What changed in this filing

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Item 1. Financial Statements

2023-11-08 compared with 2023-08-09 · 235 added, 206 removed, 634 unchanged (41% 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,

Cost of product revenue

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Total operating expenses

LOSS FROM OPERATIONS

INCOME (LOSS) FROM OPERATIONS

OTHER INCOME (EXPENSE):

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Other expense, net

BASIC AND DILUTED LOSS PER COMMON SHARE

NET INCOME (LOSS)

BASIC INCOME (LOSS) PER COMMON SHARE

DILUTED INCOME (LOSS) PER COMMON SHARE

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic and Diluted

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

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STOCKHOLDERS’ EQUITY (Unaudited)

For the Three and Six Months Ended June 30, 2023

For the Three and Nine Months Ended September 30, 2023

Stockholders’

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( 491,176,193

For the Three and Six Months Ended June 30, 2022

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

Exercise of stock options

Stock-based compensation

Balance at September 30, 2023

( 488,611,138

For the Three and Nine Months Ended September 30, 2022

Stockholders’

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Stock-based compensation

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

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

Balance at March 31, 2022

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Stock-based compensation

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

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

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

( 465,784,988

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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Payments on finance lease obligations

Proceeds from the exercise of stock options

Net proceeds from the exercise of stock options

Payment of deferred financing fees

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents - beginning of period

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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, 2023, the Company had working capital of $ 224.3 million, including $ 62.5 million of cash

the immunoglobulin production process as well as sales of normal source and high-titer plasma.

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 September 30, 2023, the Company had working capital of $ 231.9 million, including $ 74.2 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 will be sufficient to fund ADMA’s operations, as currently conducted, through the end of the third quarter of 2024, by which time the Company

believes it will have been 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 continued 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,

currently 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 fiscal 2024.

The Company estimates that it will continue to

generate positive cash flow from operations, however 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 continued acceptability of ADMA’s immune globulin products by physicians, patients or payers.

There can be no assurance that the Company’s approved products will

continue to 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.

continues to evaluate a variety of strategic alternatives.

While the exploration of value-creating opportunities remains a top corporate priority for the Company, ADMA has terminated its financial advisory agreement with Morgan Stanley.

continues to evaluate a variety of strategic alternatives , and the exploration of value-creating opportunities remains a top

corporate priority.

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, 2023, its results of operations and changes in stockholders’ equity for the three and six months ended

June 30, 2023 and its cash flows for the six months ended June 30, 2023 and 2022.

During the three and six months ended June 30, 2023 and 2022, comprehensive loss was equal to the net loss

assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2023, its results of operations and changes in stockholders’ equity for the three and nine months

ended September 30, 2023 and its cash flows for the nine months ended September 30, 2023 and 2022.

During the three and nine months ended September 30, 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.

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Accounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts in

the amount of $ 0.2 million and $ 0.1

million at June 30 , 2023 and December 31, 2022, 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, payment history and associated credit risk of customers are performed on an ongoing basis.

the amount of $ 0.1 million at September 30 , 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 June 30 , 2023, three customers accounted for an aggregate of 94 % 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.

At September 30 , 2023, four customers accounted for an aggregate of approximately

95 % 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 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.

normal source plasma and Respiratory Syncytial Virus (“RSV”) high titer 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 Boca Facility overhead allocation to inventory is generally based upon the estimated square footage of the Boca Facility that is used in the production of the Company’s FDA-approved 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.

June 30 , 2023 and December 31, 2022 was $ 3.5 million.

September 30 , 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

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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 three and six

months ended June 30 , 2023 and 2022.

goodwill impairment test as of October 1, 2023 did not result in a goodwill impairment charge, and the Company did no t record any impairment charges related to goodwill for the three and

nine months ended September 30 , 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.

three and six months ended June 30 , 2023 and 2022, the Company

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

three and nine months ended September 30 , 2023 and 2022, the

Company did not identify any impairment indicators for its long-lived assets, and as a result no impairment charges were

ADMA BIOLOGICS, INC.

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Revenue Recognition

Revenues for the three and six months ended June 30 , 2023

Revenues for the three and nine months ended September 30 , 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

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Revenue from the sale of the Company’s immunoglobulin

products is recognized when the product reaches the customer’s destination, and is recorded net of estimated rebates, price protection arrangements and customer incentives, including prompt pay discounts, wholesaler chargebacks and other

wholesaler fees.

These estimates are based on historical experience and certain other assumptions, and the Company believes that such estimates are reasonable.

For revenues associated with contract manufacturing and the sale of intermediates,

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

products is recognized when the product reaches the customer’s destination, and is recorded net of estimated rebates, customer incentives, including prompt pay discounts, wholesaler chargebacks and other wholesaler fees.

These estimates are

based on historical experience and certain other assumptions, and while the Company believes that such estimates are reasonable, they are subject to change based on future experience and other factors.

For revenues associated with contract

manufacturing and the sale of intermediates, control transfers to the customer and the performance obligation is satisfied when the customer takes possession of the product from the Boca Facility or from a third-party warehouse that is

utilized by the Company.

Product revenues from the sale of human plasma collected at the Company’s plasma collection centers are recognized at

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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 , 2023 , two customers represented an aggregate of 68 % of the Company’s consolidated revenues.

For the six months ended June 30 , 2022, two customers represented an aggregate of

73 % of the Company’s consolidated revenues.

For the nine months ended September 30 , 2023 , two customers represented an aggregate of approximately 71 % 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.

Cost of Product Revenue

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intermediates and the sale of human source plasma, as well as expenses related to conformance batch production, process development and scientific and technical operations when these operations are attributable to marketed products.

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

Loss Per Common Share

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the

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

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

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

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

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

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

anti-dilutive.

As a result, no potentially dilutive securities are included in the computation of any of the accompanying diluted loss per share amounts in the accompanying condensed consolidated financial statements as the Company reported

a net loss for all periods presented.

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

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

Earnings/loss Per Common Share

Basic earnings/loss per common share is computed by dividing net earnings/ loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings/ loss per common share is calculated by dividing net earnings/ loss attributable to common stockholders, as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common

stock outstanding during the period.

Potentially dilutive common stock includes the shares of common stock issuable upon the exercise of outstanding stock options and warrants, as well as Restricted Stock Units (“RSUs”) , using the treasury stock method.

Potentially dilutive common stock is excluded from the diluted earnings/ loss per common share

computation to the extent that it would be anti-dilutive.

For the three months ended September 30, 2023, basic and diluted earnings per share is calculated as follows:

Net income available to common stockholders (numerator)

Weighted-average number of common shares (denominator)

Basic earnings per common shares

Weighted-average number of common shares

Potential shares of common stock arising from outstanding stock options, warrants and unvested RSUs

Total shares - diluted (denominator)

Diluted earnings per common share

For the three months ended September 30, 2023, there were no shares with an anti-dilutive effect that needed to be excluded from the earnings per share computation.

For the nine months ended September 30, 2023 and for the three and nine months ended September 30, 2022 no potentially dilutive securities are included in the computation of diluted loss per share amounts in the accompanying condensed

consolidated financial statements as the Company reported a net loss for these periods.

For the nine months ended September 30 ,

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 Nine Months Ended September 30,

Stock options

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Based on its analysis, the Company

has determined that it has no t incurred any liability for unrecognized tax benefits as of June 30, 2023 and December 31,

2022, and during the six months ended June 30, 2023 and 2022 the Company recognized no

has determined that it has no t incurred any liability for unrecognized tax benefits as of September 30, 2023 and December

31, 2022, and during the nine months ended September 30, 2023 and 2022 the Company recognized no

adjustments for uncertain tax positions.

The following table provides the components of inventories:

September 30,

Raw materials

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INTANGIBLE ASSETS

Intangible assets at June 30, 2023 and December 31, 2022 consist of the following:

June 30, 2023

Intangible assets at September 30, 2023 and December 31, 2022 consist of the following:

September 30, 2023

December 31, 2022

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Biotest Transaction.

Amortization expense related to these intangible assets was $ 0.2 million for the three months ended June 30,

2023 and 2022, and $ 0.4 million for the six months ended June 30, 2023 and 2022.

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

Amortization expense related to these intangible assets was $ 0.2 million for the three months ended

September 30, 2023 and 2022, and $ 0.5 million for the nine months ended September 30, 2023 and 2022.

Estimated future aggregate amortization

expense is expected to be as follows:

Remainder of 2023

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Property and equipment and related accumulated depreciation are summarized as

June 30, 2023

September 30, 2023

December 31, 2022

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

months ended June 30, 2023 and 2022 of $ 1.9 million and $ 1.5

million , respectively , and for the six months ended June 30, 2023 and 2022 of $ 3.8 million and $ 3.0 million, respectively .

months ended September 30, 2023 and 2022 of $ 1.9 million and $ 1.7

million , respectively , and for the nine months ended September 30, 2023 and 2022 of $ 5.7 million and $ 4.6 million, respectively .

ADMA BIOLOGICS, INC.

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities at June 30, 2023 and December 31, 2022 are as follows:

June 30, 2023

Accrued expenses and other current liabilities at September 30, 2023 and December 31, 2022 are as follows:

September 30, 2023

December 31, 2022

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A summary of outstanding senior notes payable is as follows:

June 30, 2023

September 30, 2023

December 31, 2022

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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.

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

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From the time of the Hayfin Closing Date through May 1, 2023, borrowings under the Hayfin Credit Agreement bore 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”);

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 pays accrued interest to Hayfin.

The rate of interest in effect as of June 30,2023

and December 31, 2022 was 13.7 % 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

On the last day of each calendar month or quarter during the term of the Hayfin Credit Facility, the Company pays accrued interest

The rate of interest in effect as of September 30,2023 and December 31, 2022 was approximately 13.9 %.

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 six months ending June

30,2023, approximately $ 2.0 million of interest was paid in kind and added to the balance of the outstanding Hayfin Loans.

For the nine months ending September 30,2023 and 2022, approximately $ 3.0 million and $ 2.0 million, respectively, of interest was paid in

kind and added to the balance of the outstanding Hayfin Loans.

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

This exit fee is recorded separately as a

non-current liability on the accompanying consolidated balance sheets as of June 30,2023 and December 31,2022.

On the Hayfin Maturity Date, the Company is required to 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 September 30,2023 and December 31,2022.

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

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30, 2022 to $ 250.0 million for the fiscal quarter ended December 31, 2026.

As of June 30, 2023, the Company was in compliance

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

As of September 30, 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

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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 June 30,2023 and December 31, 2022 was approximately 17.4 % and 16.1 %, respectively.

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 September 30,2023 and December 31, 2022 was approximately 17.6 % and 16.1 %, respectively.

ADMA BIOLOGICS, INC.

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

There were no shares of preferred stock outstanding at June 30, 2023 and December 31, 2022.

As of June 30, 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 224,526,748 and 221,816,930

shares of common stock were outstanding as of June 30, 2023 and December 31, 2022, respectively.

After giving effect to the 46,940,501

shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of June 30, 2023 there were 28,532,751 shares of common stock available for issuance.

There were no shares of preferred stock outstanding at September 30, 2023 and December 31, 2022.

As of September 30, 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 225,958,084 and 221,816,930 shares of common stock were outstanding as of September 30, 2023 and December 31, 2022, respectively.

After giving effect to the 43,089,619 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of September 30, 2023

there were 30,952,297 shares of common stock available for issuance.

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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On June 16, 2023, various entities affiliated with Hayfin exercised 3,388,686 Hayfin Warrants in a cashless exercise transaction resulting in the Company issuing 1,967,847 shares of its common stock to such entities.

At June 30, 2023 and December 31, 2022, the Company had outstanding warrants to purchase an aggregate of 12,502,906 and 13,525,148 shares,

At September 30, 2023 and December 31, 2022, the Company had outstanding warrants to purchase an aggregate of 12,502,906 and 13,525,148 shares,

respectively, of common stock, with weighted-average exercise prices of $ 2.32 and $ 1.99 per share, respectively, with expiration dates ranging between December 2024 and December 2030.

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value estimate.

The following assumptions were used to determine the fair value of options granted during the six months ended June 30, 2023 and 2022:

The following assumptions were used to determine the fair value of options granted during the nine months ended September 30, 2023 and 2022:

ADMA BIOLOGICS, INC.

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30,

Nine Months Ended September 30,

Expected term

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Approval of the 2022 Equity Plan resulted in approximately 18 million additional shares of the Company’s common stock being reserved for future awards.

During the six months ended June 30, 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 June

During the nine months ended September 30, 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

September 30, 2023 is 6.8 years.

The weighted average remaining contractual life of stock options exercisable at September 30,

2023 is 5.2 years.

The weighted average remaining contractual life of stock options exercisable at June 30, 2023 is 5.0 years.

During the six months ended June 30, 2023, options to purchase 178,829 shares of common stock were exercised and the Company received aggregate exercise proceeds of $ 0.5 million.

Also during the six months ended June 30, 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.

During the nine months ended September 30, 2023, options to purchase 3,809,210 shares of common stock were exercised, for which 2,108,030 shares were withheld to cover the aggregate exercise prices and 259,867

shares were withheld to cover payroll taxes, and the Company received aggregate net exercise proceeds of $ 1.1 million.

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, 2022

Options outstanding, vested and expected to vest at June 30, 2023

Options outstanding, vested and expected to vest at September 30, 2023

Options exercisable

As of June 30, 2023, the Company had $ 4.9 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

As of September 30, 2023, the Company had $ 4.3 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 2.7 years.

During the six months ended June 30, 2023 and 2022, the Company granted RSUs representing an aggregate of 2,976,260 and 1,109,266 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 six months ended

June 30, 2023, an aggregate of 806,781 shares of common stock vested in connection with grants of RSUs.

With respect to these

vested RSUs, 246,082 shares valued at approximately $ 0.9 million were withheld by the Company to cover employees’ tax liabilities.

These shares were no longer outstanding as of June 30, 2023.

During the nine months ended September 30, 2023 and 2022, the Company granted RSUs representing an aggregate of

3,345,760 and 1,119,266

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

During the nine months ended September 30, 2023, an aggregate of 1,032,698 shares of common stock vested in connection

with grants of RSUs.

With respect to these vested RSUs, 300,704 shares valued at approximately $ 1.0 million were withheld by the Company to cover employees’ tax liabilities.

These shares were no longer outstanding as of September 30, 2023.

A summary of the

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Balance at December 31, 2022

Balance at June 30, 2023

As of June 30, 2023, the Company had $ 11.6 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

Balance at September 30, 2023

As of September 30, 2023, the Company had $ 11.6 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 3.1 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, 2023 and 2022 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

and nine months ended September 30, 2023 and 2022 is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

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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 and six months ended June 30, 2023 and 2022 amounted to $ 30,000 and $ 60,000 , respectively .

Rent expense for the three and nine months ended September 30, 2023 and 2022 amounted to $ 30,000 and $ 90,000 , respectively .

company controlled by Dr.

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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 six months ended June 30, 2023 and 2022.

During the six months ended June 30, 2023 and 2022, the Company purchased certain specialized medical equipment and

(common area) expenses, equipment and certain other operational expenses, which were not material to the condensed consolidated financial statements for the nine months ended September 30, 2023 and 2022.

During the nine months ended September 30, 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 $ 0.4 million and $ 0.1 million, respectively.

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and Adam Grossman.

On August 15, 2023, two of the Company’s executive officers exercised options to purchase 2,909,721

shares of the Company’s common stock on a cashless basis, and 688,657 shares of common stock were issued to these executive officers,

net of 257,867 shares of common stock to cover a portion of their tax liabilities (see Note 8).

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.

There were no transactions with Perceptive

during the six months ended June 30, 2023.

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

There were no transactions with

Perceptive during the nine months ended September 30, 2023.

COMMITMENTS AND CONTINGENCIES

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technology systems inaccessible for less than one week.

The Company’s investigation of the disruption remains ongoing with the

assistance of third-party consultants.

As no definitive root cause has been identified, the Company believes, theoretically, this IT systems disruption may have been caused by a third-party who may have gained access to the system.

no original financial systems or other data loss or any evidence of files exfiltrated due to this disruption.

The Company’s investigation of the disruption has essentially been

completed with the assistance of third-party consultants.

While no definitive root cause has been identified, as previously disclosed the Company believes that this IT systems disruption may have been caused by a third-party who may have

gained access to the system.

There was no original financial systems or other data loss or any evidence of files exfiltrated due to this disruption.

Normal course operations have resumed across the Company’s business units.

At the time of the disruption, the Company was in

production of two batches of BIVIGAM, and after a prolonged hold time, it was deemed to be a prudent GMP quality decision to

discard these two in-process production batches as these batches were no longer viable for further production or had any

alternative use.

As a result, the Company recorded a one-time, non-recurring charge of $ 2.1 million for this inventory, which is

reflected in Cost of product revenue in the accompanying consolidated statements of operations.

In addition, the Company believes that its Plasma center operating expenses were adversely impacted by approximately $ 0.7 million due to the temporary closing of the Company’s plasma collection centers while their IT systems were restored.

At the time of the

disruption, the Company was in production of two batches of BIVIGAM, and after a prolonged hold time, it was deemed to be a

prudent GMP quality decision to discard these two in-process production batches as these batches were no longer viable for further

production or had any alternative use.

As a result, the Company recorded a one-time, non-recurring charge of $ 2.1 million in the

second quarter of 2023 for this inventory, which is reflected in Cost of product revenue in the accompanying consolidated statements of operations for the nine months ending September 30, 2023.

In addition, during the second quarter of 2023,

the Company’s Plasma center operating expenses were adversely impacted by approximately $ 0.7 million due to the temporary closing

of the Company’s plasma collection centers while their IT systems were restored.

The Company carries appropriate insurance for these types of instances, and while there can be no assurances

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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

A substantial portion of such testing had

historically been performed by contract laboratories outside the United States.

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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.

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 elected to carry more raw materials inventory than it had 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

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or review of pending applications or submissions.

Although the Company has received FDA approvals for six 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

Although the Company has received FDA approvals for six of its plasma collection centers since January 1, 2022 and previously 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 six months ended June 30, 2023 and 2022, revenue attributable to international customers was

approximately 7 % of the Company’s total revenues.

As the Company seeks to grow this aspect of its business, it may also be

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

During the nine months ended September 30, 2023 and 2022, the Company’s total revenues attributable to

international customers was approximately 6 % and 7 %, respectively.

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

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

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

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

liquidity or results of operations.

credit markets or the Company’s workforce, customers or 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

or results of operations.

Vendor Commitments

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The Company must purchase a to-be-determined and agreed upon annual minimum

volume from BPC, but may also collect high-titer RSV plasma from up to five wholly-owned ADMA plasma collection facilities.

2015, the Company and BPC amended the 2011 Plasma Purchase Agreement to allow the Company the ability to collect its raw material RSV high-titer plasma from other third-party collection organizations, thus allowing the Company to expand its

reach for raw material supply as it executes its commercialization plans for ASCENIV.

As part of the closing of the Biotest Transaction, the parties amended the 2011 Plasma Purchase Agreement to extend the initial term through the ten-year anniversary of the closing date of the Biotest Transaction.

Unless terminated earlier, the 2011 Plasma Purchase Agreement expires in June

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

volume from BPC, and under the original 2011 Plasma Purchase Agreement, the Company was permitted to also collect high-titer RSV plasma from up to five

wholly-owned ADMA plasma collection facilities.

During 2015, the Company and BPC amended the 2011 Plasma Purchase Agreement to (i) allow the Company to collect its raw material RSV high-titer plasma from any number of wholly-owned ADMA plasma

collection facilities and (ii) to allow the Company to purchase its raw material RSV high-titer plasma from other third-party collection organizations, in each case, provided that the annual minimum volumes from BPC were met, thus allowing the

Company to expand its reach for raw material supply as it executes its commercialization plans for ASCENIV.

As part of the closing of the Biotest Transaction, the parties amended the 2011 Plasma Purchase Agreement to extend the initial term

through the 10 -year anniversary of the closing date of the Biotest Transaction.

Unless terminated earlier, the 2011 Plasma Purchase

Agreement expires in June 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

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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, 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.

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.

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.

The Company has also increased its number of 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.

Through December 31, 2022, the

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

For the six months ended June 30, 2023, plasma purchases from Grifols totaled $ 5.2 million, or approximately 26 % of the Company’s total inventory purchases.

For the six months

ended June 30, 2022, plasma purchases from Grifols totaled $ 22.8 million, representing approximately 66 % of the Company’s total inventory purchases.

For the nine months ended September 30, 2023, plasma purchases from Grifols totaled $ 6.5 million, or approximately 23 % of the Company’s total inventory purchases.

For the nine months

ended September 30, 2022, plasma purchases from Grifols totaled $ 40.3 million, representing approximately 68 % of the Company’s total inventory purchases.

Post-Marketing Commitments

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impairment in BIVIGAM-treated patients with primary humoral immunodeficiency.

These studies were required to be completed by June of 2023 and both studies have been completed and the study reports have been submitted to the FDA.

These studies were required to be completed by June of 2023.

Both studies have been completed and the study reports have been submitted to the FDA.

assumed the remaining obligations, and the costs of the studies have been expensed as incurred as research and development expenses.

For the six months ended June 30, 2023 and 2022, the Company incurred expenses related to these studies of $ 1.4 million and $ 0.9 million,

respectively.

For the nine months ended September 30, 2023 and 2022, the Company incurred expenses related to these studies

of $ 1.7 million and $ 1.5

million, respectively.

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 six months ended June 30, 2023 and 2022, the Company incurred expenses related to this study in the amount of $ 0.4 million and $ 0.2 million,

For the nine months ended September 30, 2023 and 2022, the Company incurred expenses related to this study in the amount of $ 0.6 million and $ 0.3 million,

respectively.

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The Company has entered into employment agreements with Mr.

Grossman and with Brian Lenz, its Executive Vice President,

Chief Financial Officer and General Manager, ADMA BioCenters.

Grossman and with Brian Lenz, the Company’s Executive Vice

President, Chief Financial Officer and General Manager, ADMA BioCenters.

Other Commitments

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The Company’s maximum exposure under these arrangements is

unknown as of June 30, 2023.

unknown as of September 30, 2023.

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

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

BioManufacturing

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Income (loss) from operations

Interest and other (expense) income, net

Interest and other expense, net

Net income (loss)

Depreciation and amortization expense

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Plasma Collection

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Cost of product revenue

Loss from operations

Income (loss) from operations

Interest and other expense, net

Net income (loss)

Depreciation and amortization expense

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NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Plasma Collection

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Depreciation and amortization expense

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Plasma Collection

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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

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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, 2023 and 2022 was approximately $ 0.6 million and $ 0.5 million, respectively, and aggregate

lease expense for the six months ended June 30, 2023 and 2022 was $ 1.2 million and $ 0.9 million, respectively.

Cash paid for the Company’s leases for the three months ended June 30, 2023 and 2022 was approximately $ 0.6 million and $ 0.4 million,

respectively, and cash paid for the six months ended June 30, 2023 and 2022 was approximately $ 1.1 million and $ 0.8 million, respectively.

The Company has aggregate lease liabilities of $ 11.2 million and $ 11.6 million as of June 30, 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 8.1 years.

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

Aggregate lease expense for the Company’s leases for the three months ended September 30, 2023 and 2022 was approximately $ 0.6 million, and aggregate lease expense for the nine months ended September 30, 2023 and 2022 was $ 1.8 million and $ 1.5 million, respectively.

Cash paid for

the Company’s leases for the three months ended September 30, 2023 and 2022 was approximately $ 0.6 million and $ 0.5 million, respectively, and cash paid for the nine months ended September 30, 2023 and 2022 was approximately $ 1.8 million and $ 1.3 million,

respectively.

The Company has aggregate lease liabilities of $ 10.9 million and $ 11.6 million as of September 30, 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.

Company’s operating leases have a weighted average remaining term of 7.9 years.

Scheduled payments under the

Company’s lease obligations are as follows:

Remainder of 2023

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Current portion

Balance at June 30, 2023

Balance at September 30, 2023

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Supplemental cash flow information for the six months ended June 30, 2023 and 2022 is as follows:

Supplemental cash flow information for the nine months ended September 30, 2023 and 2022 is as follows:

SUPPLEMENTAL CASH FLOW INFORMATION:

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

What changed 10-Q

Item 1. Financial Statements