What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-10 · 265 added, 214 removed, 628 unchanged (43% of the section changed)

4 unchanged sentences

BALANCE SHEETS

September 30,

Current assets:

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STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Product revenue

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STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended June 30, 2022

STOCKHOLDERS’ EQUITY (Unaudited)

For the Three and Nine Months Ended September 30, 2022

Stockholders’

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( 450,885,484

For the Three and Six Months Ended June 30, 2021

Stock-based compensation

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

Balance at September 30, 2022

( 465,784,988

For the Three and Nine Months Ended September 30, 2021

Stockholders’

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( 377,750,347

Stock-based compensation

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

Issuance of common stock, net of offering expenses

Balance at September 30, 2021

( 395,463,301

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

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CONDENSED CONSOLIDATED STATEMENTS OF

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents - beginning of period

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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.

collection business with ten plasma collection facilities in

various stages of approval and development located throughout the U.S., seven 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 facility under construction.

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

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(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.

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.

risk for certain infectious diseases.

As of September 30, 2022, the Company had working capital of $ 179.7 million, including $ 34.9 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 additional proceeds

available 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.

Depending on the cost of capital, the Company may decide to raise capital through

public or private equity offerings or debt financings, or may enter into a corporate collaboration or licensing arrangement.

The sale of additional or equity or debt securities, if convertible, could result in dilution to the Company’s

stockholders and, in such event, the value and potential future market price of its common stock may decline.

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 biologics, 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.

Company continues to evaluate a variety of strategic alternatives through its ongoing engagement with Morgan Stanley.

The exploration of value-creating opportunities remains a top corporate priority for ADMA.

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 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

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

ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021.

During the three and nine months ended September 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.

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the amount of $ 0.1 million and $ 0.2

million at June 30 , 2022 and December 31, 2021, respectively, which

are recognized in the period the related revenue is recorded.

million at September 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.

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.

At September 30 , 2022, four customers accounted for an aggregate of 93 % 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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Raw materials inventory consists of various materials purchased from suppliers, including

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

Work-in-process and finished goods inventories (see Note 3) reflect the cost of raw materials as well as costs for direct and indirect labor, primarily salaries, wages

and benefits for applicable employees, as well as an allocation of overhead costs related to the Boca Facility including utilities, property taxes, general repairs and maintenance, consumable supplies and depreciation.

The allocation of Boca

Facility overhead to inventory is generally based upon the estimated square footage of the Boca Facility that is used in the production of the Company’s products relative to the total square footage of the facility.

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

Work-in-process and finished goods inventories (see Note 3) reflect the cost of raw materials as well as costs for direct and indirect labor, primarily

salaries, wages and benefits for applicable employees, as well as an allocation of overhead costs related to the Boca Facility including utilities, property taxes, general repairs and maintenance, consumable supplies and depreciation.

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

Inventories, including plasma intended for resale and plasma intended for internal use in the

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

at June 30, 2022 and December 31, 2021 was $ 3.5 million.

at September 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 six months

ended June 30, 2022 and 2021.

goodwill impairment test as of October 1, 2022 did not result in a goodwill impairment charge, and the Company did no t record any impairment charges related to goodwill for the nine months

ended September 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.

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 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.

nine months ended September 30 , 2022 and 2021, the

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

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

Revenues for the three and nine months ended September 30 , 2022 and 2021 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, BIVIGAM, ASCENIV and Nabi-HB, (ii)

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.

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

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

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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 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.

For the nine months ended September 30 , 2022, two

customers represented an aggregate of 72 % of the Company’s consolidated revenues.

For the nine months ended September

30 , 2021, four customers represented an aggregate of 74 % of the Company’s consolidated revenues.

Cost of Product Revenue

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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

Restricted Stock Units

For the nine months ended September

30 , 2022 and 2021, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects:

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30,

Stock options

Restricted Stock Units

Stock-Based Compensation

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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 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.

has determined that it has not incurred any liability for unrecognized tax benefits as of September 30 , 2022 and December

31, 2021, and during the three and nine months ended September 30, 2022 and 2021, the Company recognized no

adjustments for uncertain tax positions.

The following table provides the components of inventories:

September 30,

Raw materials

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inventories used in research and development activities are expensed as incurred.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Work-in-process inventory primarily consists of bulk drug substance and unlabeled filled vials of the Company’s

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for commercial sale, as well as plasma collected at the Company’s plasma collection centers which is expected to be sold to third-party customers.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INTANGIBLE ASSETS

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

June 30, 2022

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

September 30, 2022

December 31, 2021

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Amortization expense

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:

related to these intangible assets was $ 0.5 million for the nine months ended September 30, 2022 and 2021 and $ 0.2 million for the three months ended September 30, 2022 and 2021.

Estimated future aggregate amortization expense is expected to be as

Remainder of 2022

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Property and equipment and related accumulated depreciation are summarized as

June 30, 2022

September 30, 2022

December 31, 2021

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

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

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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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

months ended September 30, 2022 and 2021 of $ 1.7 million and $ 1.2 million, respectively, and for the nine months

ended September 30, 2022 and 2021 of $ 4.6 million and $ 3.4 million, respectively.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

June 30, 2022

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

September 30, 2022

December 31, 2021

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Accrued testing

Accrued payroll

Accrued payroll and other compensation

Total accrued expenses and other current liabilities

A summary of outstanding senior notes payable is as follows:

June 30, 2022

September 30, 2022

December 31, 2021

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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.

Hayfin Closing Date and as of September 30, 2022 was 10.75 % and approximately 12.1 %, respectively.

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 September 30, 2022, approximately $ 2.0 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 condensed consolidated balance sheet as of June 30, 2022.

separately as a non-current liability on the accompanying condensed consolidated balance sheet as of September 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 also required to pay the exit fee.

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 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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pay dividends;

repay other certain indebtedness;

repay certain other indebtedness;

engage in certain affiliate transactions;

or enter into,

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

In addition, the Company is required (i) at all times prior to the Maturity Date to

maintain a minimum cash balance of $ 6.0 million;

and (ii) as of the last day of each fiscal quarter commencing with the fiscal

quarter 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.

or enter into, amend or terminate any

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

In addition, the Company is required (i) at all times prior to the Maturity Date to maintain a minimum

cash balance of $ 6.0 million;

and (ii) as of the last day of each fiscal quarter, 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 September

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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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 June 30, 2022 was approximately 13.0 %.

ADMA BIOLOGICS, INC.

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Preferred Stock

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

There were no shares of preferred stock outstanding at 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.

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

value per share.

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

As of September 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 196,776,871 and 195,813,817 shares of common stock were outstanding as of September 30, 2022 and December 31, 2021, respectively.

After giving effect to the 49,951,243 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of September 30, 2022

there were 53,271,886 shares of common stock available for issuance.

On September 3, 2021, the Company

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available to sell under the Distribution Agreement.

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

There were no sales under the Distribution Agreement during the nine months ended September 30, 2022.

During the nine months ended September 30, 2021, the Company issued 5,540,831 shares of

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

On 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

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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.

The Sale Agreement was

terminated on August 31, 2021.

During the nine months ended September 30, 2021, the Company issued and sold 27,805,198 shares of

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

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

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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

During the nine months ended September 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 September 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.

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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,

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

Nine Months Ended September 30,

Expected term

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Risk-free interest rate

1.72 - 1.73 %

0.80 - 1.14 %

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

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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

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

and 1,757,050 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.

of stock options outstanding and expected to vest at September 30, 2022 is 6.3 years.

The weighted average remaining contractual

life of stock options exercisable at September 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

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

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

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

Options exercisable

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.

As of September 30, 2022, the Company had $ 2.8 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 2.3 years.

During the nine months ended September 30, 2022 and 2021, the Company granted RSUs representing an aggregate of 1,119,266 and 4,332,244 shares, respectively, to certain management employees of the Company and to members of its Board of Directors.

Except for the RSUs granted

under the Company’s retention incentive program discussed below, these RSUs generally vest annually over a period of four years for

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

On September 28, 2021, the Company implemented a retention

incentive program for the Company’s executive management and certain employees (see Note 10), whereby the Company issued an aggregate of 3,780,000

RSUs, of which 2,632,500 are time-based RSUs and 1,147,500 are milestone-based RSUs.

Fifty percent of the time-based RSUs

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

The milestone-based RSUs vest upon achievement of the applicable milestone, and all of the

milestone-based RSUs vested during the nine months ended September 30, 2022.

During the nine months ended September 30, 2022, an aggregate of 1,409,912

shares of common stock vested in connection with grants of RSUs, including all of the milestone-based RSUs.

With respect to the vested RSUs, 446,858

shares valued at approximately $ 0.8 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:

These shares have been

retired by the Company or otherwise made available again for issuance under the 2022 Equity Plan and were no longer outstanding as of September 30, 2022.

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

ADMA BIOLOGICS, INC.

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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.

Balance at September 30, 2022

As of September 30, 2022, the Company had $ 4.2 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 2.6 years.

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

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

Three Months Ended June 30,

Six Months Ended June 30,

and nine months ended September 30, 2022 and 2021 is as follows:

Three Months Ended September 30,

Nine Months Ended September 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 six months ended June 30, 2022 and 2021 amounted to $ 60,000 .

Rent expense for the nine months ended September 30, 2022 and 2021 amounted to $ 90,000 (see Note 14).

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

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 and six

months ended June 30, 2022 and 2021.

During the six months ended June 30, 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”), aggregating to $ 0.1 million.

Grossman, the Company’s

President and Chief Executive Officer.

statements for the three and nine months ended September 30, 2022 and 2021.

During the nine months ended September 30, 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”), aggregating to $ 0.1 million.

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 during the six months ended June 30, 2022.

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

During the nine months ended September 30,

2021, in connection with the resignation of Dr.

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

Such payments were made in scheduled installments over a period of 10 months.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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,

persisting social distancing measures and varying roll-outs of vaccinations by state, the Company has experienced lower than normal donor collections at its FDA approved plasma collection centers.

persisting social distancing measures and varying roll-outs of vaccinations by state, the Company was experiencing lower than normal donor collections at its FDA approved plasma collection centers.

The Company was also subject to delays in

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

The COVID-19 pandemic has also impacted, to a certain degree, the Company’s customer engagement initiatives, whereby ADMA’s sales and medical affairs field personnel have

faced difficulties communicating directly with physicians and other healthcare professionals, as well as the cancellation or postponement of a number of key scientific and medical meetings, further limiting the Company’s ability to communicate

with potential customers.

The Company has implemented a comprehensive suite of virtual engagement initiatives;

however, clinician engagement has been reduced due to rapidly evolving COVID-19 priorities at U.S.

medical centers.

The COVID-19 pandemic previously impacted, to a certain degree, the Company’s customer engagement initiatives, whereby ADMA’s sales and medical affairs field personnel faced

difficulties communicating directly with physicians and other healthcare professionals, as well as the cancellation or postponement of a number of key scientific and medical meetings, further limiting the Company’s ability to communicate with

potential customers.

The 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

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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

During the nine months ended September 30, 2022 and 2021, revenue attributable to international customers was

approximately 7 % and 13 %,

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liquidity and results of operations.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Vendor Commitments

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collection centers owned by Grifols.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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Purchase Agreement to Grifols, effective January 1, 2019.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

For the six months ended June 30, 2022,

For the nine months ended September 30,

2022, plasma purchases from Grifols totaled $ 40.3 million, or approximately 68 % of the Company’s total inventory purchases.

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

For the nine months ended September 30, 2021, plasma purchases from Grifols totaled approximately $ 31.2 million, representing approximately 69 %

of the Company’s total inventory purchases.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Post-Marketing Commitments

In connection with the approval of the BLA for BIVIGAM, on December 19, 2012 Biotest committed to perform two additional

post-marketing studies, a pediatric study to evaluate the efficacy and safety of BIVIGAM in children and adolescents, and a post-authorization safety study to further assess the potential risk of hypotension and hepatic and renal impairment in

BIVIGAM-treated patients with primary humoral immunodeficiency.

In connection with

the approval of the BLA for BIVIGAM, on December 19, 2012 Biotest committed to perform two additional post-marketing studies, a pediatric study to evaluate the efficacy and safety of BIVIGAM in children and adolescents, and a post-authorization

safety study to further assess the potential risk of hypotension and hepatic and renal impairment in BIVIGAM-treated patients with primary humoral immunodeficiency.

These studies are still pending completion.

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

The Company currently expects 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.

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

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

The Company expects to incur expenses of approximately $ 2

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

ADMA has assumed the remaining

obligations, and the costs of the studies will be expensed as incurred as research and development expenses.

For the three months ended September 30, 2022 and 2021, the Company incurred expenses related to these studies $ 0.7 million and $ 0.3 million,

respectively.

For the nine months ended September 30, 2022 and 2021, the Company incurred expenses of $ 1.5 million and $ 1.3 million, respectively.

The Company currently expects to incur expenses of approximately $ 2.0 million to $ 3.0 million to complete these studies, with both studies to

be completed by June of 2023.

In connection with

the FDA’s approval of ASCENIV on April 1, 2019, the Company is required to perform a pediatric study to evaluate the safety and efficacy of ASCENIV in children and adolescents.

For the three months ended September 30, 2022 and 2021, the Company

incurred expenses related to these studies $ 0.1 million and $ 0.2 million, respectively.

For the nine months ended September 30, 2022 and 2021, the Company incurred expenses of $ 0.3 million and $ 0.5 million, respectively.

The Company expects to incur

expenses of approximately $ 2 million to complete this study, which is required to be completed by June of 2023.

Employment Contracts

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been recognized as expense when paid.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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The Company’s maximum exposure under these arrangements is

unknown as of June 30, 2022.

unknown as of September 30, 2022.

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

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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 .

segment consists of ten plasma collection facilities located throughout the U.S., seven of which currently hold FDA licenses, with two

additional plasma collection centers in operation and collecting plasma and the remaining facility 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 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:

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

Three Months Ended September 30, 2022

Plasma Collection

BioManufacturing

Cost of product revenue

Income (loss) from operations

Interest and other expense, net

Net income (loss)

Depreciation and amortization expense

ADMA BIOLOGICS, INC.

1 unchanged sentence

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended June 30, 2022

BioManufacturing

Three Months Ended September 30, 2021

Plasma Collection

BioManufacturing

Cost of product revenue

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Depreciation and amortization expense

Three Months Ended June 30, 2021

BioManufacturing

Nine Months Ended September 30, 2022

Plasma Collection

BioManufacturing

Cost of product revenue

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Interest and other expense, net

Loss on extinguishment of debt

Capital expenditures

Depreciation and amortization expense

2 unchanged sentences

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2022

BioManufacturing

Nine Months Ended September 30, 2021

Plasma Collection

Cost of product revenue

Loss from operations

Interest and other expense, net

Loss on extinguishment of debt

Capital expenditures

Depreciation and amortization expense

Six Months Ended June 30, 2021

BioManufacturing

Plasma Collection

Cost of product revenue

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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 June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

United States

1 unchanged sentence

Total revenues

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LEASE OBLIGATIONS

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they are reasonably certain to be exercised.

The present value of the lease payments is determined using the Company’s incremental borrowing rate of 13 %.

The present value of the lease payments is determined using the Company’s then-incremental borrowing rate of 13 %.

The Company’s lease expense is recognized on a straight-line basis over the lease term and is reflected in Plasma center operating expenses and Selling, general and administrative expenses.

Aggregate lease expense for the Company’s leases for

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

Aggregate lease

expense for the Company’s leases for the three months ended September 30, 2022 and 2021 was approximately $ 0.6 million and $ 0.4 million, respectively.

Aggregate lease expense for the Company’s leases for the nine months ended September 30, 2022 and 2021 was approximately

$ 1.5 million and $ 1.0

million, respectively.

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

Cash paid for the Company’s leases for the three months ended September 30, 2022 and 2021 was approximately $ 0.5

million and $ 0.3 million, respectively.

Cash paid for the Company’s leases for the nine months ended September 30, 2022 and 2021 was

approximately $ 1.3 million and 1.1

million, respectively.

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

liabilities of $ 11.4 million and $ 8.1

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.

million as of September 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 8.8 years.

1 unchanged sentence

Company’s lease obligations are as follows:

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Remainder of 2022

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Current portion

Balance at June 30, 2022

Balance at September 30, 2022

In addition to the foregoing lease obligations, the Company leases an office building and equipment from Areth as

discussed in Note 7.

In connection with the amendment to this lease discussed in Note 14, the Company will pay an additional $ 0.5

million to Areth from October 1, 2022 through December 31, 2026.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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

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

SUPPLEMENTAL CASH FLOW INFORMATION:

4 unchanged sentences

Warrants issued in connection with notes payable

SUBSEQUENT EVENT

As discussed in Note 7, the Company leases an office building and equipment from Areth.

The lease term

was for a period of 12 months and provided for automatic one-year renewals unless ADMA provided written notice of termination to Areth 60 days prior to the end

Effective as of October 1, 2022, the Company and Areth agreed to extend the term of the lease to December 31, 2026 at the current monthly rent.

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