What changed in this filing

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Item 1. Financial Statements

2022-08-10 compared with 2022-05-11 · 282 added, 683 removed, 560 unchanged (63% of the section changed)

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED

BALANCE SHEETS

Current assets:

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Product revenue

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

For the Three Months Ended March 31, 2022

For the Three and Six Months Ended June 30, 2022

Stockholders’

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( 437,120,578

For the Three Months Ended March 31, 2021

Stock-based compensation

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

Balance at June 30, 2022

( 450,885,484

For the Three and Six Months Ended June 30, 2021

Stockholders’

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( 358,845,044

Stock-based compensation

Issuance of common stock, net of offering expenses

Balance at June 30, 2021

( 377,750,347

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

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

CONDENSED CONSOLIDATED STATEMENTS OF

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Loss on disposal of fixed assets

Interest paid in kind

Stock-based compensation

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Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents - beginning of year

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents - beginning of period

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

(“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.

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.

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., six of which hold an approved license with the FDA, with two additional collection facilities in operation and collecting plasma presently under FDA licensing preparation and review and another two facilities under construction.

The Company has three FDA-approved products, 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 the Company 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 the Company 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 Hepatitis B surface antigen (“HBsAg”) and other listed exposures to Hepatitis B.

In addition to its commercially available immunoglobulin

products, the Company provides contract manufacturing and laboratory services for certain clients and generates revenues from the sale of intermediate by-products that result from the immunoglobulin production process.

The Company seeks to

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 March 31, 2022, the

(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 the Company received FDA approval on May 9, 2019 and commenced commercial sales in August

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

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

In addition to its commercially

available immunoglobulin products, the Company provides contract manufacturing and laboratory services for certain clients and generates revenues from the sale of intermediate by-products that result from the immunoglobulin production process.

The Company seeks to 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 June 30, 2022, the

Company had working capital of $ 194.7 million, including $ 52.4 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, 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.

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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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.

assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of June 30, 2022, its results of operations and changes in stockholders’ equity for the three and six months ended

June 30, 2022 and 2021 and cash flows for the six months ended June 30, 2022 and 2021.

During the three and six months ended June 30 , 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.

Operating results for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year.

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the amount of $ 0.1 million and $ 0.2

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.

Based on these evaluations, the Company has concluded that its

credit risk is minimal.

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.

million at June 30 , 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.

Based on these evaluations, the Company has concluded that its credit risk is minimal.

At June 30 , 2022, three customers accounted for an aggregate of 84 % 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.

ADMA BIOLOGICS, INC.

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

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

at June 30, 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 months

ended March 31, 2022 and 2021.

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 six months

ended June 30, 2022 and 2021.

Impairment of Long-Lived Assets

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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.

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

six months ended June 30 , 2022 and 2021, the Company

determined that there was no impairment of its long-lived assets.

Revenue Recognition

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;

Revenues for the three and six months ended June 30 , 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.

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.

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Product revenues are recognized at the time of delivery if the Company retains control of the product during shipment.

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.

For the six months ended June 30 , 2022, two customers represented an aggregate of 73 % of the Company’s consolidated revenues.

For the six months ended June 30 , 2021, five customers represented an aggregate of 85 % of the Company’s consolidated revenues.

Cost of Product Revenue

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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 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,

options and warrants, using the treasury stock method, as well as Restricted Stock Units (“RSUs”).

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 six months ended June 30 , 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 Six Months Ended June 30,

Stock options

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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 2017 and for previous periods as it relates to the Company’s net operating loss

carryforwards.

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.

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

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.

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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.

has determined that it has not incurred any liability for unrecognized tax benefits as of June 30 , 2022 and December 31, 2021, and during the three and six months ended June 30, 2022 and 2021, the Company recognized no adjustments for uncertain tax positions.

The following table provides the components of inventories:

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INTANGIBLE ASSETS

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

March 31, 2022

Intangible assets at June 30, 2022 and December 31, 2021 consist of the following:

June 30, 2022

December 31, 2021

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Amortization expense

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:

related to these intangible assets was $ 0.4 million for the six months ended June 30, 2022 and 2021 and $ 0.2 million for the three months ended June 30, 2022 and 2021.

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

Remainder of 2022

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Property and equipment and related accumulated depreciation are summarized as

March 31, 2022

June 30, 2022

December 31, 2021

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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.

months ended June 30, 2022 and 2021 of $ 1.5 million and $ 1.1 million, respectively, and for the six months

ended June 30, 2022 and 2021 of $ 3.0 million and $ 2.2 million, respectively.

ADMA BIOLOGICS, INC.

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

March 31, 2022

Accrued expenses and other current liabilities at June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022

December 31, 2021

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A summary of outstanding senior notes payable is as follows:

March 31, 2022

June 30, 2022

December 31, 2021

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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 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).

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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 %

Borrowings under the Hayfin Credit Agreement 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 % per annum.

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.

The rate of interest in effect as of the

Hayfin Closing Date and through June 30, 2022 was 10.75 %.

The Company is also permitted to 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 is added

to the principal amount of the outstanding debt under the Hayfin Credit Facility.

From the Hayfin Closing Date through June 30, 2022, approximately $ 1.0

million of interest was paid in kind and added to the balance of the outstanding Hayfin Loans.

ADMA BIOLOGICS, INC.

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This exit fee is recorded

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

separately as a non-current liability on the accompanying condensed consolidated balance sheet as of June 30, 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.

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 also required to pay the exit fee.

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

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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.

quarter ended 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 ended June 30, 2022 to $ 250.0

million for the fiscal quarter ended December 31, 2026.

As of June 30, 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

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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 .

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

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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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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

There were no shares of preferred stock outstanding at June 30, 2022 and December 31, 2021.

As of June 30, 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 196,356,232 and 195,813,817

shares of common stock were outstanding as of June 30, 2022 and December 31, 2021, respectively.

After giving effect to the 50,523,424

shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of June 30, 2022 there were 53,120,344 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 o f $ 50 million of

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

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.

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.

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

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 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

The fair value of stock options granted under the Company’s 2007 Employee Stock Option Plan (the “2007

Plan”) and the ADMA Biologics, Inc.

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 estimate.

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

were no sales under the Distribution Agreement during the six months ended June 30, 2022.

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.

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

During the six months ended

June 30, 2021, the Company issued and sold 26,907,753 shares of common stock under the Sale Agreement and received net proceeds of $ 59.1 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 %.

During the six months ended June 30, 2022, outstanding warrants to purchase 74,309 shares of the Company’s common stock expired in

accordance with the terms of the warrants.

At June 30, 2022, the Company had outstanding warrants to purchase an aggregate of 13,556,898

shares of common stock, with a weighted-average exercise price of $ 2.00 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.

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31,

Equity Incentive Plans

The fair value of stock options granted under the ADMA Biologics, Inc.

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 estimate.

The following assumptions were used to determine the fair value of options granted during the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

Expected term

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Risk-free interest rate

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:

On June 21, 2022, the Company’s stockholders approved the ADMA Biologics, Inc.

2022 Compensation Plan (the “2022 Equity

Approval of the 2022 Equity Plan resulted in approximately 18 million additional shares of the Company’s common stock being

reserved for future awards.

During the six months ended June 30, 2022 and 2021, the Company granted options to purchase an aggregate of 1,194,032

and 1,658,050 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 June 30, 2022 is 6.5 years.

The weighted average remaining contractual life

of stock options exercisable at June 30, 2022 is 5.4 years.

A summary of the Company’s option activity under the Company’s equity incentive plans and related information is as

Exercise Price

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

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

Options outstanding, vested and expected to vest at June 30, 2022

Options exercisable

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 .

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

Date Fair Value

Balance at December 31, 2021

Balance at March 31, 2022

As of June 30, 2022, the Company had $ 3.3 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 2.4 years.

During the six months ended June 30, 2022 and 2021, the Company granted RSUs representing an aggregate of 1,109,266 and 542,244 shares,

respectively, to certain management employees of the Company and to members of its Board of Directors .

These RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors.

Du ring the six months ended June

30, 2022, there were 812,016 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 six

months ended June 30, 2022.

With respect to the vested RSUs, 269,601

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 June 30, 2022.

A summary of the Company’s unvested RSU activity and

related information is as follows:

ADMA BIOLOGICS, INC.

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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

Average Grant

Date Fair Value

Balance at December 31, 2021

Balance at June 30, 2022

As of June 30, 2022, the Company had $ 5.1 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 ended March 31, 2022 and 2021 is as follows:

Three Months Ended March 31,

and six months ended June 30, 2022 and 2021 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

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 three months ended March 31, 2022 and 2021 amounted to $ 30,000 .

Rent expense for the six months ended June 30, 2022 and 2021 amounted to $ 60,000 .

Areth is a company controlled by Dr.

Grossman, the Vice Chairman of the Company’s Board of Directors, and Adam S.

Grossman, the Company’s President and

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 condensed consolidated financial statements for the

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

Grossman, the Company’s President and Chief Executive

months ended June 30, 2022 and 2021.

During the six months ended June 30, 2022 and 2021, the Company purchased certain

Genesis is owned by Dr.

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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.

transactions with Perceptive, a holder of more than 5 % of the Company’s common stock during the six months ended June 30, 2022.

COMMITMENTS AND CONTINGENCIES

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been performed by contract laboratories outside the United States.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Due to a combination of previous state and local “shelter-in-place” orders, as well as government stimulus packages,

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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 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

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 six months ended June 30, 2022 and 2021, revenue attributable to international customers was

approximately 7 % and 14 %,

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As a result, the Company does not anticipate and has not experienced any material impairments with respect to any of its long-lived assets, including the Company’s property and equipment, goodwill or intangible assets.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Although the COVID-19 pandemic has not, to date, materially adversely impacted the Company’s capital and financial

resources, because the Company is 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 the Company’s

workforce, customers or our suppliers, at this time the Company is unable to predict whether COVID-19 will have a material adverse impact on the Company’s business, financial condition, liquidity and results of operations.

resources, because the Company is unable to determine the ultimate severity or duration of the COVID-19 pandemic or other pandemics or their long-term effects on, among other things, the global, national or local economies, the capital and

credit markets or the Company’s workforce, customers or our suppliers, at this time the Company is unable to predict whether COVID-19 or other pandemics will have a material adverse impact on the Company’s business, financial condition,

liquidity and results of operations.

Vendor Commitments

44 unchanged sentences

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

The Company has also increased its number of planned plasma collection center buildouts such that the Company expects to have ten 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 three months ended March 31,

For the six months ended June 30, 2022,

plasma purchases from Grifols totaled $ 22.8 million, or approximately 66 % of the Company’s total inventory purchases.

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

For the six months ended June 30, 2021, plasma purchases from Grifols totaled approximately $ 17.5 million, representing approximately 67 %

of the Company’s total inventory purchases.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Post-Marketing Commitments

5 unchanged sentences

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

19 unchanged sentences

The first tranche was paid to employees on September 30, 2021 in the amount of $ 1.3 million, and the second tranche aggregating to approximately $ 1.3

million will be paid on June 15, 2022.

Based on the terms of the retention agreements the Company entered into with each applicable executive and employee, $ 0.8 million of the first tranche is being recognized over the retention service period, which ends on December 31, 2022, with the remainder having been recognized as expense on September 30, 2021.

tranche will be recognized as compensation expense over a 15-month period from October 1, 2021 through December 31, 2022.

million was paid on June 15, 2022.

Based on the terms of the retention agreements the Company entered into with each applicable executive and employee, approximately $ 0.8 million of each tranche is being recognized over the retention service period, which began on October 1, 2021 and ends on December 31, 2022, with the remainder having

been recognized as expense when paid.

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its

2 unchanged sentences

The Company’s maximum exposure under these arrangements is

unknown as of March 31, 2022.

unknown as of June 30, 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 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.

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 June 30, 2022 consists of ten plasma collection facilities located throughout the

U.S., six of which hold FDA licenses, with two additional plasma collection centers in operation and collecting plasma and the remaining two

facilities under construction .

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:

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

BioManufacturing

3 unchanged sentences

Interest and other expense, net

Depreciation and amortization expense

Three Months Ended June 30, 2021

BioManufacturing

Plasma Collection

Cost of product revenue

Loss from operations

Interest and other expense, net

Depreciation and amortization expense

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2022

BioManufacturing

Plasma Collection

Cost of product revenue

Loss from operations

Interest and other expense, net

Loss on extinguishment of debt

1 unchanged sentence

Depreciation and amortization expense

Three Months Ended March 31, 2021

Six Months Ended June 30, 2021

BioManufacturing

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

United States

1 unchanged sentence

Total revenues

LEASE OBLIGATIONS

The Company leases certain properties and equipment for its ADMA BioCenters subsidiary and certain equipment for its ADMA

BioManufacturing subsidiary, which leases provide the right to use the underlying assets and require lease payments through the respective lease terms which expire at various dates through 2032.

The Company’s lease agreements do not contain any

material residual value guarantees or material restrictive covenants.

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LEASE OBLIGATIONS

The Company leases certain properties and equipment for its ADMA BioCenters and ADMA BioManufacturing subsidiaries, which

leases provide the right to use the underlying assets and require lease payments through the respective lease terms which expire at various dates through 2032.

The Company’s lease agreements do not contain any material residual value guarantees

or material restrictive covenants.

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

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Aggregate lease expense for the Company’s leases for

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.

the three months ended June 30, 2022 and 2021 was approximately $ 0.5 million and $ 0.4 million, respectively.

Aggregate lease expense for the Company’s leases for the six months ended June 30, 2022 and 2021 was approximately $ 0.9 million and $ 0.6 million,

respectively.

Cash paid for the Company’s leases for the three months ended June 30, 2022 and 2021 was approximately $ 0.4 million and

$ 0.6 million, respectively.

Cash paid for the Company’s leases for the six months ended June 30, 2022 and 2021 was approximately $ 0.8 million.

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

liabilities of $ 11.5 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.

million as of June 30, 2022 and December 31, 2021, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers and a warehouse lease for raw material storage related to the Company’s immunoglobulin

manufacturing operations.

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

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

Scheduled payments under the

Company’s lease obligations are as follows:

Remainder of 2022

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Current portion

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 126 months with monthly rental payments varying between approximately $ 18,000

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

Balance at June 30, 2022

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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

Supplemental cash flow information for the six months ended June 30, 2022 and 2021 is as follows:

SUPPLEMENTAL CASH FLOW INFORMATION:

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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;

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