What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-08 compared with 2023-08-09 · 229 added, 224 removed, 332 unchanged (58% of the section changed)

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

representing annual revenues of $240 million or more in 2023, potentially more than $275 million in annual revenue in 2024 and potentially in excess of $325 million of annual revenue thereafter, as well as achieving profitability during the first

quarter of 2024.

At these revenue levels, we forecast achieving consolidated gross margins in the range of 40-50% and net income margins in the range of 20-30%.

These assumptions translate to potential annual gross profit and net income in the

range of $110-$160 million and $55-$100 million, respectively, during the 2024-2025 time period and beyond.

representing annual revenues of $250 million or more in 2023, potentially more than $290 million in annual revenue in 2024 and potentially in excess of $335 million of annual revenue thereafter.

At these revenue levels, we forecast achieving

consolidated gross margins in the range of 40-50% and net income margins in the range of 20-30%.

Primarily as a result of the significant revenue growth and continued physician, patient and payer acceptance of BIVIGAM and ASCENIV that we have

experienced over the past several years, we achieved positive net income and positive cash flow from operations for the first time in the Company’s history during the three months ended September 30, 2023.

These assumptions translate to potential

annual gross profit and net income in excess of $110-$160 million and $55-$100 million, respectively, during the 2024-2025 time periods.

Through our ADMA BioCenters subsidiary, we currently operate ten source plasma collection facilities in the U.S.

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manufacture Nabi-HB under HHS License No.

POTENTIAL IMPACT OF COVID-19

We continue to monitor the ongoing developments related to the COVID-19 pandemic, including the emergence of the Delta, Omicron and BA.2 variants and other resistant strains of the coronavirus, and its impacts to our

commercial and manufacturing operations and plasma collection facilities, including collections of source plasma, procurement of raw materials and packaging materials, a portion of which are sourced internationally, and the testing of finished

drug product that is required prior to its availability for commercial sale.

A substantial portion of such testing has historically been performed by contract laboratories outside the United States.

POTENTIAL IMPACT OF COVID-19, GLOBAL CONFLICTS AND ECONOMIC UNCERTAINTY

conflicts and associated economic uncertainty, and their impacts to our commercial and manufacturing operations and plasma collection facilities, including collections of source plasma, procurement of raw materials and packaging materials, a

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

A substantial portion of such testing had 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, we

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In addition, we have been

subject to supply chain delays as a result of certain of our suppliers diverting significant resources towards the rapid development and distribution of COVID-19 vaccines and, as a result, we have elected to carry more raw materials inventory

than we have in the past.

The COVID-19 pandemic previously impacted, to a certain degree, our 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 our ability to communicate with potential customers.

have in the past.

healthcare professionals, as well as the cancellation or postponement of a number of key scientific and medical meetings, further limiting our ability to communicate with potential customers.

The pandemic could also impact our 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.

we have received FDA approvals for six of our 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 six months ended June 30, 2023 and 2022, our revenue attributable to international customers was approximately 7% of our total revenues.

As we seek to grow this aspect of our business, we may also be

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

we have received FDA approvals for six of our 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 nine months ended September 30, 2023 and 2022, the Company’s total revenues attributable to international customers was approximately 6% and 7%, respectively.

As we seek to grow this aspect of our

business, we may also be subject to the impacts of the COVID-19 pandemic in locations outside the United States.

Notwithstanding the foregoing, the COVID-19 pandemic to date has not had a material impact on our financial condition or results of operations, and we do not believe that our production operations at the Boca

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long-lived assets, including our property and equipment, goodwill or intangible assets.

Although the COVID-19 pandemic has not, to date, materially adversely impacted our capital and financial resources, because we are unable to determine the ultimate severity or duration of the pandemic or its

long-term effects on, among other things, the global, national or local economies, the capital and credit markets or our workforce, customers or suppliers, at this time we are unable to predict whether COVID-19, or any known or future variant or

government order, will have a material adverse impact on our business, financial condition, liquidity and results of operations.

After the COVID-19 global pandemic has settled, we may continue to experience adverse impacts to our business as a

result of evolving macroeconomic factors, including general economic uncertainty, unemployment rates, inflationary pressures and any actual economic recession that has occurred or may occur in the future.

Although the COVID-19 pandemic and global conflicts and economic uncertainty have not, to date, materially adversely impacted our capital and financial resources, because we are unable to determine the ultimate

severity or duration of the pandemic and any global conflicts and economic uncertainty or their long-term effects on, among other things, the global, national or local economies, the capital and credit markets or our workforce, customers or

suppliers, at this time we are unable to predict whether COVID-19, or any known or future variant or government order, or global conflicts and economic uncertainty will have a material adverse impact on our business, financial condition,

liquidity and results of operations.

After the COVID-19 global pandemic has settled, we may continue to experience adverse impacts to our business as a result of evolving macroeconomic factors, including general economic uncertainty,

international conflicts, unemployment rates, inflationary pressures and any actual economic recession that has occurred or may occur in the future.

IT SYSTEMS DISRUPTION

On June 19, 2023, we experienced an IT systems disruption, which rendered certain of our IT technology systems inaccessible for less than one week.

Our investigation of the disruption remains ongoing with the

assistance of third-party consultants.

As no definitive root cause has been identified, we believe, theoretically, 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.

Our 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 we believe 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 operations have resumed across our business units.

At the time of the disruption, we were 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, we 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, we believe that our Plasma center operating expenses were

adversely impacted by approximately $0.7 million due to the temporary closing of our plasma collection centers while their IT systems were restored.

At the time of the disruption, we were 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.

result, we recorded a one-time, non-recurring charge of $2.1 million for this inventory in the second quarter of 2023, which is reflected in Cost of product revenue in the accompanying consolidated statements of operations for the nine months

ended 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 our plasma collection centers while

their IT systems were restored.

We carry appropriate insurance for these types of instances, and while there can be no assurances ADMA will be reimbursed for the insurance claims made pertaining to these charges, we are actively working with its

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However, two of our primary immunoglobulin products, ASCENIV and BIVIGAM,

were only approved for commercial sale by the FDA in 2019, and as such our historical experience with rebates with respect to these products is limited.

If any of our ratios, factors, assessments, experiences or judgments are not indicative or

accurate estimates of our future experience, our results could be materially affected.

were approved for commercial sale by the FDA in 2019.

Therefore, while we have some historical experience with rebates with respect to these products, it is not extensive.

If any of our ratios, factors, assessments, experiences or judgments are

not indicative or accurate estimates of our future experience, our results could be materially affected.

Estimates that are most at risk for material adjustment are those associated with U.S.

Medicaid rebates because of the extensive time delay between the

recording of the accrual and its ultimate settlement, an interval that can generally take up to several years or more.

While our results of operations to date have not required any material adjustment due to this risk, the delay between when this

obligation is initially recorded and ultimately settled could potentially materially impact our revenues and our results of operations in the future.

Medicaid rebates because of the extensive time delay

between the recording of the accrual and its ultimate settlement, an interval that can generally take up to several years or more.

These estimates may change from time to time based on changes in utilization, payor and channel mixes.

results of operations to date have not required any material adjustment due to this risk, the delay between when this obligation is initially recorded and ultimately settled could potentially materially impact our revenues and our results of

operations in the future.

Stock-Based Compensation and Valuation of Warrants

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The expected stock price volatility for our stock options was calculated by examining the historical

volatility of our Common Stock since our Common Stock.

We will continue to analyze the expected stock price volatility and expected term assumptions and will adjust our Black-Scholes option pricing assumptions as appropriate.

Any changes in the

foregoing Black-Scholes assumptions, or if we were to elect to utilize an alternative method for valuing stock options granted to employees, directors and officers, could potentially impact our stock-based compensation expense and our results of

volatility of our Common Stock since our Common Stock became publicly traded.

We will continue to analyze the expected stock price volatility and expected term assumptions and will adjust our Black-Scholes option pricing assumptions as

Any changes in the foregoing Black-Scholes assumptions, or our election to utilize an alternative method for valuing stock options granted to employees, directors and officers, could potentially impact our stock-based compensation

expense and our results of operations.

We also use the Black-Scholes option valuation model for the purpose of estimating the fair value of warrants we issue from time to time in connection with the issuance of notes payable.

Changes in our Black-Scholes

assumptions, or if we were to utilize an alternative method for valuing warrants issued to our lenders, could impact our interest expense and results of operations.

assumptions, or our election to utilize an alternative method for valuing warrants issued to our lenders, could impact our interest expense and results of operations.

Impairment of Long-Lived Assets

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recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.

For the six months ended June 30, 2023 and 2022, we determined that there was no impairment of our long-lived assets.

For the nine months ended September 30, 2023 and 2022, we did not identify any impairment indicators for our long-lived

assets, and as a result no impairment charges were recorded.

Examples of events or circumstances that may be indicative of impairment that would require the use of significant judgment by management include:

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However, any changes to these estimates and assumptions could impact our determination of whether or not our goodwill is impaired.

We did not recognize any impairment charges related to goodwill for the six months ended June 30, 2023

We did not recognize any impairment charges related to goodwill for the nine months ended September 30,

2023 and 2022.

Deferred Tax Assets

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We consider cumulative losses in recent years to be a significant type of negative evidence.

Based on our history of losses, at this time we have not included future projected taxable income as a source of income to

recognize our deferred tax assets.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

The following table presents a summary of the changes in our results of operations for the three months ended June 30, 2023, our second fiscal quarter, compared to the three months ended June

Three Months Ended June 30,

Increase (Decrease)

Based on our history of losses prior to the three months ending September 30, 2023, at this time we have not included future

projected taxable income as a source of income to recognize our deferred tax assets.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

The following table presents a summary of the changes in our results of operations for the three months ended September 30, 2023, our third fiscal quarter, compared to the three months ended

September 30, 2022:

Three Months Ended September 30,

Cost of product revenue

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Selling, general and administrative expenses

Loss from operations

Income (loss) from operations

Interest expense

Other income (expense), net

Net income (loss)

Adjusted EBITDA *

* - See Non-GAAP Financial Measures appearing at the end of this discussion

We recorded total revenues of $60.1 million during the three months ended June 30, 2023, as compared to $33.9 million during the three months ended June 30, 2022, an increase of $26.2 million, or approximately 77%.

The increase is primarily related to increased sales of our immunoglobulin products, mainly ASCENIV and BIVIGAM, generated by our Boca Facility manufacturing operations in 2023 of $27.7 million, as we continue to experience increased physician,

payer and patient acceptance and utilization of ASCENIV and expand our customer base for BIVIGAM.

The foregoing increase in IVIG revenues in the second quarter of 2023 was partially offset by a $1.4 million decrease in third-party plasma sales by our Plasma Collection Centers business segment.

We recorded total revenues of $67.3 million during the three months ended September 30, 2023, as compared to $41.1 million during the three months ended September 30, 2022, an increase of $26.2 million, or approximately 64%.

The increase is

primarily related to increased sales of BIVIGAM and ASCENIV in 2023 of $30.9 million, as we continue to experience increased physician, payer and patient acceptance and utilization of ASCENIV and expand our customer base for BIVIGAM.

The foregoing increase in IVIG revenues in the third quarter of 2023 was partially offset by a $3.1 million decrease in third-party plasma sales by our Plasma Collection Centers business segment.

During the first

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Cost of Product Revenue and Gross Profit

Cost of product revenue was $43.4 million for the three months ended June 30, 2023, as compared to $26.1 million for the three months ended June 30, 2022.

This increase is primarily attributable to volume-driven

increases in product revenue costs related to the increased sales of our IVIG products of $16.9 million and to the inventory losses resulting from the IT disruption in the amount of $2.1 million, partially offset by $1.5 million of lower product

revenue costs related to plasma sales.

For the three months ended June 30, 2023, we had gross profit of $16.7 million, as compared to $7.8 million for the same period of a year ago, which represents an increase of $8.9 million.

As a result, we achieved a

gross margin of 27.8% in the second quarter of 2023 as compared to 22.9% in the second quarter of 2022.

This improvement is mainly due to the increase in IVIG product revenues and, to a lesser extent, the absence of lower margin NSP sales in

Cost of product revenue was $42.6 million for the three months ended September 30, 2023, as compared to $31.4 million for the three months ended September 30, 2022.

This increase is primarily attributable to

volume-driven increases in product revenue costs related to the increased sales of BIVIGAM and ASCENIV of $14.9 million, partially offset by $2.7 million of lower product revenue costs related to plasma sales and a reduction in unabsorbed

manufacturing costs in 2023 of $0.7 million.

For the three months ended September 30, 2023, we had gross profit of $24.7 million, as compared to $9.7 million for the same period of a year ago, which represents an increase of $15.0 million.

As a result, we

achieved a gross margin of 36.6% in the third quarter of 2023 as compared to 23.5% in the third quarter of 2022.

The improvement in gross margin is mainly driven by the substantial increase in our IVIG product revenues, higher gross margins on

BIVIGAM sales in the third quarter of 2023 as compared to the third quarter of 2022 and a more favorable overall product mix toward increased sales of our higher margin ASCENIV product in 2023 as compared to 2022.

Research and Development Expenses

Research and development (“R&D”) expenses totaled $1.4 million for the second quarter of 2023, as compared to $0.9 million for the second quarter of 2022.

The increase is primarily due to higher expenditures

related to the BIVIGAM post-marketing commitments we have with the FDA, which were required to be completed by June of 2023 (see Note 10 to the consolidated financial statements).

Research and development (“R&D”) expenses totaled $0.6 million for the third quarter of 2023, as compared to $1.0 million for the third quarter of 2022.

The decrease is primarily due to lower expenditures related

to the BIVIGAM post-marketing commitments, which were completed in June of 2023 (see Note 10 to the consolidated financial statements) as required by the FDA.

Plasma Center Operating Expenses

Plasma Center Operating Expenses decreased from $3.9 million in the second quarter of 2022 to $1.3 million in the second quarter of 2023.

As a result of our plasma center expansion initiatives which have resulted in

10 plasma centers currently collecting plasma, we have more than doubled the amount of plasma collected in the second quarter of 2023 as compared to the second quarter of 2022.

In addition, as a result of changes in the market price of NSP and

the impact on the net realizable value of our plasma inventory, the amount of plasma center costs we capitalized into inventory increased by approximately $10.9 million for the three months ended June 30, 2023 as compared to the same period of a

This amount was largely offset by increases in donor fees of $3.3 million, compensation, benefits and temporary labor of $1.3 million, softgoods and supplies of $1.7 million, donor testing expenses of $1.2 million, depreciation of $0.3

million, software maintenance expense of $0.2 million and utilities, janitorial and security services of $0.1 million.

In addition, our plasma center collections and operating costs were adversely impacted by approximately $0.7 million due to the

temporary closing of our plasma collection centers to restore their IT systems as a result of the IT disruption.

Plasma Center Operating Expenses decreased from $4.9 million for the three months ended September 30, 2022 to $0.5 million for the three months ended September 30, 2023.

As a result of our plasma center expansion

initiatives which have resulted in 10 plasma centers currently collecting plasma, we were able to double the amount of plasma collected in the third quarter of 2023 as compared to the third quarter of 2022.

In addition, as a result of changes in

the market price of NSP and the impact on the net realizable value of our plasma inventory, coupled with a reduction in the cost per liter to collect plasma, the amount of plasma center costs we capitalized into inventory increased by $11.6

million for the three months ended September 30, 2023 as compared to the same period of a year ago.

This amount was partially offset by increases in donor fees of $3.3 million, compensation, benefits and temporary labor of $0.9 million, softgoods

and supplies of $1.0 million, donor testing expenses of $1.3 million, depreciation of $0.2 million and software maintenance expense of $0.4 million.

Amortization of Intangibles

Amortization expense pertains to the amortization of intangible assets acquired in a 2017 acquisition transaction and was $0.2 million for the three months ended June 30, 2023 and 2022.

Amortization expense pertains to the amortization of intangible assets acquired in a 2017 acquisition transaction and was $0.2 million for the three months ended September 30, 2023 and 2022.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $14.2 million for the three months ended June 30, 2023, an increase of $2.3 million from the three months ended June 30, 2022.

The increase reflects

increases in employee-related costs, including salaries, benefits, stock-based compensation, travel, relocation and recruiting, in the amount of $0.9 million, data services and market intelligence fees in support of the continued ASCENIV and

BIVIGAM commercialization efforts in the amount of $0.7 million, marketing and advertising expenses of $0.2 million, utilities of $0.1 million and software maintenance fees of $0.1 million.

Loss from Operations

Our operating loss was $0.5 million for the second quarter of 2023, as compared to $9.2 million for the second quarter of 2022.

The $8.7 million decrease in operating loss was mainly due to the improved gross profit

of $8.9 million, partially offset by the increases in total operating expenses of $0.2 million.

Selling, general and administrative (“SG&A”) expenses were $14.7 million for the three months ended September 30, 2023, an increase of $1.8 million from the three months ended September 30, 2022.

reflects increases in employee-related costs, including salaries, benefits, stock-based compensation, travel, relocation and recruiting, in the amount of $0.5 million, state and local taxes of $0.5 million, insurance expense of $0.4 million, data

services and market intelligence fees in support of the continued ASCENIV and BIVIGAM commercialization efforts in the amount of $0.3 million and marketing and advertising expenses of $0.2 million.

Income/Loss from Operations

Our operating income was $8.7 million for the third quarter of 2023, as compared to an operating loss of $9.3 million for the third quarter of 2022.

The $18.0 million increase in operating income was mainly due to

the improved gross profit of $15.0 million, as well as the reduction in total operating expenses of $3.0 million, which was driven by the reduction in plasma center operating expenses.

Interest Expense

Interest expense for the three months ended June 30, 2023 was $6.3 million, as compared to $4.6 million for the three months ended June 30, 2022.

Interest expense for the three months ended September 30, 2023 was $6.4 million, as compared to $5.6 million for the three months ended September 30, 2022.

The increase is mainly due to rising interest rates on the

indebtedness underlying our senior credit facility (see “Liquidity and Capital Resources”), increases in debt principal resulting from “in kind” interest paid in the form of additional indebtedness and higher amortization of debt discount in

indebtedness underlying our senior credit facility (see “Liquidity and Capital Resources”) and, to a lesser extent, increases in debt principal resulting from “in kind” interest paid in the form of additional indebtedness.

Other Income (Expense), Net

Other income, net, for the three months ended June 30, 2023 was $0.4 million, as compared to other expense, net, of $17,000 for the three months ended June 30, 2022.

The increase is mainly due to an increase in

interest income of approximately $0.4 million in 2023.

Our net loss was $6.4 million for the second quarter of 2023, as compared to $13.8 million for the second quarter of 2022.

The $7.4 million decrease in net loss was mainly due to the narrowed operating loss of $8.7

million attributable to the increased revenues and gross profit and the increase in interest income of $0.4 million, partially offset by the $1.7 million increase in interest expense.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

The following table presents a summary of the changes in our results of operations for the six months ended June 30, 2023, our second fiscal quarter, compared to the three months ended June 30,

Six Months Ended June 30,

Increase (Decrease)

Other income, net, for the three months ended September 30, 2023 was $0.3 million, as compared to other expense, net, of $2,000 for the three months ended September 30, 2022.

The increase is mainly due to an increase

in interest income of approximately $0.4 million in 2023.

Net Income/Loss

Our net income was $2.6 million for the third quarter of 2023, as compared to a net loss of $14.9 million for the third quarter of 2022.

This $17.5 million improvement in our results of operations was primarily due

to the increase in operating income of $18.0 million discussed above.

Although we recorded net income for the three months ended September 30, 2023, we did not record any income tax provision or benefit for this period, as we believe our net

operating loss carryforwards are sufficient to offset any associated income tax liability.

In addition, we have retained the full valuation allowance against our deferred tax assets as of September 30, 2023, as we do not believe our net income

for this reporting period constitutes adequate positive evidence that we will generate sufficient future taxable income to realize our deferred tax assets.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

The following table presents a summary of the changes in our results of operations for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022:

Nine Months Ended September 30,

Cost of product revenue

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Selling, general and administrative expenses

Loss from operations

Income (loss) from operations

Interest expense

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Adjusted EBITDA *

* - See Non-GAAP Financial Measures appearing at the end of this discussion

We recorded total revenues of $117.0 million during the six months ended June 30, 2023, as compared to $63.0 million during the six months ended June 30, 2022, an increase of $54.0 million, or approximately 86%.

increase is primarily related to increased sales of our immunoglobulin products, mainly ASCENIV and BIVIGAM, generated by our Boca Facility manufacturing operations in 2023 of $51.5 million, as we continue to experience increased physician, payer

and patient acceptance and utilization of ASCENIV and expand our customer base for BIVIGAM.

We also benefitted from an increase in sales of NSP through our Plasma Collection Centers business segment of $2.5 million.

We recorded total revenues of $184.3 million for the nine months ended September 30, 2023, as compared to $104.1 million for the nine months ended September 30, 2022, an increase of $80.2 million, or approximately

The increase is primarily related to increased sales of our immunoglobulin products, mainly ASCENIV and BIVIGAM, generated by our Boca Facility manufacturing operations in 2023 of $80.9 million, as we continue to experience increased

physician, payer and patient acceptance and utilization of ASCENIV and expand our customer base for BIVIGAM, partially offset by a decrease in sales of plasma in our Plasma Collection Centers business segment of $0.6 million.

Cost of Product Revenue and Gross Profit

Cost of product revenue was $83.8 million for the three months ended June 30, 2023, as compared to $51.6 million for the six months ended June 30, 2022.

This increase is primarily attributable to volume-driven

increases in product revenue costs related to the increased sales of our immunoglobulin products and NSP of $32.0 million and $1.8 million, respectively.

Cost of product revenue was also impacted by the inventory losses of $2.1 million related to

the IT disruption, partially offset by a decrease in other manufacturing expenses of approximately $3.7 million in the first half of 2023 as compared to the same period of a year ago, mainly due to a shorter routine shutdown of the Boca Facility

in 2023 as compared to 2022.

For the six months ended June 30, 2023, we had gross profit of $33.2 million, as compared to $11.4 million for the same period of a year ago.

This gross profit improvement of $21.8 million was primarily due to the

Cost of product revenue was $126.5 million for first nine months of 2023, as compared to $83.0 million for the first nine months of 2022.

This increase is primarily attributable to volume-driven increases in product

revenue costs related to the increased sales of our immunoglobulin products of $45.5 million.

Cost of product revenue was also impacted by the inventory losses of $2.1 million related to the June 2023 IT disruption, partially offset by a decrease

in other manufacturing expenses of approximately $2.7 million in 2023, mainly due to a shorter planned shutdown of the Boca Facility in 2023 as compared to 2022, and lower plasma product revenue costs of $1.5 million.

For the nine months ended September 30, 2023, we had gross profit of $57.9 million, as compared to $21.1 million for the same period of a year ago.

This gross profit increase of $36.8 million was primarily due to the

revenue increases and the reduction in other manufacturing costs discussed above as we elected to extend our otherwise-routine plant shutdown in the first quarter of 2022 in order to complete certain projects.

As a result, we achieved a gross

margin of 28.4% in the first half of 2023 as compared to 18.1% in the first half of 2022.

margin of 31.4% in the nine months of 2023 as compared to 20.3% in the nine months of 2022.

Research and Development Expenses

Research and development (“R&D”) expenses totaled $2.3 million for the first six months of 2023, as compared to $1.5 million for the first six months of 2022.

The increase is primarily due to higher expenditures

related to the BIVIGAM post-marketing commitments we have with the FDA, which were required to be completed by June of 2023.

R&D expenses totaled $2.9 million for the first nine months of 2023, as compared to $2.5 million for the first nine months of 2022.

The increase is primarily due to higher expenditures related to the BIVIGAM and

ASCENIV post-marketing commitments we have with the FDA.

Plasma Center Operating Expenses

Plasma Center Operating Expenses decreased from $7.9 million in the first six months of 2022 to $3.1 million in the first six months of 2023.

As a result of our plasma center expansion initiatives, and our more than

doubling the number of liters of plasma collected in the first half of 2023 as compared to the first half of 2022, coupled with the changes in the market price of NSP and its impact on the net realizable value of our plasma inventory, the amount

of plasma center costs we capitalized into inventory increased by approximately $21.5 million in the first half of 2023 as compared to the same period of a year ago.

This amount was largely offset by increases in donor fees of $6.7 million,

compensation, benefits and temporary labor of $2.7 million, softgoods and supplies of $3.0 million, donor testing expenses of $2.3 million, depreciation of $0.5 million, software maintenance expense of $0.4 million, utilities, janitorial and

security services of $0.3 million, travel expenses of $0.1 million, transportation costs of $0.1 million, advertising expense of $0.1 million, repairs and maintenance expense of $0.1 million and rent of $0.2 million.

In addition, our plasma

center collections and operating costs were unfavorably impacted by approximately $0.7 million due to the temporary closing of our plasma collection centers while their IT systems were restored.

Plasma Center Operating Expenses decreased from $12.8 million in the first nine months of 2022 to $3.6 million in the first nine months of 2023.

As a result of our plasma center expansion initiatives, which resulted

in our more than doubling the number of liters of plasma collected, with a corresponding reduction in the cost per liter, for the first nine months of 2023 as compared to the first nine months of 2022, coupled with the changes in the market

price of NSP and its impact on the net realizable value of our plasma inventory, the amount of plasma center costs we capitalized into inventory increased by approximately $33.3 million in 2023.

This amount was largely offset by increases in

donor fees of $10.0 million, compensation, benefits and temporary labor of $3.7 million, softgoods and supplies of $4.0 million, donor testing expenses of $3.5 million, depreciation of $0.7 million, software maintenance expense of $0.8 million,

utilities of $0.2 million, travel expenses of $0.1 million, transportation costs of $0.1 million, advertising expense of $0.1 million, repairs and maintenance expense of $0.1 million and rent of $0.2 million.

In addition, our plasma center

collections and operating costs were unfavorably impacted by approximately $0.7 million due to the temporary closing of our plasma collection centers while their IT systems were restored.

Amortization of Intangibles

Amortization expense pertains to the amortization of intangible assets acquired in a 2017 acquisition transaction and was $0.4 million for the six months ended June 30, 2023 and 2022.

Amortization expense pertains to the amortization of intangible assets acquired in a 2017 acquisition transaction and was $0.5 million for the nine months ended September 30, 2023 and 2022.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $28.8 million for the six months ended June 30, 2023, an increase of $3.1 million from the six months ended June 30, 2022.

The increase reflects higher

expenses for data services and market intelligence fees in support of the continued ASCENIV and BIVIGAM commercialization efforts in the amount of $1.4 million, employee-related costs including salaries, benefits, stock-based compensation,

travel, relocation and recruiting of $0.6 million, marketing and advertising expenses of $0.3 million, insurance expense of $0.2 million, software maintenance expense of $0.3 million and utilities of $0.2 million.

Loss from Operations

Our operating loss was $1.3 million for the first six months of 2023, as compared to $24.0 million for the first six months of 2022.

This $22.7 million improvement in operating loss was mainly due to the improved

gross profit of $21.8 million and the reduction in plasma center operating expenses of $4.8 million, partially offset by the increases in R&D and SG&A.

SG&A expenses were $43.5 million for the nine months ended September 30, 2023, an increase of $4.9 million from the nine months ended September 30, 2022.

The increase reflects higher expenses for data services

and market intelligence fees in support of the continued ASCENIV and BIVIGAM commercialization efforts in the amount of $1.7 million, employee-related costs including salaries, benefits, stock-based compensation, travel, relocation and recruiting

of $1.2 million, marketing and advertising expenses of $0.4 million, insurance expense of $0.6 million, state and local taxes of $0.6 an software maintenance expense of $0.4 million.

Income/Loss from Operations

For the first nine months of 2023, we had operating income of $7.4 million, as compared to an operating loss was $33.3 million for the first nine months of 2022.

The $40.7 million increase in operating income was

mainly due to the improved gross profit of $36.8 million and the reduction in plasma center operating expenses of $9.2 million, partially offset by the increases in R&D and SG&A.

Interest Expense

Interest expense for the six months ended June 30, 2023 was $12.4 million, as compared to $8.0 million for the six months ended June 30, 2022.

The increase is mainly due to approximately $56.7 million of additional

debt principal resulting from the refinancing of our senior credit facility on March 23, 2022 (see Note 7 to the consolidated financial statements and “Liquidity and Capital Resources”), including interest payments made “in kind” in the form of

additional indebtedness of approximately $5.0 million, as well as an increase in the stated interest rate on our senior debt from 10.75% in 2022 to as high as 14.4% at certain points in fiscal 2023.

Interest expense for the nine months ended September 30, 2023 was $18.8 million, as compared to $13.5 million for the nine months ended September 30, 2022.

The increase is mainly due to approximately $57.7 million of

additional debt principal resulting from the refinancing of our senior credit facility on March 23, 2022 (see Note 7 to the consolidated financial statements and “Liquidity and Capital Resources”), including interest payments made “in kind” in

the form of additional indebtedness of approximately $6.0 million, as well as an increase in the stated interest rate on our senior debt from 10.75% in 2022 to as high as 14.4% at certain points in fiscal 2023.

Other Income (Expense), Net

Other income, net, for the six months ended June 30, 2023 was $0.5 million, as compared to other expense, net, of $0.2 million for the six months ended June 30, 2022.

The increase is mainly due to an increase in

interest and other income of approximately $0.5 million in 2023, and to several non-recurring non-operational charges in 2022 of approximately $0.2 million.

Our net loss was $13.2 million for the first six months of 2023, as compared to $38.8 million for the first six months of 2022.

The $25.6 million decrease in net loss was mainly due to the narrowed operating loss of

$22.7 million mainly attributable to the increased revenues and gross profit and the loss on extinguishment of debt of $6.7 million we recorded in the first quarter of 2022 in connection with the refinancing of our senior credit facility,

partially offset by the increase in interest expense.

Other income, net, for the nine months ended September 30, 2023 was $0.8 million, as compared to other expense, net, of $0.2 million for the nine months ended September 30, 2022.

The increase is mainly due to an

increase in interest and other income of approximately $1.0 million in 2023 due to higher interest earned on our cash balances in 2023.

Our net loss was $10.6 million for the first nine months of 2023, as compared to $53.7 million for the first nine months of 2022.

The $43.1 million decrease in net loss was mainly due to the improvement in operating

income/loss of $40.7 million mainly attributable to the increased revenues and gross profit, the loss on extinguishment of debt of $6.7 million we recorded in the first quarter of 2022 in connection with the refinancing of our senior credit

facility and $1.0 million of higher interest income, partially offset by the $5.3 million increase in interest expense.

Non-GAAP Financial Measures

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA and Adjusted Net Loss

EBITDA, Adjusted EBITDA and Adjusted net loss are important non-GAAP financial measures used by our management and board of directors to assess our operating performance.

We use EBITDA, Adjusted EBITDA and Adjusted

net loss as key performance measures because we believe that they facilitate operating performance comparisons from period to period that exclude, in the case of Adjusted net loss, one-time and non-recurring items and in the case of EBITDA and

Adjusted EBITDA potential differences driven by the impact of variations of non-cash items such as depreciation and amortization, as well as, in the case of Adjusted EBITDA, stock-based compensation or certain one-time and non-recurring items.

addition, we believe that EBITDA, Adjusted EBITDA and Adjusted net loss and similar measures are widely used by investors, securities analysts, ratings agencies and other parties in evaluating companies in our industry as a measure of financial

performance and debt-service capabilities.

See below for a reconciliation of our EBITDA, Adjusted EBITDA and Adjusted net loss to net income/loss, the most directly comparable financial measure calculated and presented in accordance with U.S.

Because EBITDA, Adjusted EBITDA and Adjusted net loss are measures not deemed to be in accordance with U.S.

GAAP and are susceptible to varying calculations, our EBITDA, Adjusted EBITDA and Adjusted net loss may not

be comparable to similarly titled measures of other companies, including companies in our industry, because other companies may calculate EBITDA, Adjusted EBITDA and Adjusted net loss in a different manner than we calculate these measurements.

Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses.

EBITDA, Adjusted EBITDA

and Adjusted net loss are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income/loss, net income/loss or as an indicator of operating performance and should not be

considered in isolation or as a substitute for measures of performance prepared in accordance with U.S.

The following table presents the reconciliation of net loss to EBITDA and Adjusted EBITDA for the three and six months ended June 30,

2023 and 2022:

Three Months Ended June 30,

Six Months Ended June 30,

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA

EBITDA and Adjusted EBITDA are important non-GAAP financial measures used by our management and Board of Directors to assess our operating performance.

We use EBITDA and Adjusted EBITDA as key performance measures

because we believe that they facilitate operating performance comparisons from period to period that exclude potential differences driven by the impact of variations of non-cash items such as depreciation and amortization, as well as, in the case

of Adjusted EBITDA, stock-based compensation or certain one-time and non-recurring items.

In addition, we believe that EBITDA, Adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and other

parties in evaluating companies in our industry as a measure of financial performance and debt-service capabilities.

See below for a reconciliation of our EBITDA and Adjusted EBITDA to net income/loss, the most directly comparable financial

measure calculated and presented in accordance with U.S.

Because EBITDA and Adjusted EBITDA are measures not deemed to be in accordance with U.S.

GAAP and are susceptible to varying calculations, our EBITDA and Adjusted EBITDA may not be comparable to similarly titled

measures of other companies, including companies in our industry, because other companies may calculate EBITDA and Adjusted EBITDA in a different manner than we calculate these measurements.

Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses.

EBITDA and Adjusted EBITDA are not intended to represent cash flows

for the periods presented, nor have they been presented as an alternative to operating income/loss, net income/loss or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of

performance prepared in accordance with U.S.

The following table presents the reconciliation of net loss to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss)

Interest expense

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Adjusted EBITDA

Adjusted EBITDA increased by $26.9 million for the six months ended June 30, 2023 as compared to the same period of a year ago.

The improvement is driven primarily by the lower net loss attributable to increased

sales and gross profit in 2023, as well as responsible and fiscal operational management of the business.

The following table presents the reconciliation of net loss to Adjusted net loss for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30,

Six Months Ended June 30,

IT systems disruption

Adjusted net loss

Adjusted EBITDA increased by $45.8 million for the nine months ended September 30, 2023 as compared to the same period of a year ago.

The improvement is driven primarily by the lower net loss attributable to

increased sales and gross profit in 2023, as well as continued operational oversight and cost containment efforts at both of our business segments.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2023, we had working capital of $224.3 million, primarily consisting of $161.8 million of inventory, cash and cash equivalents of $62.5 million and $36.7 million of accounts receivable, partially offset

by current liabilities of $42.0 million, as compared to working capital at December 31, 2022 of $231.1 million, primarily consisting of $163.3 million of inventory, cash and cash equivalents of $86.5 million and accounts receivable of $15.5

At September 30, 2023, we had working capital of $231.9 million, primarily consisting of $163.1 million of inventory, cash and cash equivalents of $74.2 million and $31.3 million of accounts receivable, partially

offset by current liabilities of $41.8 million, as compared to working capital at December 31, 2022 of $231.1 million, primarily consisting of $163.3 million of inventory, cash and cash equivalents of $86.5 million and accounts receivable of

$15.5 million, partially offset by current liabilities of $39.3 million.

We have incurred an accumulated deficit of $491.2 million since inception and had negative cash flows from operations of $20.8 million and $38.8 million for the six months ended

June 30, 2023 and 2022, respectively, and $59.5 million and $112.4 million for the years ended December 31, 2022 and 2021, respectively.

We have funded our operations over the past few years primarily from the sale of our equity and debt

We have incurred an accumulated deficit of $488.6 million since inception and although we had positive cash flow from operations of $12.0 million for the three months ended

September 30, 2023, we had negative cash flows from operations of $8.8 million and $52.1 million for the nine months ended September 30, 2023 and 2022, respectively, and $59.5 million and $112.4 million for the years ended December 31, 2022 and

2021, respectively.

We have funded our operations over the past few years primarily from the sale of our equity and debt securities.

Our material cash requirements are primarily comprised of:

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and other manufacturing and laboratory testing materials and single use disposables.

We expect that we will not be able to generate a sufficient amount of product revenue to achieve profitability until the beginning of 2024.

We currently anticipate, based upon our projected revenue and expenditures,

that our current cash, cash equivalents and accounts receivable will be sufficient to fund our operations, as currently conducted, through the end of the third quarter of 2024, by which time we believe we will have been generating positive cash

flow from operations.

This time frame may change based upon several factors, including the success of our commercial efforts with respect to the sale of our products and the acceptability of our immune globulin products by physicians, patients or

payers, and whether or not the assumptions underlying our projected revenues and expenses are correct.

If we are unable to achieve positive cash flow by the beginning of 2024, we may need to raise additional capital and if such capital is not

available due to widespread liquidity constraints or significant market instability that could result from the COVID-19 pandemic, inflationary pressures or other factors beyond our control, we may have to delay, curtail or eliminate some of our

commercialization efforts or product development activities.

If we are unable to generate sufficient revenue to achieve positive cash flow by the beginning of 2024 and need to raise additional capital, we may decide to do so through public or

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

The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders and, in such

event, the value and potential future market price of our common stock may decline.

ADMA continues to evaluate a variety of strategic alternatives.

While the exploration of value-creating opportunities remains a top corporate priority for us, we have terminated our financial advisory agreement

with Morgan Stanley.

Although we achieved net income of $2.6 million for the three months ended September 30, 2023, at present we cannot be certain that we will be able to continue to generate a sufficient amount of product revenue to

maintain profitability on an ongoing basis.

We currently anticipate, based upon our projected revenue and expenditures, that our current cash, cash equivalents and accounts receivable will be sufficient to fund our operations, as currently

conducted, through the end of fiscal 2024, during which time we believe that we will continue to generate positive cash flows from operations.

Our current outlook with respect to cash flows and profitability may change based upon several factors,

including the success of our commercial efforts with respect to the sale of our products and the continued acceptability of our immune globulin products by physicians, patients or payers, and whether or not the assumptions underlying our

projected revenues and expenses are correct.

If we are unable to maintain positive cash flow throughout fiscal 2024, we may need to raise additional capital and if such capital is not available due to widespread liquidity constraints or

significant market instability that could result from international or global conflicts, economic uncertainty, COVID-19 or other pandemics, inflationary pressures or other factors beyond our control, we may have to delay, curtail or eliminate

some of our commercialization efforts or product development activities.

If we are unable to generate sufficient revenue to maintain positive cash flow throughout fiscal 2024 and need to raise additional capital, we may decide to do so through

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

The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders and,

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

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

On March 23, 2022, (the “Hayfin Closing Date”) we and all of our subsidiaries entered into a Credit and Guaranty Agreement (the “Hayfin Credit Agreement”) with Hayfin Services LLP (“Hayfin”).

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As a result, our outstanding debt principal on the Hayfin

Loans will increase each month as long as we elect to continue to pay a portion of our interest obligation “in kind.” On the Hayfin Closing Date and as of June 30, 2023, the stated interest rate on the Hayfin Loans was 10.75% and 13.7%,

Loans will increase each month as long as we elect to continue to pay a portion of our interest obligation “in kind.” On the Hayfin Closing Date and as of September 30, 2023, the stated interest rate on the Hayfin Loans was 10.75% and 13.9%,

respectively.

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based on current interest rates, after giving effect to the “in kind” interest of 2.5% per annum, but without giving effect to the Hayfin Delayed Draw Loan, which we have yet to draw upon.

As of June 30, 2023, the outstanding principal balance on

the Hayfin Loans is $156.7 million.

On the Hayfin Maturity Date, we will pay Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any accrued and unpaid interest thereon, as well as an exit fee of 1.0% of the outstanding

As of September 30, 2023, the outstanding principal

balance on the Hayfin Loans is $157.7 million.

On the Hayfin Maturity Date, we must 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.

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pay dividends;

repay other certain indebtedness;

repay certain other indebtedness;

engage in certain affiliate transactions;

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December 31, 2026 and each fiscal quarter thereafter.

As of June 30, 2023, we were in compliance with all of the financial covenants contained in the Hayfin Credit Agreement.

As of September 30, 2023, we were in compliance with all of the financial covenants contained in the Hayfin Credit Agreement.

On December 9, 2022, we completed an underwritten public offering whereby we issued 24,125,873 shares of our common stock.

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We currently intend to use any net proceeds from the sale of our common stock under the Distribution

Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, funding expansion of plasma collection centers, working capital, capital

expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities.

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

Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, working capital, capital expenditures, expansion and resources for

commercialization activities, and other potential research and development and business opportunities.

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

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

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

2 unchanged sentences

Net Cash Used in Operating Activities

Cash used in operations for the six months ended June 30, 2023 was $20.8 million, a decrease of $18.1 million from the same period of a year ago, mainly due to a lower net loss after non-cash items and favorable

Cash used in operations for the nine months ended September 30, 2023 was $8.8 million, a decrease of $43.3 million from the same period of a year ago, mainly due to a lower net loss after non-cash items and favorable

changes in inventories, accounts payable and accrued expenses in 2023, partially offset by unfavorable changes in accounts receivable.

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

Six Months Ended June 30,

Nine Months Ended September 30,

Non-cash expenses, gains and losses

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Net Cash Used in Investing Activities

Net cash used in investing activities for the six months ended June 30, 2023 and 2022 was $2.8 million and $6.8 million, respectively, and is comprised of capital expenditures for the construction and buildout of new

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

The decrease in capital expenditures in 2023 is due to the completion of the construction and buildout of our 10 plasma collection facilities, with the

10 th facility opening in the first quarter of 2023.

While we currently have no firm commitments for capital expenditures, we expect our total capital expenditures

will be between $5.0 million and $7.0 million for the remainder of fiscal 2023, mainly for additional upgrades to the Boca Facility manufacturing operations and related systems.

Net cash used in investing activities for the nine months ended September 30, 2023 and 2022 was $3.6 million and $10.2 million, respectively, and is comprised of capital expenditures for the construction and buildout

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

The decrease in capital expenditures in 2023 is due to the completion of the construction and buildout of our 10 plasma collection facilities,

with the 10 th facility opening in the first quarter of 2023.

While we currently have no firm commitments for capital expenditures, we expect our total capital

expenditures will be between $2.0 million and $4.0 million for the remainder of fiscal 2023, mainly for additional upgrades to the Boca Facility manufacturing operations and related operational systems.

Net Cash Provided by Financing Activities

Cash used in financing activities was $0.4 million for the six months ended June 30, 2023, as compared to cash provided by financing activities of $47.0 million for the six months ended June 30, 2022, which mainly

consisted of proceeds received from the Hayfin Credit Facility, net of payments to retire our previously existing credit facility with Perceptive (see Note 7 to the consolidated financial statements).

Cash provided by financing activities was $5,000 for the nine months ended September 30, 2023, as the net proceeds we received from the exercise of stock options was offset by the shares that were withheld and the

related taxes we paid on RSUs that vested during the period.

Cash provided by financing activities of $46.1 million for the nine months ended September 30, 2022 mainly consisted of proceeds received from the Hayfin Credit Facility, net of

payments to retire our previously existing credit facility with Perceptive (see Note 7 to the consolidated financial statements).

Effect of Inflation

Inflation impacted a number of facets of our business during the six months ended June 30, 2023 and 2022 at both of our business segments.

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

consumable supplies, services for repairs and maintenance of our facilities, utilities, shipping and freight charges, fuel surcharges and labor costs, among other expenses.

Based upon publicly available information and reports form the U.S.

Inflation impacted a number of facets of our business during the nine months ended September 30, 2023 and 2022 at both of our business segments.

We experienced price increases for, among other items, certain raw

materials, consumable supplies, services for repairs and maintenance of our facilities, utilities, shipping and freight charges, fuel surcharges and labor costs, among other expenses.

Based upon publicly available information and reports form the

Government, we expect this trend to continue through 2023 and potentially longer, which could potentially have a significant impact on our future results of operations.

In addition, some of our third-party plasma purchase agreements provide for

annual price increases that are tied to various consumer price indices, which have resulted in higher than historical percentage price increases and has resulted in and is expected to continue to result in higher source plasma and other raw

In addition, some of our third-party plasma purchase agreements provide

for annual price increases that are tied to various consumer price indices, which have resulted in higher than historical percentage price increases and has resulted in and is expected to continue to result in higher source plasma and other raw

material and supplies costs for the remainder of 2023 and into future periods.

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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 2. Management’s Discussion and Analysis