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Item 1. Financial Statements

2023-05-10 compared with 2022-11-09 · 327 added, 428 removed, 465 unchanged (62% of the section changed)

4 unchanged sentences

BALANCE SHEETS

September 30,

Current assets:

35 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Product revenue

License revenue

Total revenues

CONDENSED CONSOLIDATED STATEMENTS OF

Three Months Ended March 31,

Cost of product revenue

Gross profit (loss)

OPERATING EXPENSES:

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY (Unaudited)

For the Three and Nine Months Ended September 30, 2022

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’

EQUITY (Unaudited)

For the Three Months Ended March 31, 2023

Stockholders’

Balance at December 31, 2022

1 unchanged sentence

Stock-based compensation

Warrants issued in connection with notes payable

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

Balance at March 31, 2022

( 437,120,578

Stock-based compensation

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

Balance at June 30, 2022

( 450,885,484

Stock-based compensation

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

Balance at September 30, 2022

Exercise of stock options

Balance at March 31, 2023

( 484,805,486

For the Three and Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Stockholders’

1 unchanged sentence

( 412,112,721

Warrants issued in connection with notes payable

Stock-based compensation

Issuance of common stock, net of offering expenses

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

1 unchanged sentence

( 437,120,578

Stock-based compensation

Issuance of common stock, net of offering expenses

Balance at June 30, 2021

( 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.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

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( 100,000,000

Proceeds from issuance of common stock, net of offering expenses

Payment of debt refinancing fees

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Payment of deferred financing fees

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents - beginning of period

20 unchanged sentences

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., 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.

collection business with ten plasma collection facilities

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

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

(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

(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”) or Inborn Errors of Immunity, and for which the Company received FDA approval on May 9, 2019 and commenced commercial sales in

(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

5 unchanged sentences

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.

As of March 31, 2023, the Company had working capital of $ 227.4 million, including $ 69.2 million of cash and cash

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.

believes that its cash, cash equivalents, projected revenue and accounts receivable will be sufficient to fund ADMA’s operations, as currently conducted, through the end of the second quarter of 2024, by which time the Company believes it

will have begun generating 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 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.

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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 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.

assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of March 31, 2023 and its results of operations, changes in stockholders’ equity and cash flows for the three months

ended March 31, 2023 and 2022.

During the three months ended March 31, 2023 and 2022, 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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Accounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts in

the amount of $ 0.1 million and $ 0.2

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.

the amount of $ 0.1 million at March 31 , 2023 and December 31, 2022, respectively, which are recognized in the period the related revenue is recorded.

Company extends credit to its customers based upon an evaluation of each customer’s financial condition and credit history.

Evaluations of the financial condition, payment history 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 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.

At March 31 , 2023, five customers accounted for an aggregate of 98 % of the Company’s total accounts receivable, and at December 31, 2022, two customers accounted for approximately 92 % 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 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.

normal source plasma and Respiratory Syncytial Virus (“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.

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.

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

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

BioManufacturing business segment and is related to the Biotest Transaction.

at March 31 , 2023 and December 31, 2022 was $ 3.5 million.

All of the Company’s goodwill is attributable to its ADMA BioManufacturing business segment and is related to the Biotest

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

6 unchanged sentences

The Company’s annual

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.

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 three months

ended March 31 , 2023 and 2022.

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.

nine months ended September 30 , 2022 and 2021, the

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

three months ended March 31 , 2023 and 2022, the Company

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

ADMA BIOLOGICS, INC.

2 unchanged sentences

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)

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

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.

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.

Revenues for the three months ended March 31 , 2023

and 2022 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.

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 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.

For the three months ended March 31 , 2023 , three customers represented an aggregate of 76 % of the Company’s consolidated revenues.

For the three months ended March 31 , 2022, three customers represented an aggregate

of 83 % of the Company’s consolidated revenues.

Cost of Product Revenue

13 unchanged sentences

a net loss for all periods presented.

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:

For the three months ended March 31 , 2023 and 2022, the

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

For the Three Months Ended March 31,

Stock options

Restricted Stock Units

ADMA BIOLOGICS, INC.

1 unchanged sentence

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Nine Months Ended September 30,

Stock options

Restricted Stock Units

Stock-Based Compensation

2 unchanged sentences

Compensation expense related to awards to employees and directors with service-based vesting conditions is

recognized on a straight-line basis over the associated vesting period of the award based on the grant date fair value of the award.

generally recognized on a straight-line basis over the associated vesting period of the award based on the grant date fair value of the award.

Stock options granted under the Company’s equity incentive plans generally have a four-year vesting period and a term of 10

14 unchanged sentences

Based on its analysis, the Company

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

has determined that it has no t incurred any liability for unrecognized tax benefits as of March 31, 2023 and December 31,

2022, and during the three months ended March 31, 2023 and 2022, the Company recognized no

adjustments for uncertain tax positions.

The following table provides the components of inventories:

September 30,

Raw materials

6 unchanged sentences

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

1 unchanged sentence

Finished goods inventory is comprised of immunoglobulin product inventory and related intermediates that are available

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.

for commercial sale, as well as plasma collected at the Company’s plasma collection centers that 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 September 30, 2022 and December 31, 2021 consist of the following:

September 30, 2022

Intangible assets at March 31, 2023 and December 31, 2022 consist of the following:

March 31, 2023

December 31, 2022

3 unchanged sentences

Amortization expense

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

related to these intangible assets was $ 0.2 million for the three months ended March 31, 2023 and 2022.

Estimated future

aggregate amortization expense is expected to be as follows:

Remainder of 2023

1 unchanged sentence

Property and equipment and related accumulated depreciation are summarized as

September 30, 2022

March 31, 2023

December 31, 2022

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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 March 31, 2023 and 2022 of $ 1.9 million and $ 1.4 million, respectively.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at March 31, 2023 and December 31, 2022 are as follows:

ADMA BIOLOGICS, INC.

1 unchanged sentence

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 September 30, 2022 and December 31, 2021 are as follows:

September 30, 2022

March 31, 2023

December 31, 2022

6 unchanged sentences

A summary of outstanding senior notes payable is as follows:

September 30, 2022

March 31, 2023

December 31, 2022

2 unchanged sentences

Senior notes payable

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

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

The Hayfin Credit Agreement provides for a senior secured term loan facility in a principal amount of up to $ 175.0 million (the “Hayfin Credit Facility”), composed of (i) a term loan made on the Hayfin Closing Date in the principal amount of $ 150.0 million (the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount of $ 25.0 million (the “Hayfin Delayed Draw Loan” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans”).

The obligation of the lenders to make the Hayfin

Delayed Draw Loan expires on March 22, 2023 and is subject to the satisfaction of certain conditions, including, but not limited

to, the Company’s meeting certain 12-month revenue targets as set forth in the Hayfin Credit Agreement.

The Hayfin Credit Facility has a maturity date of March 23, 2027 (the “Hayfin Maturity Date”), subject to acceleration pursuant to the Hayfin Credit Agreement, including upon an Event of Default (as defined in the Hayfin Credit Agreement).

On the Hayfin Closing Date, the Company used $ 100.0

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

(“Perceptive”).

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

Perceptive and used approximately $ 1.0 million of the Hayfin Closing Date Loan proceeds to pay certain fees and expenses incurred

in connection with this transaction.

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

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

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

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

Perceptive indebtedness and the redemption premium paid to Perceptive.

Borrowings under the Hayfin Credit Agreement 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 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.

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

Services LLP (“Hayfin”).

The Hayfin Credit Agreement provides for a senior secured term loan facility in a principal amount of up to $ 175.0

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

million (the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount of $ 25.0 million (the “Hayfin

Delayed Draw Loan” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans”).

The obligation of the lenders to make the Hayfin Delayed Draw Loan was to have expired on March 22, 2023 and is subject to the satisfaction of certain conditions, including, but not limited to, the Company’s meeting certain 12-month revenue targets as set

forth in the Hayfin Credit Agreement.

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

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

On March 22, 2023, the Company and Hayfin entered into an amendment to the Hayfin Credit Agreement whereby the lenders’ obligation to

make the Hayfin Delayed Draw Loan was extended to June 30, 2023.

On the Hayfin Closing Date, the Company used $ 100.0 million of

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

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

approximately $ 1.0 million of the Hayfin Closing Date Loan proceeds to pay certain fees and expenses incurred in connection with

this transaction.

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

principal balance in accordance with the terms of the Hayfin Credit Agreement.

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

in the amount of $ 6.7 million, consisting of the write-off of unamortized discount related to the Perceptive indebtedness and the

redemption premium paid to Perceptive.

Borrowings under the Hayfin Credit Agreement 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 increases 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 March 31,2023 and December 31, 2022 was 14.4 % and 13.9 %, 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.

For the three months ending March 31,2023, approximately $ 1.0 million of interest was paid in kind and added to the balance of the outstanding Hayfin Loans.

ADMA BIOLOGICS, INC.

1 unchanged sentence

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

This exit fee is recorded

separately as a non-current liability on the accompanying condensed consolidated balance sheet as of September 30, 2022.

On the Hayfin Maturity Date, the Company will pay Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any accrued and unpaid interest thereon, as

well as an exit fee of 1.0 % of the outstanding principal amount being paid.

This exit fee is recorded separately as a

non-current liability on the accompanying consolidated balance sheets as of March 31,2023 and December 31,2022.

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

The Company may prepay outstanding principal on the Hayfin Loans at any time and from time to time upon five business days’ prior written notice, subject to the payment to Hayfin of, (A) any accrued but unpaid interest on the prepaid principal

amount plus (B) an early prepayment fee in the amount equal to (i) 7.0 % of the prepaid principal amount, if prepaid on or prior

to the first anniversary of the Hayfin Closing Date, (ii) 3.0 % of the prepaid principal amount, if prepaid after the first

anniversary of the Hayfin Closing Date and on or prior to the second anniversary of the Hayfin Closing Date, or (iii) 1.0 % of

the prepaid principal amount, if prepaid after the second anniversary of the Hayfin Closing Date and on or prior to the third anniversary of the Hayfin Closing Date.

In addition, for any prepayments of principal or payment of principal on

the Hayfin Maturity Date, the Company is 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

Company’s tangible and intangible assets, including intellectual property and all of the equity interests in the Company’s subsidiaries.

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

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

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

contained in the Hayfin Credit Agreement, incur new indebtedness;

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 Company’s tangible

and intangible assets, including intellectual property and all of the equity interests in the Company’s subsidiaries.

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

conditions that are customarily required for similar financings.

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

Credit Agreement, incur new indebtedness;

create liens on assets;

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

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

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

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

change its fiscal year;

2 unchanged sentences

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, 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

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

The Hayfin Warrants have an

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

The Hayfin Warrants were valued by

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

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

value of the Hayfin Warrants, the Company recognized an aggregate discount on the Hayfin Loans in the amount of $ 13.9 million.

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

Based on the fair value of the Hayfin Warrants and

the aggregate amount of fees and expenses associated with obtaining the Hayfin Credit Facility, the effective interest rate on the Hayfin Loans as of the Hayfin Closing Date and as of September 30, 2022 was approximately 13.0 % and 14.3 %, respectively.

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 March 31, 2023, the Company was in compliance

with all of the covenants contained in the Hayfin Credit Agreement.

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

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

The Hayfin Warrants have an exercise price equal to $ 1.6478 per share, which is equal to the trailing 30 -day

Volume Weighted-average Price of the Company’s common stock on the business day immediately prior to the Hayfin Closing Date.

The Hayfin Warrants were valued by the Company at approximately $ 9.6 million as of the Hayfin Closing Date and have an expiration date of March 23, 2029 .

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

Warrants, the Company recognized an aggregate discount on the Hayfin Loans in the amount of $ 13.9 million.

The Company records

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

Based on the fair value of the Hayfin Warrants and the aggregate amount

of fees and expenses associated with obtaining the Hayfin Credit Facility, the effective interest rate on the Hayfin Loans as of March 31,2023 and December 31, 2022 was approximately 16.6 % and 16.1 %, respectively.

See Note 14 for discussion of an additional amendment to the Hayfin Credit Facility.

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 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

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, 2023 and December 31, 2022.

As of March 31, 2023 and December 31, 2022, the Company was authorized to issue 300,000,000 shares of its common stock, $ 0.0001

par value per share, and 222,262,588 and 221,816,930 shares of common stock were outstanding as of March 31, 2023 and December 31, 2022, respectively.

After giving effect to the 48,356,592 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of March 31, 2023

there were 29,380,820 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 currently has approximately $ 42.8 million of shares

available to sell under the Distribution Agreement.

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

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

the Company’s common stock.

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

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

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

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 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.

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.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, 2023 and December 31,2022, the Company had outstanding warrants to purchase an aggregate of 13,525,148 shares of

common stock, with a weighted-average exercise price of $ 1.99 per share with expiration dates ranging between May 2023 and

December 2030 (see Note 14).

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 nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

The fair value of stock options granted under the Company’s equity incentive plans 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.

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 three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

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.

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 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 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.

On June 21, 2022, the

Company’s stockholders approved the ADMA Biologics, Inc.

2022 Compensation Plan (the “2022 Equity Plan”), which replaced the ADMA Biologics, Inc.

2014 Omnibus Incentive Compensation Plan.

Approval of the 2022 Equity Plan resulted in

approximately 18 million additional shares of the Company’s common stock being reserved for future awards.

three months ended March 31, 2023 and 2022, the Company granted options to purchase an aggregate of 1,727,510 and 1,194,032 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, 2023 is 6.6 years.

The weighted average remaining contractual life of stock

options exercisable at March 31, 2023 is 5.3 years.

the three months ended March 31, 2023, options to purchase 5,416 shares of common stock were exercised in a cashless transaction

resulting in the issuance of 2,443 shares of common stock.

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 September 30, 2022

Options exercisable

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 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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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Exercise Price

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

Options outstanding, vested and expected to vest at March 31, 2023

Options exercisable

As of March 31, 2023, the Company had $ 5.6 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 3.0 years.

During the three months ended March 31, 2023 and 2022, the Company granted RSUs representing an aggregate

of 2,666,260 and 1,059,266

shares, respectively, to certain 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, 2023 , an aggregate of 628,283

shares of common stock vested in connection with grants of RSUs.

With respect to these vested RSUs, 185,068 shares valued at

approximately $ 0.6 million were withheld by the Company to cover employees’ tax liabilities.

These shares were no longer

outstanding as of March

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

Average Grant

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Balance at December 31, 2022

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.

Balance at March 31, 2023

As of March 31, 2023 , the Company had $ 12.0 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 3.4 years.

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

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

Three Months Ended September 30,

Nine Months Ended September 30,

months ended March 31, 2023 and 2022 is as follows:

Three Months Ended March 31,

Research and development

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The Company leases an office building and equipment from Areth, LLC (“Areth”)

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

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

pursuan t to an agreement for services

effective as of January 1, 2016, as amended from time to time , and pays monthly rent on this facility in the amount of $ 10,000 through December 31, 2026 .

Rent expense for the three months ended March 31, 2023 and 2022 amounted to $ 30,000 (see Note 12).

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 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.

Grossman and Adam Grossman.

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

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

Grossman, the Company’s President and Chief Executive

ended March 31, 2023 and 2022.

ADMA BIOLOGICS, INC.

1 unchanged sentence

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2023 and 2022, the Company purchased certain specialized medical equipment and

services primarily 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 and $ 43,000 , respectively.

Genesis is owned by Dr.

Grossman and Adam Grossman.

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

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

There were no transactions with Perceptive

during the three months ended March 31, 2023.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

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

the Delta and Omicron variants and other resistant strains of the coronavirus, and its impacts to the Company’s commercial and manufacturing operations and plasma collection facilities, including collections of source plasma, procurement of raw

materials and packaging materials, a portion of which are sourced internationally, and the testing of finished drug product that is required prior to its availability for commercial sale.

A substantial portion of such testing has historically

been performed by contract laboratories outside the United States.

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

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

shipments of source plasma from its contracted third-party suppliers, as well as delays in deliveries for personal protective equipment, reagents and other non-plasma raw materials and supplies used in the manufacture and distribution of its

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

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

The COVID-19 pandemic 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

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

the Delta, Omicron and BA.2 variants and other resistant strains of the coronavirus, and its impacts to the Company’s commercial and manufacturing operations and plasma collection facilities, including collections of source plasma, procurement

of raw materials and packaging materials, a portion of which are sourced internationally, and the testing of finished drug product that is required prior to its availability for commercial sale.

A substantial portion of such testing has

historically been performed by contract laboratories outside the United States.

Due to a combination of previously mandated 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 at times experienced lower than normal donor collections at its FDA approved plasma collection centers during 2021 and part of 2022.

From time to time during 2021 and 2022, t he Company was also subject to delays in shipments of source plasma from its contracted third-party suppliers, as well as

delays in deliveries for personal protective equipment, reagents and other non-plasma raw materials and supplies used in the manufacture and distribution of its products.

In addition, the Company has been subject to supply chain delays as a

result of certain of its suppliers diverting significant resources towards the rapid development and distribution of COVID-19 vaccines and, as a result, the Company has elected to carry more raw materials inventory than it has in the past.

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 could result in delays in the conduct of inspections

or review of pending applications or submissions.

Although the Company has received FDA approvals for five of its plasma collection centers since January 1, 2022 and received several other FDA approvals while 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

future regulatory submissions or applications that may be impacted by restrictions related to COVID-19.

During the three months ended March 31, 2023 and 2022, revenue attributable to international customers was

approximately 7 % and 6 %,

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As the Company seeks to grow this aspect of its business, it may also be subject to the impacts of the COVID-19 pandemic in locations outside the United States.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Notwithstanding the foregoing, the COVID-19 pandemic to date has not had a material impact on the Company’s financial

4 unchanged sentences

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.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

liquidity or results of operations.

Vendor Commitments

8 unchanged sentences

2027, after which it may be renewed for two additional five-year periods if agreed to by the parties.

On December 10, 2018, BPC assigned its rights and obligations under the 2011 Plasma Purchase Agreement to Grifols Worldwide

Operations Limited (“Grifols”) as its successor-in-interest, effective January 1, 2019.

On January 1, 2019, Grifols and the Company entered into an additional amendment to the 2011 Plasma Purchase Agreement for the purchase of source plasma

containing antibodies to RSV from Grifols.

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

Effective January 1, 2022, RSV plasma purchased

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

collection centers owned by Grifols.

On December 10, 2018, BPC assigned its rights and obligations under the 2011 Plasma Purchase Agreement to Grifols Worldwide Operations

Limited (“Grifols”) as its successor-in-interest, effective January 1, 2019.

On January 1, 2019, Grifols and the Company entered into an additional amendment to the 2011 Plasma Purchase Agreement for the purchase of source plasma containing

antibodies to RSV from Grifols.

Pursuant to this amendment, until January 1, 2022, the Company could purchase RSV plasma from Grifols from the two

plasma collection centers that were transferred to BPC on January 1, 2019 at a price equal to cost plus five percent ( 5 %) (without any additional increase due to inflation).

Effective January 1, 2022, RSV plasma purchased from these two plasma collection centers are subject to the pricing terms in effect for RSV plasma purchased from other plasma collection centers owned by

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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pursuant to which ADMA BioManufacturing purchases normal source plasma (“NSP”) from BPC at agreed upon annual quantities and prices.

The 2017 Plasma Purchase Agreement has an initial term of five years after which the 2017 Plasma Purchase Agreement may be renewed for additional two terms of two years each upon the mutual written consent of the parties.

On July 19, 2018, the

Company and BPC entered into an amendment to the 2017 Plasma Purchase Agreement to, among other things, provide agreed upon amounts of normal source plasma to be supplied by BPC to ADMA BioManufacturing in calendar year 2019 at a specified

price per liter, provided that ADMA BioManufacturing delivers a valid purchase order to BPC.

Additionally, pursuant to the amendment to the 2017 Plasma Purchase Agreement, BPC agreed that, for calendar years 2020 and 2021, it shall supply no

less than a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts, provided that such requested NSP amounts are within an agreed range, at a price per liter to be mutually determined.

Furthermore, pursuant to the

amendment to the 2017 Plasma Purchase Agreement, in the event BPC fails to supply ADMA BioManufacturing with at least a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts, BPC shall promptly reimburse ADMA

BioManufacturing the difference in price ADMA BioManufacturing incurs due to BPC’s election not to supply NSP to ADMA BioManufacturing in such amounts as requested.

On December 10, 2018, BPC assigned its rights and obligations under the Plasma

Purchase Agreement to Grifols, effective January 1, 2019.

On July 19, 2018, the Company and BPC entered into an amendment to the 2017 Plasma Purchase Agreement to, among

other things, provide agreed upon amounts of normal source plasma to be supplied by BPC to ADMA BioManufacturing in calendar year 2019 at a specified price per liter, provided that ADMA BioManufacturing delivers a valid purchase order to BPC.

Additionally, pursuant to the amendment to the 2017 Plasma Purchase Agreement, BPC agreed that, for calendar years 2020 and 2021, it shall supply no less than a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts,

provided that such requested NSP amounts are within an agreed range, at a price per liter to be mutually determined.

Furthermore, pursuant to the amendment to the 2017 Plasma Purchase Agreement, in the event BPC fails to supply ADMA

BioManufacturing with at least a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts, BPC shall promptly reimburse ADMA BioManufacturing the difference in price ADMA BioManufacturing incurs due to BPC’s election not to

supply NSP to ADMA BioManufacturing in such amounts as requested.

On December 10, 2018, BPC assigned its rights and obligations under the Plasma Purchase Agreement to Grifols, effective January 1, 2019.

ADMA BIOLOGICS, INC.

2 unchanged sentences

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

extended through December 31, 2022, while certain historical provisions were deleted.

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

of NSP to supplement the 2017 Plasma Purchase Agreement.

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 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 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.

extended through December 31, 2022, however Grifols’ commitment

to supply the Company with NSP under this agreement was not satisfied until March of 2023 .

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

third-party suppliers of NSP to supplement the 2017 Plasma Purchase Agreement.

at its ADMA BioCenters plasma collection centers business segment.

Through December 31, 2022, the

Company purchased substantially all of its raw material plasma from Grifols.

For the three months ended March 31, 2023, plasma purchases from Grifols totaled $ 11.6 million, or approximately 40 % of the Company’s total inventory

For the three months ended March 31, 2022, plasma purchases from Grifols totaled approximately $ 15.5 million, representing

approximately 75 % of the Company’s total inventory purchases.

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.

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 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.

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.

The pediatric study for BIVIGAM has been completed, and the safety study has been completed pending a clinical study report to

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 March 31, 2023 and 2022, the Company incurred expenses

related to these studies of $ 0.4 million.

The Company currently expects to incur expenses of approximately $ 1.5 million to $ 2.0 million to

complete the safety study, which is required 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.

For the three months ended March 31, 2023 and 2022, the Company

incurred expenses related to these studies in the amount of $ 0.2 million and $ 0.1 million, respectively.

The Company expects to incur expenses of approximately $ 1.5 million to complete this study, which is currently required to be completed by June of 2023.

The Company has submitted an extension request to the FDA.

Employment Contracts

2 unchanged sentences

Chief Financial Officer and General Manager, ADMA BioCenters.

Other Commitments

On September 28, 2021, following the approval of the Company’s Board of

Directors upon recommendation of the Compensation Committee of the Board of Directors, and in consultation with an independent compensation consultant, the Company implemented a retention incentive program, consisting of cash payments and

awards of RSUs (see Note 8), to the Company’s management, including Mr.

Grossman and Mr.

Lenz, and to certain other employees.

The purpose of the retention program is to promote and ensure business continuity and provide an incentive to the

Company’s executive management and certain other employees considering the operational challenges presented by the ongoing COVID -19 pandemic and the competitive work environment in which the Company operates

as an FDA regulated manufacturer of specialized biologic therapies.

The retention awards were granted considering the nationwide labor shortages and the increased employee turnover rates that the Company, its pharmaceutical peers and other

companies outside of the Company’s industry have reported experiencing.

The cash portion of the retention program consists of two tranches.

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 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.

ADMA BIOLOGICS, INC.

1 unchanged sentence

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Commitments

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 September 30, 2022.

unknown as of March 31, 2023.

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

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

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

The Plasma Collection Centers

segment 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 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.

The Plasma Collection Centers segment consists of ten operational plasma collection facilities located throughout the U.S., eight of which currently hold FDA licenses .

The Corporate segment includes general and administrative overhead expenses.

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

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

Three Months Ended September 30, 2022

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

Three Months Ended March 31, 2023

Plasma Collection

4 unchanged sentences

Net income (loss)

Depreciation and amortization expense

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended September 30, 2021

Plasma Collection

BioManufacturing

Cost of product revenue

Loss from operations

Interest and other expense, net

Capital expenditures

Depreciation and amortization expense

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2022

Plasma Collection

9 unchanged sentences

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2021

Plasma Collection

BioManufacturing

Cost of product revenue

Loss from operations

Interest and other expense, net

Capital expenditures

Depreciation and amortization expense

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

United States

11 unchanged sentences

payments arising from the lease.

Right-to-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when

they are reasonably certain to be exercised.

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 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

For all of its leases, the Company has elected and applies the practical expedient available to lessees to combine non-lease components with their related

lease components and account for them as a single combined lease component.

Right-to-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term and include

options to extend or terminate the lease when they are reasonably certain to be exercised.

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

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 March 31, 2023 and 2022

was approximately $ 0.6 million and $ 0.4

million, respectively.

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

Cash paid for the Company’s leases for the three months ended March 31, 2023 and 2022 was approximately $ 0.6

million and $ 0.4 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 $ 11.6

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.

million as of March 31, 2023 and December 31, 2022, 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 8.3 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 2023

3 unchanged sentences

Current portion

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.

Balance at March 31, 2023

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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

Supplemental cash flow information for the three months ended March 31, 2023 and 2022 is as follows:

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SUPPLEMENTAL CASH FLOW INFORMATION:

2 unchanged sentences

Equipment acquired reflected in accounts payable and accrued liabilities

Right-to-use assets in exchange for lease obligations

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.

On May 1, 2023, the Company entered into a second amendment (the “Hayfin Second Amendment”) to the

Hayfin Credit Agreement (see Note 7) whereby the Applicable Margin for adjusted Term SOFR Loans was reduced from 9.5 % to 8.5 %.

The Hayfin Second Amendment also extended the obligation of the lenders to make the Hayfin Delayed Draw Loan from June 30, 2023 to December 31,

Under the terms of the Hayfin Second Amendment, in the event the Company elects to prepay all or any

portion of the outstanding principal on the Hayfin Loans, the Company will be subject to 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 Second Amendment, (ii) 3.0 % of the prepaid

principal amount, if prepaid after the first anniversary of the Hayfin Second Amendment and on or prior to the second anniversary of the Hayfin Second Amendment, or (iii) 1.0 % of the prepaid principal amount, if prepaid after the second anniversary of the Hayfin Second Amendment and on or prior to the third anniversary of the Hayfin Second Amendment.

addition, the Hayfin Second Amendment provides for a 50 % reduction to the foregoing early prepayment fees if the Hayfin Loans are prepaid

in connection with a change in control of the Company or other strategic transactions as further described in the Hayfin Second Amendment.

In connection with the Hayfin Second Amendment, the Company issued additional warrants to the lenders

to purchase 2,391,244 shares of the Company’s common stock at an exercise price of $ 3.2619 per share (“the Hayfin Second Amendment Warrants”).

The Hayfin Second Amendment Warrants were valued at approximately $ 5.6 million and have an expiration date of May 1, 2030.

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