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Item 1. Financial Statements

2022-05-11 compared with 2021-11-10 · 804 added, 440 removed, 439 unchanged (74% of the section changed)

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CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

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Deferred revenue, net of current portion

End of term fee

Lease obligations, net of current portion

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shares issued and outstanding

Common Stock - voting, $ 0.0001 par value, 300,000,000 and 150,000,000

shares authorized, 138,313,817 and 104,902,888 shares issued and outstanding

Common Stock - voting, $ 0.0001 par value, 300,000,000 shares authorized, 196,347,529

and 195,813,817 shares issued and outstanding

Additional paid-in capital

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Product revenue

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Total revenues

Cost of product revenue

Gross profit (loss)

OPERATING EXPENSES:

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

Research and development

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Interest expense

Other income (expense)

Loss on extinguishment of debt

Other expense

Other expense, net

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STOCKHOLDERS’ EQUITY

For the Three and Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Stockholders’

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Stock-based compensation

Warrants issued in connection with notes payable

Vesting of Restricted Stock Units, net of shares withheld for taxes and retired

Issuance of common stock, net of offering expenses

Balance at March 31, 2022

( 437,120,578

Stock-based compensation

Issuance of common stock, net of offering expenses

Balance at June 30, 2021

( 377,750,347

Issuance of common stock, net of offering expenses

Vesting of Restricted Stock Units, net of shares withheld for taxes and retired

Stock-based compensation

Balance at September 30, 2021

( 395,463,301

For the Three and Nine Months Ended September 30, 2020

For the Three Months Ended March 31, 2021

Stockholders’

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Issuance of common stock, net of offering expenses

Exercise of stock options

Vesting of Restricted Stock Units, net of shares withheld for taxes and retired

Balance at March 31, 2021

( 358,845,044

Stock-based compensation

Exercise of stock options

Balance at June 30, 2020

( 304,139,876

Stock-based compensation

Vesting of restricted stock units

Issuance of common stock, net of offering expenses

Balance at September 30, 2020

( 321,057,329

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Amortization of debt discount

Loss on extinguishment of debt

Amortization of license revenue

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Purchase of property and equipment

Proceeds from the sale of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on notes payable

( 100,000,000

Proceeds from issuance of common stock, net of offering expenses

Proceeds from the exercise of stock options

Taxes paid on vested Restricted Stock Units

Payment of debt refinancing fees

Proceeds from issuance of note payable

Taxes paid on vested Restricted Stock Units

Payments on finance lease obligations

Payment of deferred financing fees

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents - beginning of period

Net increase in cash and cash equivalents

Cash and cash equivalents - beginning of year

Cash and cash equivalents - end of period

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

ADMA operates through its wholly-owned subsidiaries ADMA BioManufacturing, LLC (“ADMA

BioManufacturing”) and ADMA BioCenters Georgia Inc.

ADMA operates through its

wholly-owned subsidiaries ADMA BioManufacturing, LLC (“ADMA BioManufacturing”) and ADMA BioCenters Georgia Inc.

(“ADMA BioCenters”).

ADMA BioManufacturing was formed in January 2017 to facilitate the acquisition of the Biotest Therapy Business Unit (“BTBU”) from BPC Plasma, Inc.

(formerly Biotest

Pharmaceuticals Corporation) (“BPC” and, together with Biotest AG, “Biotest”) on June 6, 2017.

The acquisition included certain assets (the “Biotest Assets”) of BTBU, which included the FDA-licensed BIVIGAM and Nabi-HB immunoglobulin products,

and an FDA-licensed plasma fractionation manufacturing facility located in Boca Raton, FL (the “Boca Facility”) (the “Biotest Transaction”).

BTBU had previously been the Company’s third-party contract manufacturer.

ADMA BioCenters is the

Company’s source plasma collection business with nine plasma collection facilities in various stages of approval and development

located throughout the U.S., three of which hold an approved license with the U.S.

Food and Drug Administration (the “FDA”).

ADMA BioManufacturing was formed in January 2017 to facilitate the acquisition of the Biotest Therapy

Business Unit (“BTBU”) from BPC Plasma, Inc.

(formerly Biotest Pharmaceuticals Corporation) (“BPC” and, together with Biotest AG, “Biotest”) on June 6, 2017.

The acquisition included certain assets of BTBU, including the U.S.

Food and Drug

Administration (“FDA”)-licensed BIVIGAM and Nabi-HB immunoglobulin products, and an FDA-licensed plasma fractionation manufacturing facility located in Boca Raton, FL (the “Boca Facility”) (the “Biotest Transaction”).

BTBU had previously been

the Company’s third-party contract manufacturer.

ADMA BioCenters is the Company’s source plasma collection business with ten

plasma collection facilities in various stages of approval and development located throughout the U.S., five of which hold an approved license with the FDA.

The Company has three FDA-approved products, all of which are currently marketed and commercially available:

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develop a pipeline of plasma-derived therapeutics, and its 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.

As of September

30, 2021, the Company had working capital of $ 142.4 million, including $ 34.4 million of cash and cash equivalents.

Based upon the Company’s current projected revenue and expenditures, including capital expenditures and continued implementation of the

Company’s commercialization and expansion activities, the Company’s management currently believes that its cash, cash equivalents, projected revenue and accounts receivable, including the proceeds received from the underwritten public offering

completed by the Company on October 25, 2021 (see Note 14), will be sufficient to fund ADMA’s operations, as currently conducted, through the first half of 2022.

In order to have sufficient cash to fund its operations thereafter, the Company

anticipates it will need to raise additional capital during the second half of 2022, which includes the Company’s plans to refinance and expand upon its existing debt facility.

Company believes that a debt refinancing and expansion of its current debt facility, combined with the proceeds received from the foregoing public offering further discussed in Note 14, will be sufficient to fund its operations into the first

quarter of 2024, at which time the Company believes its operations will be cash flow positive.

The Company is also evaluating a variety of strategic and financing alternatives and has engaged Morgan Stanley as a financial advisor in

connection with certain of those strategic alternatives.

There can be no assurances that the Company will be able to successfully refinance or expand its existing debt to obtain additional non-dilutive financing.

These estimates may

change based upon several factors, including the success of the Company’s commercial sales of its products, manufacturing ramp-up activities, the acceptability of ADMA’s immune globulin products by physicians, patients or payers and the various

financing options that may be available to the Company.

In addition, the Company’s 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.

The Company currently has no firm commitments for additional financing, including for refinancing or

expanding the Company’s debt, and there can be no assurance that the Company will be able to secure additional financing on terms that are acceptable to the Company, or at all.

Furthermore, if the Company’s assumptions underlying its

estimated expenses and revenues are incorrect, it may have to raise additional capital sooner than currently anticipated.

As of March 31, 2022, the

Company had working capital of $ 208.2 million, including $ 69.5 million of cash and cash equivalents.

Based upon the Company’s current projected revenue and expenditures, including capital expenditures and continued

implementation of the Company’s commercialization and expansion activities, the Company’s management currently believes that its cash, cash equivalents, projected revenue and accounts receivable, together with the remaining available funds

under the distribution agreement entered into in September of 2021 (see Note 8) and the net proceeds received and expected to be received from the refinancing of the Company’s senior debt on March 23, 2022 (see Note 7), will be sufficient to

fund ADMA’s operations, as currently conducted, into the first quarter of 2024, at which time the Company believes it will begin to generate positive cash flow from operations.

These estimates may change based upon several factors, including

the success of the Company’s commercial efforts with respect to the sale of its products, whether or not the assumptions underlying the Company’s projected revenues and expenses are correct and the acceptability of ADMA’s immune globulin

products by physicians, patients or payers.

There can be no assurance that the Company’s approved products will be commercially viable, or that plant

capacity expansion, plasma center buildouts or other capital improvements will be successfully completed or that any product developed in the future will be approved.

The Company is subject to risks common to companies in the biotechnology

and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, inflationary

pressures, supply chain constraints, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements.

The Company is also continuing to evaluate a variety of strategic alternatives

through its ongoing engagement with Morgan Stanley as a financial advisor.

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Due to numerous risks

and uncertainties associated with FDA review, inspections and approvals related to the Company’s products or the labeled indications of such products, ongoing compliance requirements and capacity expansion efforts at the Company’s Boca Facility

and future commercialization of the Company’s products, including the Company’s ability to obtain adequate quantities of FDA-approved plasma with proper specifications on acceptable terms for use in the Company’s manufacturing process, as well

as the additional uncertainties surrounding the COVID-19 pandemic (see Note 10), the Company is unable to estimate with certainty the amounts of increased capital outlays and operating expenditures required to fund its commercial and

development activities.

The Company’s current estimates may be subject to change as circumstances regarding its business requirements evolve.

Failure to secure any necessary financing in a timely manner and on commercially reasonable terms

could have a material adverse effect on the Company’s business plan and financial performance and it could be forced to delay or discontinue its commercialization, product development or clinical activities or delay or discontinue the approval

efforts for any of the Company’s products or product candidates.

The Company has reported cumulative losses since inception in June 2004 through September 30, 2021 of $ 395.5 million.

As such, these factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements do not

include any adjustments related to the recoverability and classification of asset carrying amounts and the classification of liabilities that might be necessary from the outcome of this uncertainty.

During the nine months ended September 30, 2021, the Company raised $ 67.3

million from the sale of its common stock (see Note 8).

On October 25, 2021, the Company completed an underwritten public offering which raised an additional $ 53.9 million from the sale of its common stock (see Note 14).

The sale of additional equity or debt securities, if convertible, could result in dilution to the Company’s existing stockholders and, in such event, the market value of

its common stock may decline.

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

the Company is exploring additional contract manufacturing arrangements and other business development opportunities, which may provide additional liquidity to the Company.

There can be no assurance that the Company’s approved products will be commercially viable, or that research and

development, plant capacity expansion, plasma center build-outs or other capital improvements will be successfully completed or that any product developed in the future will be approved.

The Company is subject to risks common to companies in

the biotechnology and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel,

protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting

principles generally accepted in the United States of America (“U.S.

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States

of America (“U.S.

GAAP”) for interim financial information.

Any reference in these notes to applicable guidance is meant to refer to U.S.

GAAP as found in the Accounting Standards Codification

(“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”).

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the annual

audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the U.S.

GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”)

of the Financial Accounting Standards Board (the “FASB”).

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto as of and

for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the U.S.

Securities and Exchange Commission (the “SEC”) on March 24, 2022.

The accompanying consolidated balance sheet as of December 31, 2020 was derived from the audited financial statements as of and for the year ended December 31, 2020.

These condensed consolidated interim financial statements have been

prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X, and therefore omit or condense certain footnotes and other information normally included in complete consolidated financial statements prepared in

accordance with U.S.

All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring

adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2021 and its results of operations,

changes in equity and cash flows for the three and nine months ended September 30, 2021.

During the three and nine months ended September 30, 2021 and 2020, comprehensive loss was equal to the net loss amounts

The accompanying consolidated balance sheet as of December 31,

2021 was derived from the audited financial statements as of and for the year ended December 31, 2021.

These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8

of Regulation S-X, and therefore omit or condense certain footnotes and other information normally included in complete consolidated financial statements prepared in accordance with U.S.

All intercompany balances and transactions have

been eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and

assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of March 31, 2022 and its results of operations, changes in stockholders’ equity and cash flows for the three months

ended March 31, 2022 and 2021.

During the three months ended March 31, 2022 and 2021, comprehensive loss was equal to the net loss amounts

presented for the respective periods in the accompanying condensed consolidated statements of operations.

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Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those

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

the Company’s equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for the Company’s deferred tax assets.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include

rebates and chargebacks deducted from gross revenues, 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 the Company’s equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for the Company’s deferred tax assets.

Fair Value of Financial Instruments

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts

receivable and accounts payable, are shown at cost which approximates fair value due to the short-term nature of these instruments.

The debt outstanding under the Company’s senior secured term loan (see Note 7) approximates fair value due to

the variable interest rate on this debt.

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, are shown at

cost which approximates fair value due to the short-term nature of these instruments.

The debt outstanding under the Company’s senior secured term loan (see Note 7) approximates fair value due to the variable interest rate on this debt.

Accounts Receivable

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the amount of $ 0.1 million and $ 0.2

million at September 30, 2021 and December 31, 2020, respectively, which are recognized in the period the related revenue is recorded.

The Company extends credit to its customers based upon an evaluation

of each customer’s financial condition and credit history.

million at March 31, 2022 and December 31, 2021, respectively, which are recognized in the period the related revenue is recorded.

The Company extends credit to its 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.

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credit risk is minimal.

At September 30, 2021, six customers accounted for an aggregate of 94 % of the Company’s total accounts receivable, and at December 31, 2020, three

At March 31, 2022, four customers accounted for an aggregate of 92 % of the Company’s total accounts receivable, and at December 31, 2021, three

customers accounted for approximately 94 % of the Company’s total accounts receivable.

Raw materials inventory consists of various materials purchased from suppliers, including normal

source plasma, used in the production of the Company’s products.

Work-in-process and finished goods inventories (see Note 3) 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.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Raw materials inventory consists of various materials purchased from suppliers, including

normal source plasma, used in the production of the Company’s products.

Work-in-process and finished goods inventories (see Note 3) 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

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the consideration the Company expects 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, and the Company believes that such assumptions 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.

In addition, costs associated with the production of conformance or engineering

lots that would not qualify as immediately available for commercial sale are charged to cost of product revenue and not capitalized into inventory.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The estimates for net realizable value of inventory are based on contractual terms or upon historical

experience and certain other assumptions, and the Company believes that such assumptions 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.

In addition, costs associated with the production of

conformance or engineering lots that would not qualify as immediately available for commercial sale are charged to cost of product revenue and not capitalized into inventory.

Goodwill represents the excess of purchase price over the fair value of net assets acquired by the Company.

September 30, 2021 and December 31, 2020 was $ 3.5 million.

at March 31, 2022 and December 31, 2021 was $ 3.5 million.

All of the Company’s goodwill is attributable to its ADMA

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The Company’s annual

goodwill impairment test as of October 1, 2021 did not result in a goodwill impairment charge, and the Company did no t record

any impairment charges related to goodwill for the three and nine months ended September 30, 2021 and 2020.

goodwill impairment test as of October 1, 2021 did not result in a goodwill impairment charge, and the Company did no t record any impairment charges related to goodwill for the three months

ended March 31, 2022 and 2021.

Impairment of Long-Lived Assets

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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.

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.

For the three and

nine months ended September 30, 2021 and 2020, the Company determined that there was no impairment of its long-lived assets.

three months ended March 31, 2022 and 2021, the Company determined that there was no impairment of its long-lived assets.

Revenue Recognition

Revenues for the three and nine months ended September 30, 2021 and 2020 are comprised of (i) revenues from the sale of

the Company’s immunoglobulin products, BIVIGAM, ASCENIV and Nabi-HB, (ii) product revenues from the sale of human plasma collected through the Company’s Plasma Collection Centers business segment, (iii) contract manufacturing and laboratory

services revenue, (iv) revenues from the sale of intermediate by-products;

and (v) license and other revenues primarily attributable to the out-licensing of ASCENIV to Biotest in 2012 to market and sell this product in Europe and selected

countries in North Africa and the Middle East.

Biotest has provided the Company with certain services and financial payments in accordance with the related Biotest license agreement and is obligated to pay the Company certain amounts in the

future if certain milestones are achieved.

Revenues for the three months ended March 31, 2022 and 2021 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, BIVIGAM, ASCENIV

and Nabi-HB, (ii) product revenues from the sale of human plasma collected through the Company’s Plasma Collection Centers business segment, (iii) contract manufacturing and laboratory services revenue, (iv) revenues from the sale

of intermediate by-products;

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

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

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

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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control transfers to the customer and the performance obligation is satisfied when the customer takes possession of the product from the Boca Facility or from a third-party warehouse that is utilized by the Company.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Product revenues from the sale of human plasma collected at the Company’s 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 from the sale of human plasma collected at the Company’s 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 the Company retains control of the product during shipment.

For the nine months ended September 30, 2021, four customers represented an aggregate of 74 % of the

Company’s consolidated revenues.

For the nine months ended September 30, 2020, three customers represented an aggregate of 82 % of the Company’s consolidated revenues.

For the three months ended March 31, 2022, three

customers represented an aggregate of 83 % of the Company’s consolidated revenues.

For the three months ended March 31, 2021, five customers represented an aggregate of 86 %

of the Company’s consolidated revenues.

Cost of Product Revenue

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weighted average number of shares of common stock outstanding during the period.

Diluted loss per common share is calculated by dividing net loss attributable to common stockholders, as adjusted for the effect of dilutive securities, if any,

by the weighted average number of shares of common stock and dilutive common stock outstanding during the period.

Potentially dilutive common stock includes the shares of common stock issuable upon the exercise of outstanding stock options

and warrants, using the treasury stock method.

Diluted loss per common share is calculated by dividing net loss attributable to common stockholders, as adjusted for the effect of dilutive securities, if

any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period.

Potentially dilutive common stock includes the shares of common stock issuable upon the exercise of outstanding stock

options and warrants, using the treasury stock method.

Potentially dilutive common stock is excluded from the diluted loss per common share computation to the extent that it would be anti-dilutive.

As a result, no potentially dilutive securities are

included in the computation of any of the accompanying diluted loss per share amounts in the accompanying condensed consolidated financial statements as the Company reported a net loss for all periods presented.

For the nine months ended September 30, 2021 and 2020, the following securities were excluded from the calculation of diluted loss per common

share because of their anti-dilutive effects:

For the Nine Months Ended September 30,

As a result, no potentially dilutive

securities are included in the computation of any of the accompanying diluted loss per share amounts in the accompanying condensed consolidated financial statements as the Company reported a net loss for all periods presented.

For the three months ended March 31, 2022 and

2021, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects:

For the Three Months Ended March 31,

Stock options

Restricted stock units

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

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related to forfeitures of unvested stock options is fully reversed at the time of forfeiture.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have

been included in the consolidated financial statements or its tax returns.

Under this method, deferred tax assets and liabilities are recognized for the temporary differences between the tax bases of assets and liabilities and their respective

financial reporting amounts at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company records a valuation allowance on its deferred tax assets if it is more likely than not that the

Company will not generate sufficient taxable income to utilize its deferred tax assets.

The Company is subject to income tax examinations by major taxing authorities for all tax years since 2016 and for previous periods as it relates to the

Company’s net operating loss carryforwards.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial

statements or its tax returns.

Under this method, deferred tax assets and liabilities are recognized for the temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts at enacted

tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company records a valuation allowance on its deferred tax assets if it is more likely than not that the Company will not generate sufficient

taxable income to utilize its deferred tax assets.

The Company is subject to income tax examinations by major taxing authorities for all tax years since 2017 and for previous periods as it relates to the Company’s net operating loss

carryforwards.

In accordance with U.S.

GAAP, the Company is required to determine whether a tax position of the Company is more likely

than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The tax benefit to be recognized is measured as

the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by

the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The tax benefit to be recognized is measured as the largest amount of benefit that is

greater than 50% likely of being realized upon ultimate settlement.

Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets.

Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of September 30, 2021 and December 31, 2020, and during the three and nine months ended September 30, 2021 and 2020, the

Company recognized no adjustments for uncertain tax positions.

Recent Accounting Pronouncements

In June 2016, the FASB issued 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.

The Company adopted ASU

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

Based on its analysis, the Company

has determined that it has not incurred any liability for unrecognized tax benefits as of March 31, 2022 and December 31, 2021, and during the three months ended March 31, 2022 and 2021, the Company recognized no adjustments for uncertain tax positions.

The following table provides the components of inventories:

September 30,

Raw materials

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INTANGIBLE ASSETS

Intangible assets at September 30, 2021 and December 31, 2020 consist of the following:

September 30, 2021

Intangible assets at March 31, 2022 and December 31, 2021 consist of the following:

March 31, 2022

December 31, 2021

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Rights to intermediates

Customer contract

All of the Company’s intangible assets were acquired in the Biotest Transaction.

Amortization expense

related to these intangible assets was $ 0.2 million for the three months ended September 30, 2021 and 2020, and $ 0.5 million for the nine months ended September 30, 2021 and 2020.

Estimated aggregate future aggregate amortization expense is expected to be as follows:

related to these intangible assets was $ 0.2 million for the three months ended March 31, 2022 and 2021.

Estimated aggregate

future aggregate amortization expense is expected to be as follows:

Remainder of 2022

1 unchanged sentence

Property and equipment and related accumulated depreciation are summarized as

September 30, 2021

March 31, 2022

December 31, 2021

6 unchanged sentences

Accumulated depreciation

Total property and equipment, net

Total property, plant and equipment, net

Property and equipment are stated at cost less accumulated depreciation.

5 unchanged sentences

Leasehold improvements are amortized over the lesser of the lease term or their estimated useful lives.

The Company recorded depreciation expense on property and equipment for the three and

nine months ended September 30, 2021 of $ 1.2 million and $ 3.4 million, respectively.

Depreciation expense for the three and nine months ended September 30, 2020 was $ 0.9 million and $ 2.2 million, respectively.

The Company recorded depreciation expense on property and equipment for the three

months ended March 31, 2022 and 2021 of $ 1.4 million and $ 1.1 million, respectively.

ADMA BIOLOGICS, INC.

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at September 30, 2021 and December 31, 2020 are as follows:

September 30, 2021

Accrued expenses and other current liabilities at March 31, 2022 and December 31, 2021 are as follows:

March 31, 2022

December 31, 2021

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Accrued distribution fees

Accrued payroll

Accrued testing

Accrued incentives

Accrued severance

Accrued testing

Accrued payroll

Total accrued expenses and other current liabilities

A summary of outstanding senior notes payable is as follows:

September 30, 2021

March 31, 2022

December 31, 2021

2 unchanged sentences

Senior notes payable

Under the Credit Agreement and Guaranty, as amended from time to time, (the “Perceptive Credit Agreement”) with

Perceptive Credit Holdings II, LP, as the lender and administrative agent (“Perceptive”), the Company has a principal balance outstanding to Perceptive in the form of senior secured notes payable to Perceptive aggregating to $ 100.0 million with a maturity date of 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 Maturity Date, the Company will pay Perceptive the entire

outstanding principal amount and any accrued and unpaid interest thereon.

Prior to the Maturity Date, there are no scheduled principal payments due under the Perceptive Credit Agreement.

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 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 September 30, 2021 was 11.0 %, and the

Company paid interest to Perceptive during the nine months ended September 30, 2021 and 2020 in the amount of $ 8.3 million and $ 6.8 million, respectively.

All of the Company’s obligations under the Perceptive Credit Agreement are secured by a first-priority lien and security

interest in substantially all of the Company’s tangible and intangible assets, including intellectual property and all of the equity interests in the Company’s 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 the ability of the Company and its subsidiaries to, among other things and

subject to certain exceptions contained in the Perceptive Credit Agreement, incur new indebtedness;

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

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

The 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, the Company’s

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, the Company used $ 100.0

million of the Hayfin Closing Date Loan to terminate and pay in full all of the outstanding obligations under the Company’s previously existing credit facility (the “Perceptive Credit Facility”) with Perceptive Credit Holdings II, LP

(“Perceptive”).

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

Perceptive and used approximately $ 0.6 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.

In connection with the retirement of the Perceptive Credit Facility and all of the obligations thereunder, the Company recorded a loss on

extinguishment of debt in the amount of $ 6.7 million, consisting of the write-off of unamortized discount related to the

Perceptive indebtedness and the redemption premium paid to Perceptive.

Borrowings under the Hayfin Credit Agreement will bear interest, at the Company’s 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) adjusted Term Secured Overnight Financing Rate (“SOFR”) for a one-month

tenor in effect on such day plus 1.00 %), plus an applicable margin of 8.5 %, or (b) adjusted Term SOFR for either a one-month or three-month tenor, as elected by the Company, and subject to a floor of 1.25 %, plus an applicable margin of 9.5 % (the “Applicable Margin”);

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

On the last day of each calendar month or quarter during the term of the Hayfin Credit Facility, the Company will pay accrued interest to Hayfin.

The rate of interest in effect as of the Hayfin Closing Date and at March 31, 2022

The Company 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, which will be added to the principal amount of the outstanding debt under

the Hayfin Credit Facility.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On the Hayfin Maturity Date, the Company 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.

This exit fee is recorded

separately as a non-current liability on the accompanying consolidated balance sheet as of March 31, 2022.

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

The Company 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, the Company is required to pay an exit fee of 1.0 % of the amount of principal being paid.

fee is classified as a separate non-current liability in the accompanying condensed consolidated balance sheet as of March 31, 2022.

All of the Company’s obligations under the Hayfin Credit Agreement are secured by a first-priority lien and security interest in substantially all of the

Company’s tangible and intangible assets, including intellectual property and all of the equity interests in the Company’s 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 the ability of the Company and its 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 the Company’s or its

subsidiaries’ business activities;

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

engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s or its subsidiaries’ business

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

change its fiscal year;

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repay other certain indebtedness;

engage in certain affiliate

transactions;

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

In addition, the Company 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 $ 7.0 million for the fiscal quarter ended June 30, 2019 to $ 55.0 million for

the fiscal quarter ending December 31, 2021.

At September 30, 2021, the Company was in compliance with all of the covenants contained in the Perceptive Credit Agreement.

engage in certain affiliate transactions;

or enter into,

amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Hayfin Credit Agreement.

In addition, the Company is 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.

As of March 31, 2022, the Company was in compliance with all of the covenants contained in the Hayfin Credit Agreement.

As consideration for the Hayfin Credit Agreement, the Company issued to various entities affiliated with Hayfin, on the Hayfin Closing Date, warrants to

purchase an aggregate of 9,103,047 shares of the Company’s common stock (the “Hayfin Warrants”).

The Hayfin Warrants have an

exercise price equal to $ 1.6478 per share, which is equal to the trailing 30 -day Volume Weighted-average Price of the Company’s common stock on the business day immediately prior to the Hayfin Closing Date.

The Hayfin Warrants were valued by the Company at

approximately $ 9.6 million as of the Hayfin Closing Date and have an expiration date of March 23, 2029 .

As a result of the upfront fee and exit fee paid or payable to Hayfin, the expenses incurred by the Company in connection with this transaction and the

value of the Hayfin Warrants, the Company recognized an aggregate discount on the Hayfin Loans in the amount of $ 13.4 million.

The Company records debt discount as a reduction to the face amount of the debt, and the debt discount is amortized as interest expense over the life of the debt using the interest method.

Based on the fair value of the Hayfin Warrants and

the aggregate amount of fees and expenses associated with obtaining the Hayfin Credit Facility, the effective interest rate on the Hayfin Loans as of the Hayfin Closing Date and as of March 31, 2022 was approximately 13.0 %.

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As a result of the fees paid to Perceptive and the value of the warrants issued to Perceptive under the terms of the

Perceptive Credit Agreement, the Company recognized an aggregate discount on the senior secured notes in the amount of $ 7.1 million.

The Company records debt discount as a reduction to the face amount of the debt, and the debt discount is amortized as interest expense over the life of the debt using the interest method.

Based on the fair value of the Perceptive Warrants and

the aggregate amount of fees and expenses associated with obtaining the Perceptive Credit Facility, the effective interest rate on senior secured notes payable to Perceptive as of September 30, 2021 was approximately 13.7 %.

STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is currently authorized to issue up to 10 million shares of preferred stock, $ 0.0001 , par

value per share.

There were no shares of preferred stock outstanding at September 30, 2021 and December 31, 2020.

As of September 30, 2021 and December 31, 2020, the Company was authorized to issue 300,000,000 and 150,000,000 shares,

respectively, of its common stock, $ 0.0001 par value per share, and 138,313,817 and 104,902,888 shares of common stock were

outstanding as of September 30, 2021 and December 31, 2020, respectively.

On May 27, 2021, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation which increased the number of shares of common stock that

the Company is authorized to issue from 150,000,000 to 300,000,000 .

After giving effect to the 16,828,915 shares reserved for

outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of September 30, 2021 there were 144,641,489

shares of common stock available for issuance.

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

offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $ 50 million of shares of

the Company’s common stock.

On November 5, 2020 and February 3, 2021, the Company and Jefferies amended the Sale Agreement to provide for increases in the aggregate offering amount under the Sale Agreement such that the Company could sell

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

During the nine months ended

September 30, 2021, the Company issued and sold 27,805,198 shares of common stock under the 2020 Sale Agreement and received net

proceeds of $ 60.4 million.

The Sale Agreement was terminated on August 31, 2021.

On September 3, 2021, the Company

entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which the Company may offer and sell, from time to time, at its option, through or

to the Agent, up to an aggregate o f $ 50 million of

The Company is currently authorized to issue up to 10 million shares of preferred stock, $ 0.0001 , par value per share.

There were no shares of preferred stock outstanding at March 31, 2022 and December 31, 2021.

As of March 31, 2022 and December 31, 2021, the Company was authorized to issue 300,000,000 shares of its common stock, $ 0.0001

par value per share, and 196,347,529 and 195,813,817 shares of common stock were outstanding as of March 31, 2022 and December 31, 2021, respectively.

After giving effect to the 32,811,653 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of March 31, 2022

there were 70,840,818 shares of common stock available for issuance.

On September 3, 2021, the

Company entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which the Company may offer and sell, from time to time, at its option, through or to

the Agent, up to an aggregate of $ 50 million of

shares of the Company’s common stock (the “Distribution Agreement”).

The Company currently intends to use any net proceeds from the sale of its common stock under the Distribution Agreement for general corporate purposes, including

procurement of raw materials, source plasma, supply chain initiatives and production expenditures, funding expansion of plasma centers, working capital, capital expenditures, expansion and resources for commercialization activities, and other

The Company intends to use any net proceeds from the sale of 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 nine months ended September 30, 2021, the Company issued 5,540,831

shares of its common stock under the Distribution Agreement and received net proceeds of $ 6.9 million.

On February 11, 2020, the Company completed an underwritten public offering of 23,500,000 shares of its common stock for gross proceeds of $ 82.3

On February 21, 2020, the Company sold an additional 3,525,000 shares pursuant to the underwriters’ exercise of their

option to purchase additional shares of the Company’s common stock for additional gross proceeds of $ 12.3 million.

received net proceeds, after underwriting discounts and other expenses associated with the offering, of approximately $ 88.7 million.

At September 30, 2021 and December 31, 2020, the Company had outstanding warrants to purchase an aggregate of 4,528,160 shares of common stock, with a weighted average exercise price of $ 2.82 per share and expiration dates ranging between June 2022 and December 2030.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company currently has approximately $ 42.8 million of shares

available to sell under the Distribution Agreement.

On August 5, 2020,

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

time to time, at its option, through or to Jefferies, up to an aggregate of $ 50 million of shares of the Company’s common

aggregate offering price of up to $ 105.4 million under the Sale Agreement, as amended.

During the three months ended March 31,

2021, the Company issued and sold 18,080,708 shares of common stock under the Sale Agreement and received net proceeds of $ 41.9 million.

In connection with the Hayfin Credit Agreement that the Company entered into on March 23, 2022 (see Note 7), the

Company issued the Hayfin Warrants to purchase 9,103,047 shares of the Company’s common stock.

The Hayfin Warrants were valued at

$ 9.6 million using the Black-Scholes option-pricing model assuming an expected term of seven years , a volatility of 68.1 %, a dividend yield of 0 % and a risk-free rate of interest of 2.36 %.

At March 31, 2022, the Company had outstanding warrants to purchase an aggregate of 13,631,207 shares of common stock, with a

weighted-average exercise price of $ 2.04 per share.

At December 31, 2021, the Company had outstanding warrants to purchase an

aggregate of 4,528,160 shares of common stock, with a weighted average exercise price of $ 2.82 per share and expiration dates ranging between June 2022 and December 2030.

Equity Incentive Plans

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2014 Omnibus Incentive Compensation Plan, as amended and restated (the “2014 Plan”), was determined on the date of grant using the Black-Scholes option valuation model.

The Black-Scholes model was developed

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

In addition, option valuation models require the input of certain subjective assumptions including the expected

stock price volatility.

The stock options granted to employees and directors have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value

The following assumptions were used to determine the fair value of options granted during the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

The Black-Scholes model was

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

In addition, option valuation models require the input of certain subjective assumptions including the

expected stock price volatility.

value estimate.

following assumptions were used to determine the fair value of options granted during the three months ended March 31, 2022 and 2021:

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Expected term

3 unchanged sentences

Risk-free interest rate

During the nine months ended September 30, 2021 and 2020, the Company granted options to purchase an aggregate of 1,757,050 and 1,398,412 shares of

common stock, respectively, to its directors, employees and certain third-party service providers.

The weighted average remaining contractual life of stock options outstanding and expected to vest at September 30, 2021 is 6.3 years.

The weighted average remaining contractual life of stock options exercisable at September 30, 2021 is 5.1 years.

During the three months ended March 31, 2022 and 2021, the Company granted options to purchase an aggregate of 1,194,032 and 1,441,050 shares of

common stock, respectively, to its directors and employees.

The weighted average remaining contractual life of stock options outstanding and expected to vest at March 31, 2022 is 6.6 years.

The weighted average remaining contractual life of stock options exercisable at March 31, 2022 is 5.3 years.

A summary of the Company’s option activity under the 2007 Plan and 2014 Plan and related information is as follows:

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Options outstanding, vested and expected to vest at December 31, 2021

Options outstanding, vested and expected to vest at September 30, 2021

Options outstanding, vested and expected to vest at March 31, 2022

Options exercisable

As of September 30, 2021, the Company had $ 3.7 million of unrecognized compensation expense related to options granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 2.5 years.

During the nine months ended September 30, 2021 and 2020, the Company granted Restricted Stock Units

As of March 31, 2022, the Company had $ 3.8 million of unrecognized compensation expense related to options granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average

period of 2.6 years.

During the three months ended March 31, 2022 and 2021, the Company granted Restricted Stock Units

(“RSUs”) representing an aggregate of 1,059,266 and 492,744 shares, respectively, to certain management employees of the Company and to members of its Board of Directors .

Except for the RSUs granted under the Company’s retention incentive program discussed below, the RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors.

28, 2021, the Company implemented a retention incentive program for the Company’s executive management and certain employees (see Note 10), whereby the Company issued an aggregate of 3,780,000 RSUs, of which 2,632,500 are time-based RSUs and 1,147,500 are milestone-based RSUs.

Fifty percent

of the time-based RSUs granted under the retention bonus program will vest on December 31, 2022, with the remainder vesting in quarterly installments through December 31, 2024.

The milestone-based RSUs will vest upon achievement of the

applicable milestone, with each milestone required to be achieved on or prior to December 31, 2022.

The Company will periodically assess the probability of vesting for each milestone-based RSU and will adjust compensation expense based on

its probability assessment.

During the nine months ended September 30, 2021, 92,750 shares vested in connection with grants of RSUs.

With respect to these vested RSUs, 27,850 shares valued at approximately $ 62,000 were withheld by the Company to cover employees’

tax liabilities.

These shares have been retired by the Company and were no longer outstanding as of September 30, 2021.

A summary of the Company’s

unvested RSU activity and related information is as follows:

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

These RSUs generally vest annually over a period of four years

for employees and semi-annually over a period of one year for directors .

During the three months ended March 31, 2022 , there were 799,641 shares of common stock which vested in connection with grants of RSUs, including 254,745

milestone-based RSUs that vested in connection with the refinancing of the Company’s senior credit facility (see Note 7) and 382,117

milestone-based RSUs that vested in connection with the Company achieving a targeted gross margin for its BIVIGAM product during the three months ended March 31, 2022.

With respect to the vested RSUs, 265,929 shares valued at approximately $ 0.4

million were withheld by the Company to cover employees’ tax liabilities.

These shares have been retired by the Company and were no longer outstanding as of March 31, 2022 .

A summary of the Company’s unvested RSU activity and related information is as

Average Grant

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Balance at December 31, 2021

Balance at September 30, 2021

As of September 30, 2021, the Company had $ 5.8 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 2.8 years.

Balance at March 31, 2022

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2022 , the Company had $ 5.7 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average

period of 2.7 years.

Total stock-based compensation expense for all awards granted under the Company’s equity incentive plans for the three

months and nine months ended September 30, 2021 and 2020 is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

months ended March 31, 2022 and 2021 is as follows:

Three Months Ended March 31,

Research and development

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pursuant to an agreement for services effective as of January 1, 2016, as amended from time to time.

Rent expense for the nine months ended September 30, 2021 and 2020 amounted to $ 90,000 .

Rent expense for the three months ended March 31, 2022 and 2021 amounted to $ 30,000 .

Areth is a company controlled by Dr.

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Chief Executive Officer.

The Company also reimburses Areth for office and building-related (common area) expenses, equipment and certain other operational expenses, which were not material to the consolidated financial statements for the nine

months ended September 30, 2021 and 2020.

In addition, during the nine months ended September 30, 2021 and 2020, the Company purchased certain specialized medical equipment and services related to the Company’s plasma collection centers, as well as

personal protective equipment, from GenesisBPS and its affiliates (“Genesis”), in the amount of $ 0.1 million.

Grossman and Adam

Grossman each own shares of Genesis.

See Note 7 for a discussion of the Company’s credit facility and related

transactions with Perceptive, a holder of approximately 9.6 % of the Company’s common stock.

During the nine months ended September 30, 2021, in connection with the resignation

James Mond, the Company’s former Chief Scientific and Medical Officer, the Company recognized an expense and corresponding liability in the amount of $ 0.8 million for estimated payments to be made under a separation and transition agreement with Dr.

Such payments are to be made in scheduled installments over a period of 10 months.

In connection with the February 2020 public offering of the Company’s common stock

(see Note 8) on February 11, 2020:

(i) Perceptive Advisors, a principal stockholder of ADMA, purchased 4,563,700 shares of common stock

through one of its affiliates, (ii) Dr.

Grossman purchased 22,857 shares of common stock directly and 22,857 shares indirectly through an entity he controls, (iii) Lawrence P.

Guiheen, a director of the Company, purchased 20,000 shares of common stock, (iv) Mr.

Grossman purchased 28,571 shares of common stock directly and 57,143 shares indirectly through an entity he controls, (v)

Brian Lenz, the Company’s Executive Vice President and Chief Financial Officer, purchased 7,142 shares of common stock, and (vi) Dr.

Mond purchased 4,285 shares of common stock, all at the public offering price of $ 3.50 per share.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

three months ended March 31, 2022 and 2021.

During the three months ended March 31, 2022 and 2021, the Company purchased certain

specialized medical equipment and services related to the Company’s plasma collection centers, as well as personal protective equipment, from GenesisBPS and its affiliates (“Genesis”), which were not material to the consolidated financial

Genesis is owned by Dr.

Grossman and Adam Grossman.

See Note 7 for a discussion of the Company’s former credit facility and related

transactions with Perceptive, a holder of more than 5 % of the Company’s common stock as of March 31, 2022.

COMMITMENTS AND CONTINGENCIES

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The Company continues to monitor the ongoing developments related to the COVID-19 pandemic, including the emergence of

the Delta variant and other resistant strains of the coronavirus, and its impacts to the Company’s 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.

the Delta and Omicron variants and other resistant strains of the coronavirus, and its impacts to the Company’s 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,

2 unchanged sentences

shipments of source plasma from its 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 its

The Company is also subject to supply chain delays as a result of certain of its suppliers diverting significant resources towards the rapid development and distribution of COVID-19 vaccines and, as a result, the Company may elect to

carry more raw materials inventory than it has in the past.

The COVID-19 pandemic has also impacted, to a certain degree, the Company’s 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 the Company’s ability to communicate with

potential customers.

The Company has implemented a comprehensive suite of virtual engagement initiatives, however, clinician engagement has been reduced due to rapidly evolving COVID-19 priorities at U.S.

In addition, the Company is subject to supply chain delays as a result of certain of its suppliers diverting significant resources towards the rapid development and distribution of COVID-19 vaccines and, as a result, the Company has

elected to carry more raw materials inventory than it has in the past.

The COVID-19 pandemic has also impacted, to a certain degree, the Company’s 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 the Company’s ability to communicate

with potential customers.

The Company has 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.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The pandemic could also impact the Company’s 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.

Although the Company received several FDA approvals and an FDA inspection of the Boca Facility was completed during the first nine months of 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.

Although the Company 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 three months ended March 31, 2022 and 2021, revenue attributable to international customers was

approximately 6 % and 15 %,

respectively, of the Company’s total revenues.

As the Company seeks to grow this aspect of its business, it 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 the Company’s financial

21 unchanged sentences

containing antibodies to RSV from Grifols.

Pursuant to this amendment, until January 1, 2022, the Company may purchase RSV plasma from Grifols from the two plasma collection centers that were transferred to BPC on January 1, 2019 at a price equal to cost plus five percent ( 5 %) (without any additional increase due to inflation).

Pursuant to this amendment, until January 1, 2022, the Company could purchase RSV plasma from Grifols from the two plasma collection centers that were transferred to BPC on January 1, 2019 at a price equal to cost plus five percent ( 5 %) (without any additional increase due to inflation).

Effective January 1, 2022, RSV plasma purchased

from these two plasma collection centers are subject to the pricing terms in effect for RSV plasma purchased from other plasma

collection centers owned by Grifols.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On June 6, 2017, the Company and BPC entered into a Plasma Supply Agreement pursuant to which BPC supplies, on an

19 unchanged sentences

Purchase Agreement to Grifols, effective January 1, 2019.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Effective as of May 12, 2021, the Company and Grifols amended the foregoing 2017 Plasma Purchase Agreement whereby, among other things, the term of the agreement was

1 unchanged sentence

In order to maintain a reliable supply of raw material plasma thereafter, the Company has executed additional agreements with multiple third-party suppliers

of NSP to supplement the 2017 Plasma Purchase Agreement, and the Company has also increased its number of planned plasma collection center buildouts and is continuing to increase its plasma collection capabilities at its ADMA BioCenters

of NSP to supplement the 2017 Plasma Purchase Agreement.

The Company has also increased its number of planned plasma collection center buildouts such that the Company expects to have 10 FDA-approved plasma collection centers in operation by the end of 2023, while also continuing to increase its plasma collection capabilities at its ADMA BioCenters

plasma collection centers business segment.

The Company purchases substantially all of its raw material plasma from Grifols.

For the nine months ended September 30,

For the three months ended March 31,

2022, plasma purchases from Grifols totaled $ 15.5 million, or approximately 75 % of the Company’s total inventory purchases.

For the nine months ended September 30, 2020, plasma purchases from Grifols totaled approximately $ 13.8 million, representing approximately 66 %

For the three months ended March 31, 2021, plasma purchases from Grifols totaled approximately $ 12.7 million, representing approximately 72 %

of the Company’s total inventory purchases.

5 unchanged sentences

ADMA has assumed the remaining obligations, and the costs of the studies will be expensed as incurred as research and development

The Company currently expects both studies to be completed by June of 2023.

The Company currently expects to incur expenses of approximately $ 3.0 million to $ 4.0 million to complete these studies, with both studies to be completed by June of 2023.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In connection with the FDA’s approval of ASCENIV on April 1, 2019, the Company is required to perform a pediatric study

to evaluate the safety and efficacy of ASCENIV in children and adolescents.

This study is required to be completed by June of 2023.

The Company expects to incur expenses of approximately $ 2

million to complete this study, which is required to be completed by June of 2023.

Employment Contracts

The Company has entered into employment agreements with its executive management team consisting of its President and

Chief Executive Officer, its Executive Vice President and Chief Financial Officer and its former Executive Vice President, Chief Medical Officer and Chief Scientific Officer (see Note 9).

The Company has entered into employment agreements with Mr.

Grossman and with Brian Lenz, its Executive Vice President,

Chief Financial Officer and General Manager, ADMA BioCenters.

Other Commitments

18 unchanged sentences

The Company’s maximum exposure under these arrangements is

unknown as of September 30, 2021.

unknown as of March 31, 2022.

The Company does not anticipate recognizing any significant losses relating to these arrangements.

The Company is engaged in the manufacture, marketing and development of specialty plasma-derived

The Company’s ADMA BioManufacturing segment reflects the Company’s immunoglobulin manufacturing, commercial and development operations in Boca Raton, FL, acquired on June 6, 2017 (see Note 1).

The Plasma Collection Centers

segment as of September 30, 2021 consists of nine plasma collection facilities in various

stages of approval and development located throughout the U.S., three of which hold an approved license with the FDA .

Corporate segment includes general and administrative overhead expenses.

The Company defines its segments as those business units whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to analyze

performance and allocate resources.

The Company’s CODM is its President and Chief Executive Officer.

financial information concerning reportable segments is shown in the following tables:

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended September 30, 2021

BioManufacturing

Plasma Collection

Cost of product revenue

Loss from operations

Interest and other income (expense), net

Depreciation and amortization expense

Three Months Ended September 30, 2020

BioManufacturing

Plasma Collection

Cost of product revenue

Loss from operations

Interest and other expense, net

Depreciation and amortization expense

The Company is engaged in the manufacture, marketing and development of specialty plasma-derived biologics.

Company’s ADMA BioManufacturing segment reflects the Company’s immunoglobulin manufacturing, commercial and development operations in Boca Raton, FL, acquired on June 6, 2017 (see Note 1).

The Plasma Collection Centers segment as of March 31,

2022 consists of ten plasma collection facilities in various stages of approval and development

located throughout the U.S., five of which hold an approved license with the FDA .

The Corporate segment includes general and

administrative overhead expenses.

The Company defines its segments as those business units whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to analyze performance and allocate resources.

The Company’s

CODM is its President and Chief Executive Officer.

Summarized financial information concerning reportable segments is shown in the following tables:

ADMA BIOLOGICS, INC.

1 unchanged sentence

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

BioManufacturing

3 unchanged sentences

Interest and other expense, net

Loss on extinguishment of debt

Capital expenditures

Depreciation and amortization expense

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

BioManufacturing

6 unchanged sentences

Net revenues according to geographic area, based on the location of where the product is shipped, is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

United States

1 unchanged sentence

Total revenues

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LEASE OBLIGATIONS

3 unchanged sentences

material residual value guarantees or material restrictive covenants.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company determines if an arrangement is an operating lease at inception.

8 unchanged sentences

Aggregate lease expense for the Company’s leases for

the three months ended September 30, 2021 and 2020 was approximately $ 0.4 million and $ 0.2 million, respectively.

Aggregate lease expense for the nine months ended September 30, 2021 and 2020 was approximately $ 1.0 million and $ 0.4 million, respectively.

Cash paid for the

Company’s leases for the three months ended September 30, 2021 and 2020 was approximately $ 0.3 million and $ 0.1 million, respectively.

Cash paid for the Company’s leases for the nine months ended September 30, 2021 and 2020 was approximately $ 0.7 million and $ 0.3 million,

respectively.

During the nine months ended September 30, 2021, the Company recognized additional right to use assets and

corresponding lease liabilities of $ 2.8 million in connection with three new property leases where the Company has opened or intends to open additional plasma collection facilities.

Including a finance lease the Company entered into in June 2018, the

Company has aggregate lease liabilities of $ 7.4 million and $ 4.7 million as of September 30, 2021 and December 31, 2020, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers and an administrative

office lease related to the Company’s ADMA BioCenters subsidiary.

The Company’s operating leases have a weighted average remaining term of 9.1

the three months ended March 31, 2022 and 2021 was approximately $ 0.4 million and $ 0.3 million, respectively.

Cash paid for the Company’s leases for the three months ended March 31, 2022 and 2021 was approximately $ 0.4 million and $ 0.2 million, respectively.

Including a finance lease the Company entered into in June 2018, the Company has aggregate lease

liabilities of $ 7.9 million and $ 8.1

million as of March 31, 2022 and December 31, 2021, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers and an administrative office lease related to the Company’s ADMA BioCenters subsidiary.

The Company’s operating leases have a weighted average remaining term of 8.9 years.

Scheduled payments under the Company’s lease obligations are as follows:

4 unchanged sentences

Current portion

Balance at September 30, 2021

On June 11, 2021, t he Company entered into an additional property lease that the

Company intends to use to store certain inventory for its ADMA BioManufacturing business segment.

The Company has not taken possession of this leased property and its lease commencement date has not been determined.

With the exception

of a security deposit and six months’ rent totaling $ 0.3 million, no payments have been made under this lease.

The initial term of the lease is for 90

months with monthly rental payments varying between approximately $ 14,000 and $ 24,000 , including common area maintenance charges.

On October 8, 2021, the Company entered into an additional property lease for its eight h plasma collection facility.

Balance at March 31, 2022

During the three months ended March 31, 2022, t he Company entered into an additional property lease for its ninth plasma collection facility.

The Company has not taken possession of this leased property and its lease commencement date has not been

With the exception of a security deposit and an initial months’ rent totaling approximately $ 44,000 , no payments have been made under this lease.

The initial term of the

lease is for 137 months with monthly rental payments

varying between approximately $ 9,000 and $ 12,000 , including common area maintenance charges.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The initial term of the lease is for 126 months with monthly rental payments varying between approximately $ 18,000

and $ 24,000 , including common area maintenance charges .

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Supplemental cash flow information for the nine months ended September 30, 2021 and 2020 is as follows:

Supplemental cash flow information for the three months ended March 31, 2022 and 2021 is as follows:

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

Non-cash Financing and Investing Activities:

Noncash Financing and Investing Activities:

Equipment acquired reflected in accounts payable and accrued liabilities

Right-to-use assets in exchange for lease obligations

SUBSEQUENT EVENTS

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

Net proceeds after underwriting discounts and expenses associated with the offering, were approximately $ 53.9 million.

The Company intends to

use the net proceeds from this offering (i) to advance the commercial sales of its FDA approved products through the procurement of raw materials for the manufacturing of BIVIGAM and ASCENIV;

(ii) to expand its plasma collection facility

Warrants issued in connection with notes payable

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

The following discussion of our financial condition and results of operations, which refers to our historical results, should be read in conjunction with the other sections of this Quarterly

Report on Form 10-Q, including “Risk Factors” and our unaudited consolidated financial statements and the notes thereto appearing elsewhere herein, and in conjunction with the Management’s Discussion and Analysis of Financial Condition and

Results of Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 24, 2022 (the “2021 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 affected by the uncertainties and risk factors described throughout or referenced within this Quarterly Report on Form 10-Q.

See “Special Note Regarding Forward-Looking Statements.” Our

actual results may differ materially from our current expectations.

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.

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.

We seek to develop a pipeline of plasma-derived

therapeutics, including a product based on our most recently approved patent application under U.S.

10,259,865 related to methods of treatment and prevention of S.

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, plasma fractionation and purification facility located in Boca Raton, Florida with a peak annual source plasma processing capability of up to 600,000 liters (the

“Boca Facility”).

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

to generate 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 years.

Based on our early 2022 revenue growth and gross margin trends, we have increased our total annual revenue target to $130 million or more for fiscal year 2022.

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 seven 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 2021 and thus far in 2022 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.

where we are approved under supply agreements or in the open “spot” market.

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 packaging services in light of the FDA approval of

our in-house fill-finish capabilities.

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 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.

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.

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.

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 re-launch and commercialize 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.

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

The commercial re-launch and first commercial sales for this product commenced 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.

this increased IVIG plasma pool scale, which will allow us to produce BIVIGAM at an expanded capacity, will utilize the same equipment, release testing assays and labor force, and to have a favorable impact on our gross margins and operating

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.

We manufacture ASCENIV under HHS License No.

2019 using a process known as fractionation.

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

Under 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.

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).

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.

Due to the COVID-19 pandemic, our plans have been

In the future however, we plan to work with the FDA and the immunology and infectious disease community to design an appropriate clinical trial to evaluate the use of ASCENIV in this patient population.

Commercial sales of ASCENIV

commenced in October of 2019.

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.

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.

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.

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.

POTENTIAL IMPACT OF COVID-19

We continue to monitor the ongoing developments related to the COVID-19 pandemic, including the emergence of the Delta, Omicron and BA.2 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 had

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.

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 three months ended March 31, 2022 and 2021, our revenue attributable to international customers was approximately 6% and 15%, respectively, 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, or any known or future variant or

government order, 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 condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues

and expenses.

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.

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 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 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 in the 2021 10-K.

Estimates and assumptions used in projecting future liquidity and capital requirements are

described in Note 1 to the condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q.

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

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.

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

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.

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.

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.

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

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.

For the three months ended March 31, 2022 and 2021, 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.

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 three months ended March 31,

2022 and 2021.

Deferred Tax Assets

We maintain 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.

This 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.

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.

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

The following table presents a summary of the changes in our results of operations for the three months ended March 31, 2022, our first fiscal quarter, compared to the three months ended March

Three Months Ended March 31,

Increase (Decrease)

Cost of product revenue

Gross profit (loss)

Research and development expenses

Plasma center operating expenses

Amortization of intangibles

Selling, general and administrative expenses

Loss from operations

Interest expense

Loss on extinguishment of debt

Other expense, net

We recorded total revenues of $29.1 million during the three months ended March 31, 2022, as compared to $16.0 million during the three months ended March 31, 2021, an increase of $13.1 million, or approximately 81%.

The increase is due to increased sales of immunoglobulin products generated by our Boca Facility manufacturing operations in 2022, primarily ASCENIV and BIVIGAM, of $12.3 million, as we continue to expand our customer base for BIVIGAM and

experience increased physician, payer and patient acceptance of ASCENIV.

We also benefitted from an increased sales of normal source plasma through ADMA BioCenters of $0.7 million.

Cost of Product Revenue and Gross Profit

Cost of product revenue was $25.4 million for the three months ended March 31, 2022, as compared to $17.8 million for the three months ended March 31, 2021.

This increase is primarily attributable to increased

product revenue costs related to the sale of our immunoglobulin products of $5.2 million and increased product revenue costs related to our ADMA BioCenters business segment in the amount of $0.9 million.

The increase also reflects additional

costs related to the otherwise routine shutdown of the Boca Facility for a portion of the first quarter of 2022, which we elected to extend in order to complete certain projects that had been forecasted for completion later in fiscal 2022.

For the three months ended March 31, 2022, we had gross profit of $3.7 million, as compared to a gross loss of $1.7 million for the same period of a year ago.

This gross profit improvement of $5.4 million was

primarily due to a more favorable mix of our higher margin products, notably ASCENIV, as well as the benefits we have begun to realize from our expanded plasma pool production scale process, allowing for a 4,400-liter plasma pool for the

manufacture of our BIVIGAM IVIG product, as compared to a 2,200-liter plasma pool we were utilizing with BIVIGAM prior to receiving FDA approval in 2021 for the expanded production scale.

Research and Development Expenses

R&D expenses totaled $0.6 million for the three months ended March 31, 2022, as compared to $1.0 million for the three months ended March 31, 2021.

The decrease is primarily due to reduced compensation costs,

including stock-based compensation, associated with R&D activities due to the resignation of our former Chief Medical and Scientific Officer in the second quarter of 2021 .

Plasma Center Operating Expenses

During the first quarter of 2022, we had six plasma collection centers in operation, excluding our seventh plasma collection center that opened on March 29, 2022, as compared to three plasma collection centers in

operation during the first quarter of 2021.

As a result, plasma center operating expenses increased by $1.7 million in the first quarter of 2022 as compared to the same period of a year ago.

The increase is mainly comprised of higher donor fees

in the amount $2.1 million, employee compensation and benefits of $1.3 million, softgoods and supplies of $0.7 million, donor testing expenses of $0.4 million, depreciation expense of $0.2 million, advertising expenses of $0.1 million and rent of

$0.1 million, partially offset by increased donor collections which had the impact of reducing our operating expenses by $3.4 million, as such expenses were charged to inventory for future manufacturing or sales.

As we continue our planned

expansion with the goal of having ten plasma collection centers licensed by the FDA by the end of 2023, we expect our plasma center operating expenses to continue to increase.

Amortization of Intangibles

Amortization expense pertains to the amortization of intangible assets acquired in the Biotest Transaction and was $0.2 million for the three months ended March 31, 2022 and 2021.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $13.7 million for the three months ended March 31, 2022, an increase of $3.7 million from the three months ended March 31, 2021.

The increase reflects

$1.3 million of professional fees incurred in connection with our strategic alternatives process in 2022 with no comparable amount in 2021.

In addition, we had an increase in employee compensation and related expenses, including travel,

relocating and recruiting, in the amount of $2.4 million due to increased headcount associated with the overall size and scope of the organization and the stepped-up commercialization efforts for BIVIGAM and ASCENIV, increased insurance expense

of $0.3 million and increased software maintenance fees of $0.2 million.

These costs were partially offset by $0.5 million of third-party market intelligence fees for a one-time project related to ASCENIV that concluded in the first quarter of

Loss from Operations

Our operating loss was $14.8 million for the first quarter of 2022, as compared to $15.2 million for the first quarter of 2021.

The $0.4 million decrease in operating loss was mainly due to the improved gross profit

of $5.4 million and lower R&D expenses, largely offset by the increases in plasma center operating expenses and SG&A.

Interest Expense

The increase in interest expense of $0.2 million for the three months ended March 31, 2022 as compared to the same period of a year ago was mainly due to higher amortization of debt discount related to our new senior

credit facility.

(see “Liquidity and Capital Resources”).

Loss on Extinguishment of Debt

On March 23, 2022, we refinanced our senior credit facility (see “Liquidity and Capital Resources”).

In connection with this transaction, we incurred a loss on the extinguishment of debt in the amount of $6.7 million

as a result of the redemption premium we paid to retire our previously existing credit facility in the amount of $2.0 million, and the write-off of unamortized debt discount of $4.7 million related to that facility.

Our net loss was $25.0 million for the three months ended March 31, 2022, as compared to $18.4 million for the three months ended March 31, 2021.

The $6.6 million increase in net loss was primarily due to the loss on

extinguishment of debt in 2022 of $6.7 million, with no comparable amount in 2021.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2022, we had working capital of $208.2 million, primarily consisting of $139.1 million of inventory, cash and cash equivalents of $69.5 million and accounts receivable of $25.6 million, partially offset

by accounts payable and accrued expenses of $30.8 million, as compared to 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 of December 31, 2021.

We have incurred an accumulated deficit of $437.1 million since inception, had negative cash flows from operations of $26.0 million and $33.2

million for the three months ended March 31, 2022 and 2021, respectively, 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.

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

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.

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 efforts with respect to the sale 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 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”).

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

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 $0.6 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 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 Margin”);

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.

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 $1.1 million per month or $3.2 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 are 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, 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;

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 Hayfin Credit

change our fiscal year;

pay dividends;

repay other certain indebtedness;

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 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;

(iv) to explore business development opportunities;

and (v) for general corporate purposes and

other capital expenditures.

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.

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

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

Three Months Ended March 31,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

Cash and cash equivalents - beginning of year

Cash and cash equivalents - end of period

Net Cash Used in Operating Activities

Cash used in operations for the three months ended March 31, 2022 was $26.0 million, a decrease of $7.2 million from the same period of a year ago, mainly due to reductions in accounts receivable and prepaid expenses

and other current assets.

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

Three Months Ended March 31,

Non-cash expenses, gains and losses

Changes in accounts receivable

Changes in inventories

Changes in prepaid expenses and other current assets

Changes in accounts payable and accrued expenses

Cash used in operations

Net Cash Used in Investing Activities

Net cash used in investing activities for the three months ended March 31, 2022 and 2021 was $2.8 million and $2.6 million, respectively, consisting of capital expenditures for the construction and buildout of new

plasma collection centers and related equipment and capital expenditures at the Boca Facility.

We expect our total capital expenditures will be between $8.0 million and $12.0 million for the remainder of fiscal 2022, mainly for continued plasma

collection center expansion.

Net Cash Provided by Financing Activities

Cash provided by financing activities of $47.3 million for the three months ended March 31, 2022 and primarily consisted of proceeds received from the Hayfin Credit Facility, net of payments to retire our previously

existing credit facility with Perceptive.

Cash provided by financing activities of $41.8 million for the three months ended March 31, 2021 was mainly comprised of net proceeds received from the issuance of our common stock (see Note 8 to the

Consolidated Financial Statements).

Effect of Inflation

Although inflation or changing prices did not have a significant impact on our revenues or net loss for the year ended December 31, 2020 or the three months ended March 31, 2021, inflation did impact a number of

facets of our business during the year ended December 31, 2021 and the first three months of 2022 at both of our business segments.

We experienced price increases for, among other items, certain raw materials, consumable supplies, services for

repairs and maintenance of our facilities, shipping and freight charges and labor costs.

We expect this trend to continue at least into the second half of 2022, which could have a significant impact on our future results of operations.

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 has resulted in and is expected to continue to

result in higher source plasma costs in 2022 and future periods.

Off-Balance Sheet Arrangements

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

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-Q

Item 1. Financial Statements