FDA reviews, inspections and approvals related to our products, patient/payer acceptance of our products, ongoing compliance and maintenance requirements and capacity expansion efforts at the Boca Facility, we are unable to estimate with certainty the amounts of increased capital outlays and operating expenditures required to fund our commercialization and other development activities.

Our current estimates may be subject to change as circumstances regarding our business requirements evolve and are also subject to the effect of potential new government orders, policies and procedures that we must comply with which are outside of our control.

As such, these factors raise substantial doubt about our ability to continue as a going concern.

We may decide to raise capital through public or private equity offerings or debt financings, or obtain a bank credit facility or enter into corporate collaboration and licensing arrangements.

The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders and, in such event, the market value of our common stock may decline.

The incurrence of additional indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations or other financing alternatives.

In addition, we are exploring additional contract manufacturing arrangements and other business development opportunities, which may provide additional liquidity to us.

On August 5, 2020, we entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC, as agent (“Jefferies”), pursuant to which we could offer and sell, from time to time, at our option, through or to Jefferies, up to an aggregate of $50 million of shares of our common stock.

On November 5, 2020, we and Jefferies entered into an amendment to the Sale Agreement (as amended, the “Amended Sale Agreement”) to provide for an increase in the aggregate offering amount under the Sale Agreement, such that as of November 5, 2020, we may offer and sell shares having an additional aggregate offering price of up to $20 million.

On February 3, 2021, we entered into an additional amendment to the Sale Agreement to provide for an additional increase in the aggregate offering amount under the Sale Agreement to allow us to sell shares having an aggregate offering price of up to $35.4 million.

For the year ended December 31, 2020, we sold 18,537,907 shares of our common stock under the Sale Agreement and received net proceeds in the amount of $42.5 million.

Between January 1, 2021 and March 16, 2021, we sold an additional 16,311,084 shares of our common stock under the Sale Agreement and received net proceeds in the amount of $38.3 million, which leaves a remaining gross balance that can be raised under the Sale Agreement of $22.7 million.

The net proceeds from this offering are being used for general corporate purposes, which may include (i) the procurement of raw materials for the manufacturing of BIVIGAM and ASCENIV;

(ii) supporting the ongoing commercial sales of our IVIG products;

(iii) expanding the manufacturing capacity of our Boca Facility, including supply chain functions, and enhancing the robustness of our supply chain oversight;

(iv) expanding our plasma collection facility network;

and (v) research and development and business development opportunities.

On February 11, 2019 (the “Perceptive Closing Date”), we and all of our subsidiaries entered into a Credit Agreement and Guaranty (the “Perceptive Credit Agreement”) with Perceptive Credit Holdings II, LP, as the lender and administrative agent (“Perceptive”).

The Perceptive Credit Agreement, as amended, provides for a senior secured term loan facility in a principal amount of $100.0 million (the “Perceptive Credit Facility”), comprised of (i) a term loan made on the Perceptive Closing Date in the principal amount of $45.0 million, as evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche I Note”) in favor of Perceptive on the Perceptive Closing Date (the “Perceptive Tranche I Loan”), (ii) a term loan in the principal amount of $27.5 million (the “Perceptive Tranche II Loan”) evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche II Note”) in favor of Perceptive on May 3, 2019, (iii) a term loan in the principal amount of $12.5 million evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche III Note”) in favor of Perceptive on March 20, 2020 (the “Perceptive Tranche III Loan”);

and (iv) a term loan in the principal amount of $15 million evidenced by our issuance of a promissory note in favor of Perceptive on December 8, 2020 (the “Perceptive Tranche IV Loan”, and together with the Perceptive Tranche I Loan, the Perceptive Tranche II Loan and the Perceptive Tranche III Loan, the “Perceptive Loans”).

The Perceptive Tranche III Loan is the result of an amendment to the Perceptive Credit Agreement that the Company and Perceptive entered into on May 3, 2019 (the “First Perceptive Amendment”), and the Perceptive Tranche III Loan became available to the Company upon the approval of BIVIGAM on May 9, 2019.

The Perceptive Tranche IV Loan is the result of an amendment to the Perceptive Credit Facility entered into on December 8, 2020 (the “Second Perceptive Amendment”), which also extended the maturity date of the Perceptive Credit Facility to March 1, 2024 (the “Maturity Date”), subject to acceleration pursuant to the Perceptive Credit Agreement, including upon an Event of Default (as defined in the Perceptive Credit Agreement).

On the Perceptive Closing Date, we used $30.0 million of the Perceptive Tranche I Loan to terminate and pay in full all of the outstanding obligations under its previously existing credit agreement with Marathon Healthcare Finance Fund, L.P.

(“Marathon”) (the “Marathon Credit Facility”).

We also used proceeds from the Perceptive Tranche I Loan to:

(i) pay a deferred facility fee to Marathon in the amount of $2.8 million, (ii) pay a prepayment penalty to Marathon in the amount of $6.5 million, (iii) pay outstanding accrued interest to Marathon in the amount of $0.7 million, and (iv) pay certain fees and expenses incurred in connection with the Perceptive Credit Facility of approximately $1.5 million.

In addition, Marathon released $4.0 million of cash to us that was held in a debt service reserve account per the terms of the Marathon Credit Facility.

In connection with the First Perceptive Amendment, we paid an additional facility fee to Perceptive in the amount of $0.1 million on May 3, 2019.

In connection with the Second Perceptive Amendment, we paid a facility fee to Perceptive in the amount of $0.8 million.

The proceeds from the Perceptive Tranche IV Loan were used to retire the $15.0 million subordinated note we had payable to Biotest, which had a maturity date of June 17, 2022.

Borrowings under the Perceptive Credit Agreement bear interest at a rate per annum equal to 7.5% plus the greater of (i) one-month LIBOR and (ii) 3.5%;

provided, however, that upon, and during the continuance of, an Event of Default, the interest rate will automatically increase by an additional 400 basis points.

Accrued interest of approximately $0.9 million per month is payable to Perceptive on the last day of each month during the term of the Perceptive Credit Facility.

The rate of interest in effect as of the Perceptive Closing Date and at December 31, 2020 was 11.0%.

On the Maturity Date, we are required to pay Perceptive the entire outstanding principal amount underlying the Perceptive Loans and any accrued and unpaid interest thereon.

There are no scheduled principal payments on the Perceptive Loans prior to the Maturity Date.

We may prepay outstanding principal on the Perceptive Loans at any time and from time to time upon three business days’ prior written notice, subject to the payment to Perceptive of (A) any accrued but unpaid interest on the prepaid principal amount plus (B) a redemption premium amount equal to (i) 5.0% of the prepaid principal amount, if prepaid on or prior to December 31, 2021, (ii) 2.0% of the prepaid principal amount, if prepaid after December 31, 2021 and on or prior to December 31, 2022, (iii) 4.0% of the prepaid principal amount, if prepaid after December 31, 2022 and on or prior to December 31, 2023, and (iv) 5.0% of the prepaid principal amount, if prepaid any time thereafter and prior to the Maturity Date.

All of our obligations under the Perceptive Credit Agreement are secured by a first-priority lien and security interest in substantially all of our tangible and intangible assets, including intellectual property and all of the equity interests in our subsidiaries.

The Perceptive Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings.

The negative covenants restrict or limit our ability that of our subsidiaries to, among other things and subject to certain exceptions contained in the Perceptive Credit Agreement, incur new indebtedness;

Our material cash requirements are primarily

comprised of:

The procurement of raw material plasma and other raw materials necessary to maintain and scale up our manufacturing operations

Employee compensation and benefits

Capital expenditures for the building of additional plasma collection facilities and for equipment upgrades and capacity expansion at the Boca Facility

Plasma donor fees and plasma center supplies

Interest on our debt

Marketing programs and continued commercialization efforts

Boca Facility maintenance, repairs and supplies;

Conducting post-marketing clinical trials for our FDA-approved products.

other manufacturing materials.

We expect that we will not be able to generate a sufficient amount of product revenue to achieve profitability until the beginning of 2024.

We currently anticipate, based upon our projected revenue and expenditures,

that our current cash, cash equivalents and accounts receivable, including the proceeds received and expected to be received from the refinancing of our senior credit facility as discussed below, along with the remaining amounts available under

the distribution agreement for the sale of our common stock also discussed below, will be sufficient to fund our operations, as currently conducted, into the first quarter of 2024, at which time we believe we will begin to generate positive cash

flow from operations.

This time frame may change based several factors, including the success of our commercial sales of our products and the acceptability of our immune globulin products by physicians, patients or payers, and whether or not the

assumptions underlying our projected revenues and expenses are correct.

If we are unable to raise additional capital if needed, including due to widespread liquidity constraints or significant market instability that could result from the

COVID-19 pandemic, inflationary pressures or other factors beyond our control, we may have to delay, curtail or eliminate some of our commercialization efforts or product development activities.

We are also continuing to evaluate a variety of

strategic and financing alternatives through our ongoing engagement with Morgan Stanley as a financial advisor.

On March 23, 2022, (the “Hayfin Closing Date”) we and all of our subsidiaries entered into a Credit and Guaranty Agreement (the “Hayfin Credit

Agreement”) with Hayfin Services LLP (“Hayfin”).

T he Hayfin Credit Agreement provides for a senior secured term loan facility in a principal amount of up to

$175.0 million (the “Hayfin Credit Facility”), composed of (i) a term loan made on the Hayfin Closing Date in the principal amount of $150.0 million (the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount

of $25.0 million (the “Hayfin Delayed Draw Loan” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans”).

The obligation of the lenders to make the Hayfin Delayed Draw Loan expires on March 22, 2023, and is subject to the

satisfaction of certain conditions, including, but not limited to, our meeting certain 12-month revenue targets as set forth in the Hayfin Credit Agreement.

The Hayfin Credit Facility has a maturity date of March 23, 2027 (the “Hayfin

Maturity Date”), subject to acceleration pursuant to the Hayfin Credit Agreement, including upon an Event of Default (as defined in the Hayfin Credit Agreement).

On the Hayfin Closing Date, we used $100.0 million of the Hayfin Closing Date Loan to terminate and pay in full all of the

outstanding obligations under our previous senior credit facility with Perceptive (see Note 7 to the Consolidated Financial Statements).

We also used $2.0 million of the Hayfin Closing Date Loan proceeds to pay a redemption premium to

Perceptive and used approximately $0.3 million of the Hayfin Closing Date Loan proceeds to pay certain fees and expenses incurred in connection with this transaction.

In addition, a $1.8 million upfront fee payable to Hayfin was paid “in kind”

and was added to the outstanding principal balance in accordance with the terms of the Hayfin Credit Agreement.

The remainder of the proceeds received or to be received from the Hayfin Loans will be used for working capital and other general

corporate purposes.

Borrowings under the Hayfin Credit Agreement will bear interest at our election, at either (a) a base rate (equal to the

highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate in effect on such day plus 0.50% and (iii) the adjusted Term SOFR for a one-month tenor

in effect on such day plus 1.00%) plus an applicable margin of 8.50% or (b) adjusted Term SOFR for either a one-month or three-month tenor, as elected by us, and subject to a floor of 1.25%, plus an applicable margin of 9.5% (the “Applicable

provided, however, that upon, and during the continuance of, an Event of Default, the Applicable Margin shall increase by an additional 3% per annum.

We will also pay “in kind” a portion of the interest on the Hayfin Loans for each

monthly or quarterly interest period in an amount equal to 2.5% per annum.

Such interest paid “in kind” will reduce our quarterly cash interest obligation by approximately $1.0 million and will be added to the principal amount of the

outstanding debt under the Hayfin Credit Facility.

On the Hayfin Closing Date, our interest rate was 10.75%.

On the last day of each calendar month or quarter during the term of the Hayfin Credit Facility, we are required to pay accrued

interest to Hayfin of approximately $1.0 million per month or $3.1 million per quarter, after giving effect to the “in kind” interest of 2.5% per annum, but without giving effect to the Hayfin Delayed Draw Loan.

On the Hayfin Maturity Date, we will pay Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any

accrued and unpaid interest thereon, as well as an exit fee of 1.0% of the outstanding principal amount being paid.

Prior to the Hayfin Maturity Date, there will be no scheduled principal payments on the Hayfin Loans.

We may prepay outstanding

principal on the Hayfin Loans at any time and from time to time upon five business days’ prior written notice, subject to the payment to Hayfin of, (A) any accrued but unpaid interest on the prepaid principal amount plus (B) an early prepayment

fee in the amount equal to (i) 7.0% of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Hayfin Closing Date, (ii) 3.0% of the prepaid principal amount, if prepaid after the first anniversary of the Hayfin

Closing Date and on or prior to the second anniversary of the Hayfin Closing Date, or (iii) 1.0% of the prepaid principal amount, if prepaid after the second anniversary of the Hayfin Closing Date and on or prior to the third anniversary of the

Hayfin Closing Date.

In addition, for any prepayments of principal or payment of principal on the Hayfin Maturity Date, we are required to pay an exit fee of 1.0% of the amount of principal being paid.

All of our obligations under the Hayfin Credit Agreement are secured by a first-priority lien and security interest in

substantially all of our tangible and intangible assets, including intellectual property and all of the equity interests in our subsidiaries.

The Hayfin Credit Agreement contains certain representations and warranties, affirmative covenants,

negative covenants and conditions that are customarily required for similar financings.

The negative covenants restrict or limit our ability and the ability of our subsidiaries to, among other things and subject to certain exceptions contained

in the Hayfin Credit Agreement, incur new indebtedness;

create liens on assets;

engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to our or our subsidiaries’ business activities;

make certain Investments or Restricted Payments (each as defined in the Perceptive Credit Agreement);

Investments or Restricted Payments (each as defined in the Hayfin Credit Agreement);

change our fiscal year;

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engage in certain affiliate transactions;

or enter into, amend or terminate any other agreements that have the impact of restricting our ability to make loan repayments under the Perceptive Credit Agreement.

In addition, we must (i) at all times prior to the Maturity Date maintain a minimum cash balance of $3.0 million;

and (ii) as of the last day of each fiscal quarter commencing with the fiscal quarter ended June 30, 2019, report revenues for the trailing 12-month period that exceed the amounts set forth in the Perceptive Credit Agreement, which range from $31.2 million for the fiscal quarter ended March 31, 2021 to $55.0 million for the fiscal quarter ending December 31, 2021.

At December 31, 2020, we were in compliance with all of the covenants contained in the Perceptive Credit Agreement.

In February 2020, we completed an underwritten public offering of 27,025,000 shares of our common stock and received net proceeds, after underwriting discounts and other expenses associated with the offering, of approximately $88.7 million.

or enter into, amend or terminate any other

agreements that have the impact of restricting our ability to make loan repayments under the Hayfin Credit Agreement.

In addition, we are required (i) at all times prior to the Maturity Date to maintain a minimum cash balance of $6.0 million;

and (ii) as of the last day of each fiscal quarter commencing with the fiscal quarter ending June 30, 2022, report IVIG product and related revenues for the trailing 12-month period that exceed the amounts set forth in the Hayfin Credit

Agreement, which range from $75.0 million for the fiscal quarter ending June 30, 2022 to $250.0 million for the fiscal quarter ending December 31, 2026 and each fiscal quarter thereafter.

On October 25, 2021, we completed an underwritten public offering whereby we issued 57.5 million shares of our common stock and received gross proceeds of $57.5 million.

Net proceeds, after underwriting discounts and

expenses associated with the offering, were approximately $53.8 million, and are being used (i) to advance the commercial sales of our FDA approved products through the procurement of raw materials for the

manufacturing of BIVIGAM and ASCENIV;

(ii) to expand our plasma collection facility network;

(iii) to scale up the manufacturing capacity of the Boca Facility and make continuous improvements in order to adhere to cGMP compliance;

explore business development opportunities;

and (v) for general corporate purposes and other capital expenditures.

On September 3, 2021, we entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which we may offer and sell, from time to

time, at our option, through or to the Agent, up to an aggregate of $50 million of shares of our common stock (the “Distribution Agreement”).

We currently intend to use any net proceeds from the sale of our common stock under the Distribution

Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, funding expansion of plasma collection centers, working capital, capital

expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities.

During the year ended December 31, 2021, we issued 5,540,831 shares of our common stock under the

Distribution Agreement and received net proceeds of $6.9 million.

We currently have approximately $42.8 million of shares available to sell under the Distribution Agreement.

On August 5, 2020, we entered into an open market sale agreement (as amended from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which we could offer and sell, from time to time, at

our option, through or to Jefferies, up to an aggregate of $50 million of shares of our common stock.

On November 5, 2020 and February 3, 2021, we and Jefferies amended the Sale Agreement to provide for increases in the aggregate offering amount

under the Sale Agreement such that we could sell shares having an aggregate offering price of up to $105.4 million under the Sale Agreement, as amended.

For the year ended December 31, 2021, we issued and sold 27,805,198 shares of common stock

under the Sale Agreement and received net proceeds of $60.4 million.

The Sale Agreement was terminated on August 31, 2021.

approximately $88.7 million.

The proceeds from this offering were used (i) for the procurement of raw materials for the manufacturing of BIVIGAM and ASCENIV;

(ii) to support the ongoing commercial sales of BIVIGAM and ASCENIV;

(iii) to expand the manufacturing capacity of our Boca Facility and enhance our supply chain capabilities;

(iii) to expand the

manufacturing capacity of our Boca Facility and enhance our supply chain capabilities;

(iv) to expand our plasma collection facility network;

(v) for research and development and business development opportunities;

and (vi) for general corporate purposes and other capital expenditures.

On May 21, 2019, we issued 12,937,500 shares of our Common Stock in an underwritten public offering for gross proceeds of $51.75 million, before deducting underwriting discounts and commissions and other offering expenses payable by us.

The net proceeds of $48.4 million from the offering have been used (i) to support the commercial launch of ASCENIV, which commenced in October 2019, (ii) for the commercial re-launch of BIVIGAM, (iii) to expand the manufacturing capacity of the Boca Facility, (iv) for the procurement of raw materials for the manufacturing of ASCENIV and BIVIGAM, (v) to expand our plasma collection facility network;

and (vi) for general corporate purposes and other capital expenditures.

and (vi) for general corporate

purposes and other capital expenditures.

On February 11, 2019 (the “Perceptive Closing Date”), we and all of our subsidiaries entered into the Perceptive Credit Agreement.

The Perceptive Credit Agreement, as amended, provided for a senior secured term loan

facility in a principal amount of $100.0 million comprised of (i) a term loan made on the Perceptive Closing Date in the principal amount of $45.0 million, as evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche I

Note”) in favor of Perceptive on the Perceptive Closing Date (the “Perceptive Tranche I Loan”), (ii) a term loan in the principal amount of $27.5 million (the “Perceptive Tranche II Loan”) evidenced by the Company’s issuance of a promissory note

(the “Perceptive Tranche II Note”) in favor of Perceptive on May 3, 2019, (iii) a term loan in the principal amount of $12.5 million evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche III Note”) in favor of

Perceptive on March 20, 2020 (the “Perceptive Tranche III Loan”);

and (iv) a term loan in the principal amount of $15 million evidenced by our issuance of a promissory note in favor of Perceptive on December 8, 2020 (the “Perceptive Tranche IV

Loan”, and together with the Perceptive Tranche I Loan, the Perceptive Tranche II Loan and the Perceptive Tranche III Loan, the “Perceptive Loans”).

The Perceptive Tranche III Loan is the result of an amendment to the Perceptive Credit Agreement

that the Company and Perceptive entered into on May 3, 2019 (the “First Perceptive Amendment”), and the Perceptive Tranche III Loan became available to the Company upon the approval of BIVIGAM on May 9, 2019.

The Perceptive Tranche IV Loan is the

result of an amendment to the Perceptive Credit Facility entered into on December 8, 2020 (the “Second Perceptive Amendment”), which also extended the maturity date of the Perceptive Credit Facility to March 1, 2024 (the “Maturity Date”), subject

to acceleration pursuant to the Perceptive Credit Agreement, including upon an Event of Default (as defined in the Perceptive Credit Agreement).

The proceeds from the Perceptive Tranche IV Loan were used to retire the $15.0 million note we had

payable to Biotest, which had a maturity date of June 17, 2022.

All of the Perceptive Loans were retired and our other obligations under the Perceptive Credit Facility were satisfied using the proceeds we received from the Hayfin Closing Date Loan.

The following table sets forth a summary of our cash flows for the periods indicated:

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Net cash used in operating activities

$ (102,002,958 )

$ (76,193,504 )

Net cash used in investing activities

(12,724,680 )

Net cash provided by financing activities

Net change in cash and cash equivalents

Cash and cash equivalents, including restricted cash - beginning of year

Cash and cash equivalents - beginning of year

Cash and cash equivalents - end of year

Net Cash Used in Operating Activities

Cash used in operations for the year ended December 31, 2020 was $102.0 million, an increase of $25.8 million from the same period of a year ago, mainly due to the increase in net loss.

Cash used in operations for the year ended December 31, 2021 was $112.4 million, an increase of $10.4 million from the same period of a year ago, mainly due to the increase in inventories as we continue to increase

production resulting from the FDA approval of the 4,400 liter scale-up expansion for BIVIGAM.

The following table illustrates the primary components of our cash flows from operations:

Year Ended December 31,

$ (75,748,548 )

$ (48,279,317 )

Non-cash expenses, gains and losses

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Changes in inventories

(28,470,864 )

(34,650,132 )

Changes in prepaid expenses and other current assets

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Cash used in operations

$ (102,002,958 )

$ (76,193,504 )

Net Cash Used in Investing Activities

Net cash used in investing activities for the year ended December 31, 2020 was $12.7 million, which primarily consisted of $7.6 million for capital expenditures at the Boca Facility, which includes equipment purchases and implementation of our in-house fill/finish capabilities, and $5.1 million of capital expenditures for the construction and buildout of new plasma collection facilities.

Cash used in investing activities of $3.8 million for the year ended December 31, 2019 was mainly attributable to capital expenditures at the Boca Facility.

Although we have no specific material commitments for capital expenditures as of December 31, 2020, we expect our total capital expenditures will be between $12.0 million and $20.0 million for fiscal 2021.

Net cash used in investing activities for the year ended December 31, 2021 was $13.5 million, which consisted of $8.6 million for the construction and buildout of new plasma collection facilities and $4.9 million of

capital expenditures at the Boca Facility, which included equipment purchases and continued implementation of our in-house fill/finish capabilities.

Cash used in investing activities of $12.7 million for the year ended December 31, 2020 was

mainly comprised of $7.6 million of capital expenditures at the Boca Facility and $5.1 million for the construction and buildout of new plasma collection facilities.

We expect our total capital expenditures will be between $12.0 million and $18.0

million for fiscal 2022 as we seek to have 10 FDA-approved plasma collection centers in operation by the end of 2023.

Net Cash Provided by Financing Activities

Cash provided by financing activities of $143.9 million for the year ended December 31, 2020 mainly consisted of $88.7 million of net proceeds received from our underwritten public offering in February 2020, $42.5 million of proceeds received from the Sale Agreement during the second half of 2020 and $12.5 million of proceeds from the Perceptive Tranche III Loan received in March 2020.

Cash provided by financing activities during the year ended December 31, 2019 was $80.0 million, which is comprised of the net proceeds received from our May 2019 equity offering in the amount of $48.4 million and the $31.6 million of net proceeds received from the refinancing of our senior credit facility and the subsequent Perceptive Tranche II Loan.

Cash provided by financing activities during the year ended December 31, 2021 was $121.0 million, which is mainly comprised of the net proceeds of $60.4 received from the Sale Agreement, $53.8 million from the

October 2021 underwritten public offering and $6.9 million from the Distribution Agreement.

Cash provided by financing activities of $143.9 million for the year ended December 31, 2020 mainly consisted of $88.7 million of net proceeds received

from our underwritten public offering in February 2020, $42.5 million of proceeds received from the Sale Agreement during the second half of 2020 and $12.5 million of proceeds from the Perceptive Tranche III Loan received in March 2020.

Effect of Inflation

Inflation or changing prices did not have a significant impact on our net sales, revenues or net loss for the years ended December 31, 2020 or 2019.

Although inflation or changing prices did not have a significant impact on our revenues or net loss for the year ended December 31, 2020, inflation however did impact a number of facets of our business during the

year ended December 31, 2021 at both of our business segments.

We experienced price increases for, among other items, raw materials, consumable supplies, services for repairs and maintenance of our facilities and labor costs.

We expect this trend

to continue at least into the first half of 2022, which could have a significant impact on our future results of operations.

In addition, some of our plasma purchase agreements provide for annual price increases that are tied to various consumer

price indices, which have resulted in higher than historical price increases and is expected to result in higher source plasma costs in 2022.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis