ADMA BIOLOGICS, INC. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Annual Report on Internal Control Over Financial Reporting Management’s annual report on internal control over financial reporting (as defined in Rule 13a- 15(f) under the Exchange Act) is included with the financial statements reflected in Item 8 of this Annual Report on Form 10-K and is incorporated herein by reference. Report of Independent Registered Public Accounting Firm The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by CohnReznick LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8 of this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 80 Table of Contents Item 9B. Other Information None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. PART III Item 10. Directors, Executive Officers and Corporate Governance Information required to be disclosed by this Item with respect to our executive officers is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Executive Officers and Director and Officer Compensation: Executive Officers” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. Information required to be disclosed by this Item about our Board of Directors (the “Board”) is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Proposal No. 1: Election of Directors” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. To the extent necessary, information required to be disclosed by this Item about the Section 16(a) compliance of our directors and executive officers is incorporated into this Annual Report on Form 10-K, as applicable, by reference from the section entitled “Delinquent Section 16(a) Reports” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. Information required to be disclosed by this Item about our Board, the Audit Committee of our Board, our audit committee financial expert, our Code of Ethics and Business Conduct, and other corporate governance matters is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Corporate Governance” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. The text of our Code of Ethics and Business Conduct, which applies to our directors and employees (including our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions), is posted in the “Corporate Governance” section of the Investors section of our website, www.admabiologics.com. A copy of the Code of Ethics and Business Conduct can be obtained free of charge on our website. We intend to disclose on our website any amendments to, or waivers from, our Code of Ethics and Business Conduct that are required to be disclosed pursuant to the rules of the SEC and The Nasdaq Stock Market. The information presented on our website is not a part of this Annual Report on Form 10-K and the reference to our website is intended to be an inactive textual reference only. Item 11. Executive Compensation Information required to be disclosed by this Item is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Executive Officers and Director and Officer Compensation” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. 81 Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required to be disclosed by this Item is incorporated into this Annual Report on Form 10-K by reference from the sections entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required to be disclosed by this Item is incorporated in this Annual Report on Form 10-K by reference from the section entitled “Certain Relationships and Related Transactions, and Director Independence” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. Item 14. Principal Accounting Fees and Services The information required to be disclosed by this Item is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Audit and Other Fees” contained in our definitive proxy statement for our 2024 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2023. PART IV Item 15. Exhibits, Financial Statement Schedules Financial Statement Schedules (a) The following documents are filed as part of this Annual Report on Form 10-K: (1) Consolidated Financial Statements. Page Management’s Annual Report on Internal Control Over Financial Reporting F-2 Report of Independent Registered Public Accounting Firm (PCAOB ID 596) F-3 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-5 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 F-6 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 F-8 Notes to Consolidated Financial Statements F-9 (2) Financial Statement Schedules. Required information is included in the footnotes to the financial statements. (3) Index to Exhibits. 82 Table of Contents INDEX TO EXHIBITS Exhibit No. Description 3.1 Second Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 23, 2019). 3.1.1 Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of ADMA Biologics, Inc., dated as of May 27, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 28, 2021). 3.2 Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 7, 2016). 3.3 Certificate of Designation of Series A Junior Participating Preferred Stock of ADMA Biologics, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 21, 2021). 4.1 Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to Amendment No. 1 to the Company’s Current Report on Form 8-K/A, filed with the SEC on March 29, 2012). 4.2 Form of Warrant Agreement, dated May 13, 2016, issued by the Company to Oxford Finance LLC (incorporated herein by reference to Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2016). 4.3 Warrant to Purchase Stock, dated October 10, 2017, issued by the Company to Marathon Healthcare Finance Fund, L.P. (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on October 11, 2017). 4.4 Warrant to Purchase Stock, dated February 11, 2019, issued by the Company to Perceptive Credit Holdings II, LP (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2019). 4.5 Warrant to Purchase Stock, dated May 3, 2019, issued by the Company to Perceptive Credit Holdings II, LP (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2019). 4.6 Warrant to Purchase Stock, dated December 8, 2020, issued by the Company to Perceptive Credit Holdings II, LP (incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 24, 2021). 4.7 Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.11 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 24, 2022). 4.8 Form of Warrant to Purchase Common Stock, in the form issued by the Company to various entities affiliated with Hayfin Services LLP, dated as of March 23, 2022 (incorporated by reference to Exhibit 4.13 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 24, 2022). 4.9 Form of Warrant to Purchase Common Stock, in the form issued by the Company to various entities affiliated with Hayfin Services LLP, dated as of May 1, 2023 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 2, 2023). 83 Table of Contents 10.1† 2007 Employee Stock Option Plan, as amended by Amendment No. 3 (incorporated herein by reference to Exhibit A to the Information Statement on Schedule 14C, filed with the SEC on October 29, 2012). 10.2† Amended and Restated ADMA Biologics, Inc. 2014 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-8, filed with the SEC on August 18, 2017). 10.3† Amended and Restated Employment Agreement, dated January 29, 2019, by and between ADMA Biologics, Inc. and Adam Grossman (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2019). 10.3.1† Amendment to Employment Agreement, dated as of September 29, 2021, by and between ADMA Biologics, Inc. and Adam Grossman (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on October 1, 2021). 10.4† Amended and Restated Employment Agreement, dated January 29, 2019, by and between ADMA Biologics, Inc. and Brian Lenz (incorporated herein by reference toExhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2019). 10.4.1† Amendment to Employment Agreement, dated as of September 29, 2021, by and between ADMA Biologics, Inc. and Brian Lenz (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on October 1, 2021). 10.5+ Plasma Purchase Agreement, dated as of November 17, 2011, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc., as amended by First Amendment to Plasma Purchase Agreement, dated as of December 1, 2011, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.9 to Amendment No. 3 to the Company’s Current Report on Form 8-K/A, filed with the SEC on June 22, 2012). 10.5.1+ Second Amendment to Plasma Purchase Agreement, dated as of December 18, 2015, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.3.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 23, 2016). 10.5.2 Third Amendment to Plasma Purchase Agreement, dated as of April 8, 2016, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.3.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2016). 10.5.3 Fourth Amendment to Plasma Purchase Agreement, dated as of June 6, 2017, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.5.4+ Fifth Amendment to Plasma Purchase Agreement, dated as of January 1, 2019, by and between Grifols Worldwide Operations Limited (as successor-in-interest to Biotest Pharmaceuticals Corporation) and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 2, 2019). 10.6+ Plasma Supply Agreement, dated as of June 6, 2017, by and between ADMA BioManufacturing, LLC and Biotest Pharmaceuticals Corporation (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 84 Table of Contents 10.6.1+ Amendment #1 to the Plasma Supply Agreement, dated as of July 19, 2018, by and between Biotest Pharmaceuticals Corporation and ADMA BioManufacturing, LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 10, 2018). 10.7 Amended and Restated Agreement for Services, effective as of January 1, 2016, as amended, by and between ADMA BioManufacturing, LLC and Areth LLC (incorporated herein by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 12, 2016). 10.8 Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2012). 10.9+ License Agreement, effective as of December 31, 2012, by and between ADMA Biologics, Inc. and Biotest AG (incorporated herein by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1, filed with the SEC on February 11, 2013). 10.9.1 First Amendment to License Agreement, dated as of June 6, 2017, by and between the Company and Biotest AG (incorporated herein by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.10 Amendment 3 to the Amended and Restated Agreement for Services, effective as of November 7, 2019, by and between ADMA BioManufacturing, LLC and Areth LLC (incorporated herein by reference to the Exhibit 10.27 to the Company’s Annual Report on Form 10-K filed March 12, 2020). 10.11 Amendment 4 to the Amended and Restated Agreement For Services Between ADMA BioManufacturing, LLC and Areth LLC (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 9, 2022). 10.12 Distribution Agreement, dated September 3, 2021, by and between ADMA Biologics, Inc. and Raymond James & Associates, Inc. (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on September 3, 2021). 10.13 Form of Retention Bonus Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 1, 2021). 10.14† ADMA Biologics, Inc. 2022 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on June 21, 2022) 10.15 Credit Agreement, dated as of December 18, 2023, by and among the Company, as Administrative Borrower, ADMA BioManufacturing, LLC, ADMA Plasma Biologics, Inc. and ADMA BioCenters Georgia Inc., each as Borrowers, certain subsidiaries of the Company, as Guarantors, from time to time party thereto, the Lenders from time to time party thereto, Ares Capital Corporation, as Administrative Agent and as Collateral Agent, and ACF FINCO I LP, as Revolving Agent (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 18, 2023) 10.16 Security Agreement, dated as of December 18, 2023, by and among the Company, ADMA BioManufacturing, LLC, ADMA Plasma Biologics, Inc. and ADMA BioCenters Georgia, Inc., as Grantors, and Ares Capital Corporation, as Collateral Agent (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 18, 2023) 85 Table of Contents 21.1* Subsidiaries of the Company. 23.1* Consent of CohnReznick LLP. 31.1* Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97* ADMA Biologics, Inc. Compensation Recoupment Policy 101* The following materials from ADMA Biologics, Inc. Form 10-K for the year ended December 31, 2023, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets at December 31, 2023 and December 31, 2022, (ii) Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021, (iii) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021; and (v) Notes to Consolidated Financial Statements. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). + Confidential treatment has been granted with respect as to certain portions of this exhibit. Such portions have been redacted and submitted separately to the SEC. ++ Portions of this exhibit and the schedules thereto have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. * Filed herewith. ** Furnished herewith. † Management compensatory plan, contract or arrangement. Item 16. Form 10-K Summary None. 86 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ADMA Biologics, Inc. Date: February 28, 2024 By: /s/ Adam S. Grossman Name: Adam S. Grossman Title: President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title Date /s/ Adam S. Grossman Adam S. Grossman President and Chief Executive Officer (Principal Executive Officer) and Director February 28, 2024 /s/ Brian Lenz Brian Lenz Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 28, 2024 /s/ Steven A. Elms Steven A. Elms Chairman of the Board of Directors February 28, 2024 /s/ Dr. Jerrold B. Grossman Dr. Jerrold B. Grossman Vice Chairman of the Board of Directors February 28, 2024 /s/ Alison Finger Alison Finger Director February 28, 2024 /s/ Bryant E. Fong Bryant E. Fong Director February 28, 2024 /s/ Lawrence P. Guiheen Lawrence P. Guiheen Director February 28, 2024 /s/ Young T. Kwon Young T. Kwon Director February 28, 2024 87 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS Page Management’s Annual Report on Internal Control Over Financial Reporting F-2 Report of Independent Registered Public Accounting Firm (PCAOB ID 596 ) F-3 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-5 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 F-6 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 F-8 Notes to Consolidated Financial Statements F-9 F-1 Table of Contents Management’s Annual Report on Internal Control Over Financial Reporting The Management of ADMA Biologics, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of our Company are being made only in accordance with authorizations of management and Directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our Company’s assets that could have a material effect on the financial statements. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of its internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023 based on those criteria. Our independent registered public accounting firm, which has audited the consolidated financial statements included in this Annual Report on Form 10-K, has also issued an audit report on the effectiveness of our internal control over financial reporting as of December 31, 2023. Their report appears on page F-3 of this Annual Report on Form 10-K. /s/ Adam S. Grossman /s/ Brian Lenz Adam S. Grossman Brian Lenz President and Chief Executive Officer Executive Vice President and Chief Financial Officer February 28, 2024 February 28, 2024 F-2 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders ADMA Biologics, Inc. Opinion on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of ADMA Biologics, Inc. and subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023 and the related notes and financial statement schedule II – valuation and qualifying accounts (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinion The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the entity’s consolidated financial statements and on the entity’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. An entity’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and directors of the entity; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. F-3 Table of Contents Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Valuation of Inventory Description of the matter As of December 31, 2023, the Company’s inventory totaled $172.9 million. As described in the notes to the consolidated financial statements, the valuation of inventory involves significant estimates relating to the capitalization of labor and overhead costs to the work in process and finished goods inventories as well as lower of cost or net realizable value considerations. Given the significance of the inventory value, the importance of inventory to the Company’s operations, the various components and the multiple locations and the complexity of the computations, auditing the inventory was challenging and involved a relatively high degree of auditor judgment and subjectivity, extensive testing, and the involvement of more senior members of the engagement team to design the appropriate responsive audit procedures and to supervise, execute and review the test results. How we addressed the matter in our audit We obtained an understanding of, and tested controls related to the Company’s process to estimate labor and overhead in the inventory as well as controls over estimating the lower of cost or net realizable value. We performed substantive procedures relating to the inventory valuation, which included verifying significant components of the valuation to supporting records, assessing the application of direct labor costs included in the valuation and assessing the appropriateness of the components of the indirect overhead pools as well as the application of such pool to the valuation. We tested the completeness and accuracy of the data used in management’s valuation and the mathematical accuracy of the direct labor and overhead applications. To assess management’s assertion that inventory is carried at the lower of cost or net realizable value, we tested subsequent sales transactions and net sales proceeds. Variable Consideration Estimates - Rebates Description of the matter As disclosed in Note 2 to the consolidated financial statements, revenue from the sale of the Company’s products is recorded net of estimated rebates, price protection arrangements and customer incentives, including prompt pay discounts, wholesaler chargebacks and other wholesaler fees. Estimated rebates are also attributable to government programs that mandate various reductions from list price, which are reflected as liabilities and settled through cash payments. Auditing the variable consideration estimates, more specifically rebates related to U.S. Medicaid, Medicare Part D, and managed care is complex because of the subjectivity of certain assumptions and judgements required to develop estimates. These significant assumptions and judgments include consideration of legal interpretations of applicable laws and regulations, historical claims experience, payer channel mix, current contract prices, unbilled claims and claims submission time lags. Additionally, auditing this matter is challenging given the Company’s limited history in selling certain of its products. How we addressed the matter in our audit We obtained an understanding of, and tested controls related to the Company’s process to estimate variable consideration as it relates to rebates, specifically U.S. Medicaid, Medicare Part D and managed care. We performed a combination of substantive procedures including recalculations of the percentages of rebates processed against related rebate eligible revenue for certain products, confirmations of underlying data used in the calculations and an evaluation of actual rebates processed against historical estimates. Our testing focused on the appropriateness of significant assumptions and mathematical accuracy used in the calculation and the completeness and accuracy of the data used in the estimates. To address the completeness of the reserves, we also assessed the historical accuracy of management’s estimates by comparing actual activity to previous estimates (lookback). Finally, we considered subsequent events and any new information after the financial statement date that would require an adjustment to the accruals. /s/ CohnReznick LLP We have served as the Company’s auditor since 2008. Parsippany, New Jersey February 28, 2024 F-4 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Years Ended December 31, 2023 and 2022 December 31, December 31, 2023 2022 (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $ 51,352 $ 86,522 Accounts receivable, net 27,421 15,505 Inventories 172,906 163,280 Prepaid expenses and other current assets 5,334 5,095 Total current assets 257,013 270,402 Property and equipment, net 53,835 58,261 Intangible assets, net 499 1,013 Goodwill 3,530 3,530 Right-to-use assets 9,635 10,485 Deposits and other assets 4,670 4,770 TOTAL ASSETS $ 329,182 $ 348,461 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 15,660 $ 13,229 Accrued expenses and other current liabilities 32,919 24,990 Current portion of deferred revenue 182 143 Current portion of lease obligations 1,045 905 Total current liabilities 49,806 39,267 Senior notes payable, net of discount 130,594 142,833 Deferred revenue, net of current portion 1,690 1,833 End of term fee 1,688 1,500 Lease obligations, net of current portion 9,779 10,704 Other non-current liabilities 419 350 TOTAL LIABILITIES 193,976 196,487 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding - - Common Stock - voting, $ 0.0001 par value, 300,000,000 shares authorized, 226,063,032 and 221,816,930 shares issued and outstanding 23 22 Additional paid-in capital 641,439 629,969 Accumulated deficit ( 506,256 ) ( 478,017 ) TOTAL STOCKHOLDERS’ EQUITY 135,206 151,974 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 329,182 $ 348,461 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years ended December 31, 2023 2022 2021 (In thousands, except share and per share data) REVENUES $ 258,215 $ 154,080 $ 80,943 Cost of product revenue 169,273 118,815 79,770 Gross profit 88,942 35,265 1,173 OPERATING EXPENSES: Research and development 3,300 3,614 3,646 Plasma center operating expenses 4,266 17,843 12,289 Amortization of intangible assets 724 715 715 Selling, general and administrative 59,020 52,458 42,897 Total operating expenses 67,310 74,630 59,547 INCOME (LOSS) FROM OPERATIONS 21,632 ( 39,365 ) ( 58,374 ) OTHER INCOME (EXPENSE): Interest income 1,617 45 35 Interest expense ( 25,027 ) ( 19,279 ) ( 13,057 ) Loss on extinguishment of debt ( 26,174 ) ( 6,670 ) - Other expense ( 287 ) ( 635 ) ( 252 ) Other expense, net ( 49,871 ) ( 26,539 ) ( 13,274 ) NET LOSS $ ( 28,239 ) $ ( 65,904 ) $ ( 71,648 ) BASIC AND DILUTED LOSS PER COMMON SHARE $ ( 0.13 ) $ ( 0.33 ) $ ( 0.51 ) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic and Diluted 223,977,315 197,874,895 139,578,538 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (In thousands, except share data) Additional Total Common Stock Paid-in Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance at December 31, 2020 104,902,888 $ 10 $ 428,704 $ ( 340,465 ) $ 88,249 Stock-based compensation - - 3,488 - 3,488 Issuance of common stock, net of offering expenses 90,846,029 9 121,135 - 121,144 Vesting of Restricted Stock Units, net of shares withheld for taxes and retired 64,900 1 ( 61 ) - ( 60 ) Net loss - - - ( 71,648 ) ( 71,648 ) Balance at December 31, 2021 195,813,817 20 553,266 ( 412,113 ) 141,173 Stock-based compensation - - 5,215 - 5,215 Issuance of common stock, net of offering expenses 24,125,873 2 64,642 - 64,644 Vesting of Restricted Stock Units, net of shares withheld for taxes 1,808,561 - ( 2,899 ) - ( 2,899 ) Warrants issued in connection with note payable - - 9,570 - 9,570 Exercise of stock options 68,679 - 175 - 175 Net loss - - - ( 65,904 ) ( 65,904 ) Balance at December 31, 2022 221,816,930 22 629,969 ( 478,017 ) 151,974 Stock-based compensation - - 6,187 - 6,187 Vesting of Restricted Stock Units, net of shares withheld for taxes 833,722 - ( 1,415 ) - ( 1,415 ) Warrants issued in connection with notes payable - - 5,595 - 5,595 Exercise of stock options 1,444,533 1 1,103 - 1,104 Cashless exercise of warrants 1,967,847 - - - - Net loss - - - ( 28,239 ) ( 28,239 ) Balance at December 31, 2023 226,063,032 $ 23 $ 641,439 $ ( 506,256 ) $ 135,206 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2023 2022 2021 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 28,239 ) $ ( 65,904 ) $ ( 71,648 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 8,332 7,113 5,496 Loss on disposal of fixed assets 182 427 221 Interest paid in kind 3,836 2,998 - Stock-based compensation 6,187 5,215 3,488 Amortization of debt discount 2,594 2,402 1,897 Loss on extinguishment of debt 26,174 6,670 - Amortization of license revenue ( 143 ) ( 143 ) ( 143 ) Changes in operating assets and liabilities: Accounts receivable ( 11,916 ) 13,072 ( 15,340 ) Inventories ( 9,626 ) ( 38,556 ) ( 43,188 ) Prepaid expenses and other current assets ( 239 ) ( 756 ) ( 1,293 ) Deposits and other assets 1,080 122 ( 1,775 ) Accounts payable 3,839 800 1,356 Accrued expenses 7,530 7,534 8,341 Other current and non-current liabilities ( 791 ) ( 502 ) 219 Net cash provided by (used in) operating activities 8,800 ( 59,508 ) ( 112,369 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 4,771 ) ( 13,911 ) ( 13,511 ) Acquisition of intangible assets ( 210 ) - - Net cash used in investing activities ( 4,981 ) ( 13,911 ) ( 13,511 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on notes payable ( 158,584 ) ( 100,000 ) - Proceeds from issuance of common stock, net of offering expenses - 64,645 121,144 Payment of debt refinancing fees ( 11,140 ) ( 2,000 ) - Proceeds from issuance of note payable 135,000 151,750 - Taxes paid on vested Restricted Stock Units ( 1,415 ) ( 2,899 ) ( 62 ) Payments on finance lease obligations ( 17 ) ( 36 ) ( 34 ) Net proceeds from the exercise of stock options 1,104 175 - Payment of end of term fee ( 1,586 ) - - Payment of deferred financing fees ( 2,351 ) ( 2,783 ) - Net cash (used in) provided by financing activities ( 38,989 ) 108,852 121,048 Net (decrease) increase in cash and cash equivalents ( 35,170 ) 35,433 ( 4,832 ) Cash and cash equivalents - beginning of year 86,522 51,089 55,921 Cash and cash equivalents - end of year $ 51,352 $ 86,522 $ 51,089 The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND BUSINESS ADMA Biologics, Inc. (“ADMA” or the “Company”) is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases. The Company’s targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or who may be immune-suppressed for medical reasons. ADMA operates through its wholly-owned subsidiaries ADMA BioManufacturing, LLC (“ADMA BioManufacturing”) and ADMA BioCenters Georgia Inc. (“ADMA BioCenters”). ADMA BioManufacturing was formed in January 2017 to facilitate the acquisition of certain assets held by the Company’s former third-party contract manufacturer, which included the U.S. Food and Drug Administration (“FDA”)-licensed BIVIGAM and Nabi-HB immunoglobulin products, and an FDA-licensed plasma fractionation manufacturing facility located in Boca Raton, FL (the “Boca Facility”). ADMA BioCenters is the Company’s source plasma collection business with ten plasma collection facilities located throughout the U.S., all of which hold an approved license with the FDA. The Company has three FDA-approved products, all of which are currently marketed and commercially available: (i) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an intravenous immune globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of Immunity, for which the Company received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; (ii) BIVIGAM (Immune Globulin Intravenous, Human), an IVIG product indicated for the treatment of PI, and for which the Company received FDA approval on May 9, 2019 and commenced commercial sales in August 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing Hepatitis B surface antigen (“HBsAg”) and other listed exposures to Hepatitis B. In addition to its commercially available immunoglobulin products, the Company generates revenues from the sale of intermediate by-products that result from the immunoglobulin production process and from time to time provides contract manufacturing and laboratory services for certain clients. 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 December 31, 2023, the Company had working capital of $ 207.2 million, including $ 51.4 million of cash and cash equivalents, accounts receivable of $ 27.4 million and $ 172.9 million of inventories, partially offset by $ 49.8 million of current liabilities. 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 and accounts receivable, along with its projected future operating cash flow, will be sufficient to fund ADMA’s operations, as currently conducted, through the end of the first quarter of 2025. However, the Company’s current outlook on cash flows and profitability may change based upon several factors, including the success of the Company’s commercial sales 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. The Company is subject to risks common to companies in the biotechnology and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, inflationary pressures, supply chain constraints, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements . 2. SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation and basis of presentation The accompanying consolidated financial statements include the accounts of ADMA and its wholly-owned subsidiaries, and have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Article 3 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). All intercompany balances have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). During the years ended December 31, 2023, 2022 and 2021, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying consolidated statements of operations. Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include rebates and chargebacks deducted from gross revenues, valuation of inventory, assumptions used in projecting future liquidity and capital requirements, assumptions used in the fair value of awards granted under the Company’s equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for the Company’s deferred tax assets. Cash and cash equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company regularly maintains cash and cash equivalents at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit. Although the Company monitors the daily cash balances in its operating accounts and adjusts the balances as appropriate, these balances could be impacted, and there could be a material adverse effect on the Company’s business, if one or more of the financial institutions with which the Company has deposits fails or is subject to other adverse conditions in the financial or credit markets. To date, the Company has not experienced a loss or lack of access to its deposited cash or cash equivalents; however, the Company cannot provide assurance that access to its cash and cash equivalents will not be impacted by adverse conditions in the financial and credit markets in the future. Accounts receivable Accounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts in the amount of $ 0.1 million at December 31, 2023 and 2022, which are recognized in the period the related revenue is recorded. The Company extends credit to its customers based upon an evaluation of each customer’s financial condition and credit history. Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis. Based on these evaluations, the Company has concluded that its credit risk is minimal (see Note 16). Inventories Raw materials inventory consists of normal source plasma (“NSP”) and Respiratory Syncytial Virus (“RSV”) high titer plasma collected at the Company’s plasma collection facilities, along with various materials purchased from suppliers, 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. F-9 Table of Contents Inventories, including plasma intended for resale and plasma intended for internal use in the Company’s manufacturing, commercialization or research and development activities, are carried at the lower of cost or net realizable value determined by the first-in, first-out method. For both the Company’s immune globulin products and plasma intended for resale and internal use, net realizable value is generally determined based upon the consideration the Company expects to receive when the inventory is sold, less costs to deliver the inventory to the recipient. The estimates for net realizable value of inventory are based on contractual terms or upon historical experience and certain other assumptions, and the Company believes that such assumptions are reasonable. Inventory is periodically reviewed to ensure that its carrying value does not exceed its net realizable value, and adjustments are recorded to write down such inventory, with a corresponding charge to cost of product revenue, when the carrying value or historical cost exceeds its estimated net realizable value. In addition, costs associated with the production of engineering lots that would not qualify as immediately available for commercial sale are charged to cost of product revenue and not capitalized into inventory. Property and equipment Assets comprising property and equipment (see Note 4) are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. Land is not depreciated. The buildings have been assigned a useful life of 30 years . Property and equipment other than land and buildings have useful lives ranging from 3 to 15 years . Leasehold improvements are amortized over the lesser of the lease term or their estimated useful lives. Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired by the Company. Goodwill at December 31, 2023 and 2022 was $ 3.5 million, all of which is attributable to the Company’s ADMA BioManufacturing business segment. There were no changes to the carrying amount of goodwill during the years ended December 31, 2023, 2022 and 2021. Goodwill is not amortized but is assessed for impairment on an annual basis or more frequently if impairment indicators exist. The Company has the option to perform a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill and other intangible assets. If the Company concludes that this is the case, then it must perform a goodwill impairment test by comparing the fair value of the reporting unit to its carrying value. An impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The Company performs its annual goodwill impairment test as of October 1 of each year. The Company’s annual goodwill impairment tests as of October 1, 2023, 2022 and 2021 did not result in any impairment charges related to goodwill for the years ended December 31, 2023, 2022 and 2021. Impairment of long-lived assets The Company assesses the recoverability of its long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate impairment may have occurred. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s carrying value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the years ended December 31, 2023, 2022 and 2021, the Company determined that there was no impairment of its long-lived assets. Revenue recognition Revenues for the years ended December 31, 2023, 2022 and 2021 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, ASCENIV, BIVIGAM and Nabi-HB, (ii) product revenues from the sale of human plasma collected by the Company’s Plasma Collection Centers business segment, (iii) contract manufacturing and laboratory services revenue, (iv) revenues from the sale of intermediate by-products and (v) license and other revenues primarily attributable to the out-licensing of ASCENIV to Biotest, AG (“Biotest”) in 2012 to market and sell this product in Europe and selected countries in North Africa and the Middle East. Biotest has provided the Company with certain services and financial payments in accordance with the related Biotest license agreement and is obligated to pay the Company certain amounts in the future if certain milestones are achieved. Deferred revenue is amortized into income over the term of the Biotest license, representing a period of approximately 22 years . F-10 Table of Contents Product revenue is recognized when the customer is deemed to have control over the product. Control is determined based on when the product is shipped or delivered and title passes to the customer. Revenue is recorded in an amount that reflects the consideration the Company expects to receive in exchange. 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, wholesaler distribution and related fees, customer incentives, including prompt pay discounts, wholesaler chargebacks, group purchasing organization fees and reimbursements for patient assistance. These estimates are based on contractual arrangements, historical experience and certain other assumptions, and while the Company believes that such estimates are reasonable, they are subject to change based on future developments 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 the time control of the product has been transferred to the customer, which generally occurs at the time of shipment. Product revenues are recognized at the time of delivery if the Company retains control of the product during shipment. Cost of product revenue Cost of product revenue includes costs associated with the manufacture of the Company’s FDA approved products and intermediates and for the collection 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. When the activities of these operations are attributable to new products in development, the expenses are classified as research and development expenses. Research and development expenses Research and development expenses consist of clinical research organization costs, costs related to clinical trials, post-marketing commitment studies for BIVIGAM and ASCENIV and salaries, benefits and stock-based compensation for employees directly related to research and development activities. All research and development costs are expensed as incurred. Plasma center operating expenses Plasma center operating expenses consist of certain general and administrative plasma center costs, initial opening, marketing and start-up costs, rent expense, maintenance, utilities and compensation and benefits for administrative staff. Advertising and marketing expenses Advertising and marketing expense includes cost for promotional materials and trade show expenses for the marketing of the Company’s products and expenses incurred for attracting donors to the Company’s plasma collection centers. All advertising and marketing expenses are expensed as incurred. Advertising and marketing expenses were $ 3.3 million, $ 2.2 million and $ 1.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. Stock-based compensation The Company follows recognized accounting guidance which requires all equity-based payments, including grants of stock options and restricted stock unit awards (“RSUs”), to be recognized in the statement of operations as compensation expense based on their fair values at the date of grant. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis over the associated vesting period of the award based on the grant date fair value of the award. Stock options granted to employees under the Company’s equity incentive plans generally have a four-year vesting period and a term of 10 years . RSUs granted to employees also have a four-year vesting period. For milestone-based equity awards (see Note 8) the Company periodically assesses the probability of vesting for each milestone-based award and adjusts compensation expense based on its probability assessment. Pursuant to ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) , the Company has elected not to establish a forfeiture rate, as stock-based compensation expense related to forfeitures of unvested equity awards is fully reversed at the time of forfeiture. F-11 Table of Contents Income taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or its tax returns. Under this method, deferred tax assets and liabilities are recognized for the temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company records a valuation allowance on its deferred tax assets if it is more likely than not that the Company will not generate sufficient taxable income to utilize its deferred tax assets (see Note 11). The Company is subject to income tax examinations by major taxing authorities for all tax years since 2019 and for previous periods as it relates to the Company’s net operating loss carryforwards. Loss Per Share Basic loss per 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 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). Potentially dilutive common stock in the diluted net loss per share computation is excluded to the extent that it would be anti-dilutive. No potentially dilutive securities are included in the computation of any diluted per share amounts as the Company reported a net loss for all periods presented. For the years ended December 31, 2023, 2022 and 2021, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects: For the Years Ended December 31, 2023 2022 2021 Stock Options 5,906,184 8,256,211 7,862,722 Restricted Stock Units 4,657,297 2,866,987 4,485,133 Warrants 12,502,906 13,525,148 4,528,160 23,066,387 24,648,346 16,876,015 Fair value of financial instruments The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. The debt outstanding under the Company’s senior notes payable (see Note 7) approximates fair value due to the variable interest rate on this debt. Recent Accounting Pronouncements In November of 2023 the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this Update are intended to provide financial statement users with more disaggregated expense information about a public entity’s reportable segments, however the Update does not change the definition of a business segment or the method for determining reportable segments. This update becomes effective for fiscal years beginning after December 15, 2023. The Company does not expect this update to have a material impact on its consolidated financial statements. In December of 2023 the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This Update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid and becomes effective for public business entities for fiscal years beginning after December 15, 2024. The Company has yet to determine the impact this Update may have on the Company’s consolidated financial statements. There were no new accounting pronouncements adopted during the years ended December 31, 2023, 2022 and 2021 that had a significant impact on the Company’s consolidated financial statements. F-12 Table of Contents 3. INVENTORIES The following table provides the components of inventories: December 31, 2023 December 31, 2022 (In thousands) Raw materials $ 52,999 $ 48,644 Work-in-process 49,621 56,171 Finished goods 70,286 58,465 Total inventories $ 172,906 $ 163,280 Raw materials includes plasma and other materials expected to be used in the production of ASCENIV, BIVIGAM and Nabi-HB. These materials will be consumed in the production of products expected to be available for sale or otherwise have alternative uses that provide a probable future benefit. All other activities and materials associated with the production of inventories used in research and development activities are expensed as incurred. Work-in-process inventory primarily consists of the Company’s IVIG products that are manufactured to the bulk drug substance and unlabeled filled vials stage of production . Finished goods inventory is comprised of the Company’s immunoglobulin products that have reached the filled, labeled and serialized vial stage of production and related intermediates that are available for commercial sale, as well as plasma collected at the Company’s plasma collection centers which is expected to be sold to third-party customers . 4. PROPERTY AND EQUIPMENT Property and equipment at December 31, 2023 and 2022 is summarized as follows: December 31, 2023 December 31, 2022 (In thousands) Manufacturing and laboratory equipment $ 21,093 $ 18,768 Office equipment and computer software 6,062 5,319 Furniture and fixtures 5,776 5,110 Construction in process 2,273 6,727 Leasehold improvements 20,811 17,931 Land 4,339 4,339 Buildings and building improvements 20,218 19,544 80,572 77,738 Less: Accumulated depreciation ( 26,737 ) ( 19,477 ) Total property, plant and equipment, net $ 53,835 $ 58,261 The Company recorded depreciation expense on property and equipment of $ 7.6 million, $ 6.4 million and $ 4.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. 5. INTANGIBLE ASSETS Intangible assets at December 31, 2023 and 2022 consist of the following: December 31, 2023 December 31, 2022 (In thousands) Cost Accumulated Amortization Net Cost Accumulated Amortization Net Trademark and other intangible rights related to Nabi-HB $ 4,100 $ 3,856 $ 244 $ 4,100 $ 3,270 $ 830 Internally developed software 210 9 201 - - - Rights to intermediates 907 853 54 907 724 183 $ 5,217 $ 4,718 $ 499 $ 5,007 $ 3,994 $ 1,013 F-13 Table of Contents Under the previous contract manufacturing agreement between ADMA and Biotest, intermediate by-products derived from the manufacture of ASCENIV were property of Biotest. As a result of the acquisition of certain assets from Biotest on June 6, 2017, ADMA obtained the right to these intermediate products, which are being amortized over a period of seven years . The intangible rights to Nabi-HB are also being amortized over a period of seven years . During the year ended December 31, 2023, the Company implemented an internally developed data intelligence and analytics program at a cost of approximately $ 0.2 million which is being amortized over a period of four years . Amortization expense related to the Company’s intangible assets for the years ended December 31, 2023, 2022 and 2021 was $ 0.7 million. Estimated aggregate future aggregate amortization expense is expected to be as follows (in thousands): 2024 $ 351 2025 52 2026 52 2027 44 6. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other current liabilities at December 31, 2023 and 2022 are as follows: December 31, 2023 December 31, 2022 (In thousands) Accrued rebates $ 16,608 $ 11,437 Accrued distribution fees 5,954 3,167 Accrued incentives 4,961 4,194 Accrued testing 282 310 Accrued payroll and other compensation 2,203 4,086 Other 2,911 1,796 Total accrued expenses and other current liabilities $ 32,919 $ 24,990 7. NOTES PAYABLE Senior Notes Payable A summary of outstanding senior notes payable is as follows: December 31, 2023 December 31, 2022 (In thousands) Term loan $ 62,500 $ 154,748 Revolving credit facility 72,500 - Less: Debt discount ( 4,406 ) ( 11,915 ) Senior notes payable $ 130,594 $ 142,833 On December 18, 2023 (the “Ares Closing Date”), the Company and all of its subsidiaries entered into a new senior secured credit facility (the “Ares Credit Agreement”) with Ares Capital Corporation and certain credit funds affiliated with Ares Capital Corporation (collectively, “Ares”). The Ares Credit Agreement provides for a total of $ 135.0 million in senior secured credit facilities (the “Ares Credit Facility”) consisting of (i) a term loan in the aggregate principal amount of $ 62.5 million and (ii) a revolving credit facility in the aggregate principal amount of $ 72.5 million (collectively, the “Ares Loans”), both of which were fully drawn on the Ares Closing Date. The Ares Credit Facility has a maturity date of December 20, 2027 (the “Ares Maturity Date”). On the Ares Closing Date, the Company used the proceeds from the Ares Loans, along with a portion of its existing cash on hand, to terminate and pay in full all of the outstanding obligations under the Company’s previous senior credit facility (the “Hayfin Credit Facility”) with Hayfin Services LLP (“Hayfin”) including the outstanding principal in the amount of $ 158.6 million, a prepayment penalty in the amount $ 11.1 million, an exit fee of $ 1.6 million, all accrued and unpaid interest outstanding on the Hayfin Credit Facility as of the Ares Closing date, as well as certain fees and expenses related thereto. In connection with the payoff and termination of the Hayfin Credit Facility, the Company also wrote off $ 15.0 million of unamortized debt discount related to the Hayfin Credit Facility. As a result of this transaction, the Company recorded a loss on the extinguishment of the Hayfin Credit Facility in the amount of $ 26.2 million, which is mainly comprised of the write-off of unamortized debt discount and the prepayment penalty. Borrowings under the term loan initially bear interest at the adjusted Term SOFR for a three-month tenor in effect on the day that is two business days prior to the first day of the applicable calendar quarter plus 6.50 % (the “Initial SOFR Term Loan Applicable Margin”). Borrowings under the revolving facility initially bear interest at the adjusted Term SOFR for a three-month tenor in effect on the day that is two business days prior to the first day of the applicable calendar quarter plus 3.75 % (the “SOFR Revolving Facility Applicable Margin”). On the Ares Closing Date, the interest rate on the term loan was 11.87774 % and the interest rate on the revolving facility was 9.12774 %. On the Ares Maturity Date, the Company is required to pay Ares the entire outstanding principal amount underlying the Ares Loans and any accrued and unpaid interest thereon. Prior to the Ares Maturity Date, there are no scheduled principal payments on the Ares Credit Facilities, and the Company is required to make quarterly interest payments to Ares of approximately $ 3.7 million. The Company may prepay the outstanding principal under the revolving facility, together with any accrued but unpaid interest on the prepaid principal amount, at any time and from time to time upon three business days’ prior written notice with no prepayment premium. However, in the event the Company prepays an amount under the Revolving Facility that is greater than 50 % of the current $ 72.5 million outstanding balance, the Company will still be required to pay interest on 50 % of this balance, or $ 36.3 million, through the term of Ares Credit Facility. The Company may prepay the outstanding principal on the term loan, together with any accrued but unpaid interest on the prepaid principal amount, at any time and from time to time upon three business days’ prior written notice, subject to the payment to Ares of a prepayment premium equal to (i) the present value as of such date of all remaining required interest payments on the principal amount being repaid plus 1.5 % of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Ares Closing Date, (ii) 1.5 % of the prepaid principal amount, if prepaid after the first anniversary of the Ares Closing Date and on or prior to the second anniversary of the Ares Closing Date, or (iii) 1.0 % of the prepaid principal amount, if prepaid on or prior to the third anniversary of the Ares Closing Date. In connection with the closing of the Ares Credit Facility, the Company incurred fees and expenses related to the transaction of $ 2.8 million, including a $ 1.7 million original discount payable to Ares, all of which was deducted from the Ares loan proceeds. In addition, the Company is also required to pay Ares an exit fee of $ 1.7 million upon the earlier of any prepayment date or the Ares Maturity Date, and this amount has been accrued as a separate liability in the Company’s consolidated balance sheet as of December 31, 2023. As a result, the Company recognized an aggregate debt discount of $ 4.4 million as of the Ares Closing Date, and the weighted-average effective interest rate on the Ares Loans as of December 31, 2023 was 11.39 %. This debt discount was recorded as a reduction to the face amount of the debt and is being amortized as interest expense over the term of the debt using the interest method. All of the Company’s obligations under the Ares Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible and intangible assets, including intellectual property and all of the equity interests in the Company’s subsidiaries. The Ares Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar debt financings. The negative covenants include certain financial covenants, including maximum total leverage ratios and a $ 15,000,000 minimum liquidity covenant, and also restrict or limit the Company’s ability and the ability of the Company’s subsidiaries to, among other things and subject to certain exceptions contained in the Ares Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s or the Company’s subsidiaries’ business activities; make certain Investments or Restricted Payments (each as defined in the Ares Credit Agreement); engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Ares Credit Agreement. As of December 31, 2023 the Company was in compliance with all of the covenants contained in the Ares Credit Agreement. Events of Default on the Ares Loans include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments, cross-defaults to material contracts and events constituting a change of control. If there is an event of default, the Company will incur an increase in the rate of interest on the Ares Loans of 2 % per annum. On March 23, 2022 (the “Hayfin Closing Date”), the Company and all of its subsidiaries entered into the Hayfin Credit Agreement with Hayfin. The Hayfin Credit Agreement provided for a senior secured term loan facility in a principal amount of up to $ 175.0 million (the “ Hayfin Credit Facility ”), composed of (i) a term loan made on the Hayfin Closing Date in the principal amount of $ 150.0 million ( the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount of $ 25.0 million (the “ Hayfin Delayed Draw Loan ” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans ”). The Hayfin Delayed Draw Loan was not drawn prior to the Ares Closing Date. The Hayfin Credit Facility had 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). F-14 Table of Contents On the Hayfin Closing Date, the Company used $ 100.0 million of the Hayfin Closing Date Loan to terminate and pay in full all of the outstanding obligations under the Company’s previously existing credit facility (the “Perceptive Credit Facility”) with Perceptive Credit Holdings II, LP (“Perceptive”). The Company also used $ 2.0 million of the Hayfin Closing Date Loan proceeds to pay a redemption premium to Perceptive and used approximately $ 1.0 million of the Hayfin Closing Date Loan proceeds to pay certain fees and expenses incurred in connection with this transaction. In addition, a $ 1.8 million upfront fee payable to Hayfin was paid “in kind” and was added to the outstanding principal balance in accordance with the terms of the Hayfin Credit Agreement. In connection with the retirement of the Perceptive Credit Facility and all of the obligations thereunder, the Company recorded a loss on extinguishment of debt in the amount of $ 6.7 million, consisting of the write-off of unamortized discount related to the Perceptive indebtedness and the redemption premium paid to Perceptive. Borrowings under the Hayfin Credit Agreement bore interest, at the Company’s election, at the adjusted Term SOFR for a one-month tenor, 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 would increase by an additional 3 % per annum. On May 1, 2023 the Hayfin Credit Agreement was amended to reduce the Applicable Margin from 9.5 % to 8.5 %. On the last day of each calendar month prior to the Ares Closing Date, the Company paid accrued interest to Hayfin. The rate of interest in effect as of the Hayfin Closing Date, December 31, 2022 and the Ares Closing Date was 10.75 %, approximately 13.7 % and approximately 13.9 %, respectively. The Company was also permitted to pay “in kind” a portion of the interest on the Hayfin Loans for each monthly interest period in an amount equal to 2.5 % per annum, which was added to the principal amount of the outstanding debt under the Hayfin Credit Facility. From the Hayfin Closing Date through December 31, 2022, $ 3.0 million of interest was paid in kind and added to the balance of the outstanding Hayfin Loans. For the year ended December 31, 2023, $ 3.8 million of interest was paid in kind and added to the balance of the outstanding Hayfin Loans. On the Ares Closing Date, the Company paid Hayfin the entire outstanding principal amount underlying the Hayfin Loans and all accrued and unpaid interest thereon, as well as the exit fee of 1.0 % of the outstanding principal amount paid. This exit fee had been recorded separately as a non-current liability on the accompanying consolidated balance sheet as of December 31, 2022. In accordance with the terms of the Hayfin Credit Agreement, the Company also paid Hayfin the early prepayment fee in the amount equal 7.0 % of the prepaid principal amount of $ 158.6 million, or $ 11.1 million. All of the Company’s obligations under the Hayfin Credit Agreement were secured by a first-priority lien and security interest in substantially all of the Company’s tangible and intangible assets, including intellectual property, and all of the equity interests in the Company’s subsidiaries. The Hayfin Credit Agreement contained certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar debt financings. The negative covenants restricted or limited the ability of the Company and its subsidiaries to, among other things and subject to certain exceptions contained in the Hayfin Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s or its subsidiaries’ business activities; make certain Investments or Restricted Payments (each as defined in the Hayfin Credit Agreement); change its fiscal year; pay dividends; repay certain other indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Hayfin Credit Agreement. In addition, the Company was required (i) at all times prior to the Hayfin Maturity Date to maintain a minimum cash balance of $ 6.0 million; and (ii) as of the last day of each fiscal quarter, report IVIG product and related revenues for the trailing 12-month period that exceed the amounts set forth in the Hayfin Credit Agreement, which ranged from $ 75.0 million for the fiscal quarter ended June 30, 2022 to $ 110.0 million for the fiscal quarter ended September 30, 2023. As of the Ares Closing Date and December 31, 2022, the Company was in compliance with all of the covenants contained in the Hayfin Credit Agreement. As consideration for the Hayfin Credit Agreement, on the Hayfin Closing Date the Company issued to various entities affiliated with Hayfin warrants to purchase an aggregate of 9,103,047 shares of the Company’s common stock (the “Hayfin Warrants”). The Hayfin Warrants have an exercise price equal to $ 1.6478 per share, which is equal to the trailing 30 -day Volume Weighted-average Price of the Company’s common stock on the business day immediately prior to the Hayfin Closing Date. The Hayfin Warrants were valued by the Company at approximately $ 9.6 million as of the Hayfin Closing Date and have an expiration date of March 23, 2029 (see Note 8). As consideration for the foregoing amendment to the Hayfin Credit Agreement on May 1, 2023, the Company issued additional warrants to the lenders to purchase 2,391,244 shares of the Company’s common stock at an exercise price of $ 3.2619 per share (the “Hayfin Second Amendment Warrants”). The Hayfin Second Amendment Warrants were valued at approximately $ 5.6 million and have an expiration date of May 1, 2030 . F-15 Table of Contents As a result of the upfront fee and exit fee paid or payable to Hayfin, the expenses incurred by the Company in connection with this transaction and the value of the Hayfin Warrants and Hayfin Second Amendment Warrants, the Company recognized a discount on the Hayfin Loans in the amount of $ 13.9 million for the year ended December 31, 2022 and an additional debt discount in the year ended December 31, 2023 in the amount of $ 5.7 million. The Company records debt discount as a reduction to the face amount of the debt, and the debt discount is amortized as interest expense over the life of the debt using the interest method. As of the Ares Closing Date, $ 15.0 million of the aggregate debt discount associated with the Hayfin Credit Facility was unamortized, and this amount is reflected in the loss on extinguishment of debt for the year ended December 31, 2023. Based on the fair value of the Hayfin Warrants and the aggregate amount of fees and expenses associated with obtaining the Hayfin Credit Facility, the effective interest rate on the Hayfin Loans as of the Hayfin Closing Date and as of December 31, 2022 was approximately 13.0 % and 16.1 %, respectively . 8. STOCKHOLDERS ’ EQUITY Preferred Stock The Company is currently authorized to issue up to 10 million shares of preferred stock, $ 0.0001 par value per share. There were no shares of preferred stock outstanding at December 31, 2023 and 2022. Common Stock As of December 31, 2023 and 2022, the Company was authorized to issue 300,000,000 shares of its common stock, $ 0.0001 par value per share, and 226,063,032 and 221,816,930 shares of common stock were outstanding as of December 31, 2023 and 2022, respectively. On May 27, 2021, the Company amended its Second Amended and Restated Certificate of Incorporation to increase the number of shares of common stock that the Company is authorized to issue from 150,000,000 to 300,000,000 . After giving effect to shares reserved for the issuance of warrants and for awards issued under the Company’s equity incentive plans, 31,033,333 shares of common stock were available for issuance as of December 31, 2023. On December 9, 2022, the Company completed an underwritten public offering whereby the Company issued 24,125,873 shares of its common stock. Net proceeds after underwriting discounts and expenses associated with the offering were approximately $ 64.6 million and were used to accelerate commercialization and production activities, complete plasma center buildouts and obtain FDA approvals, to conclude post‑FDA marketing approval research and development projects, and for working capital, capital expenditures and general corporate purposes. During the year ended December 31, 2022, outstanding stock options aggregating to 68,679 shares of common stock were exercised, and the Company received net proceeds from the exercises of approximately $ 0.2 million. On October 25, 2021, the Company completed an underwritten public offering whereby the Company issued 57.5 million shares of common stock and received gross proceeds of $ 57.5 million. Net proceeds after underwriting discounts and expenses associated with the offering were approximately $ 53.8 million, and were used to advance the commercial sales of the Company’s FDA approved products through the procurement of raw materials for the manufacturing of BIVIGAM and ASCENIV, to expand the Company’s plasma collection facility network, to scale up the manufacturing capacity of the Boca Facility and make continuous improvements in order to adhere to cGMP compliance, to explore business development opportunities and for general corporate purposes and other capital expenditures. F-16 Table of Contents On September 3, 2021, the Company entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which the Company may offer and sell, from time to time, at its option, through or to the Agent, up to an aggregate of $ 50 million of shares of the Company’s common stock (the “Distribution Agreement”). The Company currently intends to use any net proceeds from the sale of its 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, working capital, capital expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities. T he Company currently has approximately $ 42.8 million of shares available to sell under the Distribution Agreement. There were no sales under the Distribution Agreement during the year ended December 31, 2022 . During the year ended December 31, 2021, the Company issued 5,540,831 shares of its common stock under the Distribution Agreement and received net proceeds of $ 6.9 million. On August 5, 2020, the Company entered into an open market sale agreement (as amended from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which the Company could offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $ 50 million of shares of the Company’s common stock. On November 5, 2020 and February 3, 2021, the Company and Jefferies amended the Sale Agreement to provide for increases in the aggregate offering amount under the Sale Agreement such that the Company could sell shares having an aggregate offering price of up to $ 105.4 million under the Sale Agreement, as amended. The Sale Agreement was terminated on August 31, 2021. For the year ended December 31, 2021, the Company issued and sold 27,805,198 shares of common stock under the 2020 Sale Agreement and received net proceeds of $ 60.4 million. Warrants 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. On May 1, 2023 the Company issued the Hayfin Second Amendment Warrants (see Note 7), which were valued at $ 5.6 million using the Black-Scholes option-pricing model assuming an expected term of seven years , a volatility of 67.8 %, a dividend yield of 0 % and a risk-free rate of interest of 3.62 %. On March 23, 2022, the Company issued the Hayfin Warrants, whereby affiliates of Hayfin may purchase an aggregate of 9,103,047 shares of common stock at an exercise price of $ 1.6478 per share (see Note 7). The Hayfin Warrants were valued at $ 9.6 million, using the Black-Scholes option pricing model assuming an expected term of 7 years, a volatility of 68.1 %, a dividend yield of 0 % and a risk-free interest rate of 2.36 %. During the year ended December 31, 2022, warrants to purchase 106,059 shares of common stock that had been issued to former noteholders of the Company expired. At December 31, 2023 and 2022, the Company had outstanding warrants to purchase an aggregate of 12,502,906 and 13,525,148 shares, respectively, of common stock, with a weighted average exercise price of $ 2.32 and $ 1.99 per share, respectively, and expiration dates ranging between May 2023 and December 2030. The following table summarizes information about warrants outstanding as of December 31, 2023, 2022 and 2021: Shares Weighted Average Exercise Price Warrants outstanding at December 31, 2020 4,528,160 $ 2.82 Expired - $ - Granted - $ - Exercised - $ - Warrants outstanding at December 31, 2021 4,528,160 $ 2.82 Expired ( 106,059 ) $ 8.23 Granted 9,103,047 $ 1.65 Exercised - $ - Warrants outstanding at December 31, 2022 13,525,148 $ 1.99 Expired ( 24,800 ) $ 6.37 Granted 2,391,244 $ 3.26 Exercised ( 3,388,686 ) $ 1.65 Warrants outstanding at December 31, 2023 12,502,906 $ 2.32 Equity Incentive Plans From time to time the Company granted stock options or other equity-based awards under the Company’s Amended and Restated 2014 Omnibus Incentive Compensation Plan (the “2014 Plan”). The 2014 Plan, as amended, was approved by the Company’s Board of Directors (the “Board”) on March 15, 2017 and by the Company’s stockholders on May 25, 2017. The maximum number of shares that were reserved for grant under the 2014 Plan was: (a) 2,334,940 shares; plus (b) an annual increase as of the first day of the Company’s fiscal year, beginning in 2018 and occurring each year thereafter through 2022, equal to 4 % of the outstanding shares of common stock as of the end of the Company’s immediately preceding fiscal year, or any lesser number of shares determined by the Board; provided, however, that no more than an aggregate of 10 million shares of common stock may be issued pursuant to incentive stock options intended to qualify under Section 422 of the Internal Revenue Code. As of December 31, 2021, an aggregate of 69,090 shares were available for issuance under the 2014 Plan. In accordance with the foregoing, on January 1, 2022 the aggregate number of shares available for issuance increased to 7,901,643 . F-17 Table of Contents During the years ended December 31, 2022 and 2021, the Company granted options to purchase an aggregate of 1,194,032 and 1,895,550 shares of common stock, respectively, to its directors and employees under the 2014 Plan. On June 21, 2022, the Company’s stockholders approved the ADMA Biologics, Inc. 2022 Compensation Plan (the “2022 Equity Plan”). Approval of the 2022 Equity Plan resulted in approximately 18 million additional shares of the Company’s common stock being reserved for future awards. The 2022 Equity Plan provides for the Board or a Committee of the Board (the “Committee”) to grant awards to optionees and to determine the exercise price, vesting term, expiration date and all other terms and conditions of the awards, including acceleration of the vesting of an award at any time. Any options granted under the 2022 Equity Plan are intended to be Incentive Stock Options (“ISOs”), unless specified by the Committee to be Non-Qualified Options (“NQOs”) as defined by the Internal Revenue Code. ISOs and NQOs may be granted to employees, consultants or Board members at an option price not less than the fair market value of the common stock subject to the stock option agreement. For the year ended December 31, 2023, the Company granted options to purchase an aggregate of 1,826,380 shares of common stock to employees and directors under the 2022 Equity Plan. Also during the year ended December 31, 2023, options to purchase 3,814,122 shares of common stock were exercised, for which 2,109,722 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. The fair value of stock options granted was determined on the date of grant using the Black-Scholes model. The Black-Scholes option pricing model was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the underlying Black-Scholes assumptions can materially affect the fair value estimate. To determine the risk-free interest rate, the Company utilized the U.S. Treasury yield curve in effect at the time of the grant with a term consistent with the term of the awards granted by the Company. The expected term of the options granted is in accordance with Staff Accounting Bulletins 107 and 110, which is based on the average between vesting terms and contractual terms. The expected dividend yield reflects the Company’s current and expected future policy for dividends on the Company’s common stock. For the years ended December 31, 2023, 2022 and 2021, the expected stock price volatility for the Company’s stock options was calculated by examining the historical volatility of the Company’s common stock since the stock became publicly traded in the fourth quarter of 2013. The grant date fair values of stock options awarded during the years ended December 31, 2023, 2022 and 2021 were determined using the Black-Scholes option pricing model with the following assumptions: Years Ended December 31, 2023 December 31, 2022 December 31, 2021 Expected term 5.5 - 6.3 years 5.5 - 6.3 years 5.5 - 6.3 years Volatility 68 % 68 % 68 - 70 % Dividend yield 0.0 0.0 0.0 Risk-free interest rate 4.20 - 4.62 % 1.72 - 1.73 % 0.80 - 1.27 % The following table summarizes information about stock options outstanding as of December 31, 2023, 2022 and 2021: Shares Weighted Average Exercise Price Options outstanding, vested and expected to vest at December 31, 2020 6,922,931 $ 4.40 Forfeited ( 529,202 ) $ 2.89 Expired ( 426,557 ) $ 4.91 Granted 1,895,550 $ 2.14 Exercised - $ - Options outstanding, vested and expected to vest at December 31, 2021 7,862,722 $ 3.93 Forfeited ( 31,540 ) $ 2.37 Expired ( 700,324 ) $ 6.86 Granted 1,194,032 $ 1.67 Exercised ( 68,679 ) $ 2.55 Options outstanding, vested and expected to vest at December 31, 2022 8,256,211 $ 3.37 Forfeited ( 99,345 ) $ 2.73 Expired ( 262,940 ) $ 6.42 Granted 1,826,380 $ 3.36 Exercised ( 3,814,122 ) $ 3.15 Options outstanding, vested and expected to vest at December 31, 2023 5,906,184 $ 3.38 Options exercisable 3,410,131 $ 3.79 F-18 Table of Contents As of December 31, 2023, the Company had $ 3.8 million of unrecognized compensation expense related to stock options granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 2.6 years. The weighted average remaining contractual term of stock options outstanding and expected to vest at December 31, 2023 is 6.6 years. The weighted average remaining contractual term of stock options exercisable at December 31, 2023 is 5.2 years. The following table summarizes additional information regarding outstanding and exercisable options under the stock option plans at December 31, 2023: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Options Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value ($000’s) Options Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value ($000’s) $ 1.10 - $ 1.67 1,175,410 7.7 $ 1.60 $ 3,428 590,275 7.3 $ 1.56 $ 1,748 $ 1.73 - $ 2.60 1,028,392 6.6 $ 2.33 2,253 712,704 6.4 $ 2.34 1,551 $ 2.67 - $ 4.01 2,905,506 7.4 $ 3.41 3,211 1,310,276 5.3 $ 3.49 1,343 $ 4.01 - $ 6.02 383,535 3.5 $ 5.09 22 383,535 3.5 $ 5.09 22 $ 6.26 - $ 9.39 279,841 1.1 $ 8.48 - 279,841 1.1 $ 8.48 - $ 10.80 - $ 16.20 133,500 1.1 $ 10.80 - 133,500 1.1 $ 10.80 - 5,906,184 6.6 $ 3.38 $ 8,914 3,410,131 5.2 $ 3.79 $ 4,664 During the years ended December 31, 2023, 2022 and 2021, the Company granted RSUs representing an aggregate of 3,389,760 , 1,174,266 and 4,384,744 shares, respectively, to certain employees of the Company and to members of the Board. Except for the RSUs granted under the Company’s retention incentive program discussed below, the RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors. The RSUs granted during the year ended December 31, 2021 include 3,832,500 shares granted under a retention incentive program implemented by the Company for its executive management and certain employees (see Note 10), whereby the Company issued an aggregate of 2,685,000 time-based RSUs and 1,147,500 milestone-based RSUs. Fifty percent of the time-based RSUs granted under the retention incentive program vested on December 31, 2022, with the remainder vesting in quarterly installments through December 31, 2024. The milestone-based RSUs vested upon achievement of the applicable milestone, and all of the milestone-based RSUs vested during the year ended December 31, 2022. The milestones required to be achieved in order for the milestone-based RSUs to vest were determined by the Board and were consistent with the 2022 operating plan approved by the Board . During the years ended December 31, 2023, 2022 and 2021, 1,199,445 , 2,727,412 and 92,750 shares, respectively, vested in connection with grants of RSUs. With respect to RSUs vested during the year ended December 31, 2023, 365,722 shares valued at approximately $ 1.3 million were withheld by the Company to cover employees’ tax liabilities. With respect to the RSUs vested during the year ended December 31, 2022, 918,851 shares valued at approximately $ 2.9 million were withheld by the Company to cover employees’ tax liabilities . For the RSUs vested during the year ended December 31, 2021 , 27,850 shares valued at approximately $ 62,000 were withheld by the Company to cover employees’ tax liabilities. All of these shares have been retired by the Company or were otherwise no longer outstanding as of December 31, 2023 . A summary of the Company’s unvested RSU activity and related information is as follows: Shares Weighted Average Grant Date Fair Value Balance at December 31, 2020 326,000 $ 2.81 Granted 4,384,744 $ 1.30 Vested ( 92,750 ) $ 2.82 Forfeited ( 132,861 ) $ 2.51 Balance at December 31, 2021 4,485,133 $ 1.34 Granted 1,174,266 $ 1.74 Vested ( 2,727,412 ) $ 1.25 Forfeited ( 65,000 ) $ 1.40 Balance at December 31, 2022 2,866,987 $ 1.59 Granted 3,389,760 $ 3.42 Vested ( 1,199,445 ) $ 1.63 Forfeited ( 400,005 ) $ 2.71 Balance at December 31, 2023 4,657,297 $ 2.81 F-19 Table of Contents As of December 31, 2023, the Company had $ 10.4 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 2.9 years. Total stock-based compensation expense for all awards granted under the Company’s equity incentive plans for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): 2023 2022 2021 Research and development $ 40 $ 19 $ 154 Plasma center operating expenses 146 82 60 Selling, general and administrative 5,331 4,717 2,958 Cost of product revenue 670 397 316 Total stock-based compensation expense $ 6,187 $ 5,215 $ 3,488 9. RELATED PARTY TRANSACTIONS The Company leases an office building and equipment from Areth, LLC (“Areth”) pursuant to an agreement for services effective as of January 1, 2016, as amended from time to time , and pays monthly rent on this facility in the amount of $ 10,000 . On October 18, 2022 , the Company amended the agreement to extend its term to December 31, 2026 , with automatic successive one-year renewals thereafter. Either party may terminate the agreement by providing the other party with one year ’s prior written notice . Rent expense for the years ended December 31, 2023, 2022 and 2021 amounted to $ 0.1 million. Areth is a company controlled by Dr. Jerrold B. Grossman, the Vice Chairman of the Board, and Adam S. Grossman, the Company’s President and Chief Executive Officer. The Company also reimburses Areth for office, warehousing and building related (common area) expenses, equipment and certain other operational expenses, which were not material to the consolidated financial statements for the years ended December 31, 2023, 2022 and 2021. During the years ended December 31, 2023, 2022 and 2021, the Company purchased certain specialized medical equipment and services related to the Company’s plasma collection centers, as well as personal protective equipment, from GenesisBPS and its affiliates (“Genesis”) in the amount of $ 0.4 million, $ 0.2 million and $ 0.2 million, respectively. Genesis is owned by Dr. Grossman 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 prior credit facility and related transactions with Perceptive, a holder of more than 5 % of the Company’s common stock during the year ended December 31, 2022.In connection with the 2022 public offering of the Company’s common stock (see Note 8) on December 9, 2022: (i) Mr. Grossman purchased 14,983 shares of common stock directly and 14,982 shares of common stock indirectly through an entity he controls, and (ii) Brian Lenz, the Company’s Executive Vice President and Chief Financial Officer, purchased 6,993 shares of common stock, all at the public offering price of $ 2.86 per share. During the year ended December 31, 2021, in connection with the resignation of Dr. James Mond, the Company’s former Chief Scientific and Medical Officer, the Company recognized an expense and corresponding liability in the amount of $ 0.8 million for payments to be made under a separation and transition agreement with Dr. Mond. These payments were made in scheduled installments over a period of 10 months. In connection with the 2021 public offering of the Company’s common stock (see Note 8) on October 25, 2021: (i) Mr. Grossman purchased 100,000 shares of common stock directly and 250,000 shares of common stock indirectly through an entity he controls, (ii) Dr. Grossman purchased 100,000 shares of common stock, (iii) Dr. Young Kwon, a member of the Board, purchased 100,000 shares of common stock, and (iv) Brian Lenz, the Company’s Executive Vice President and Chief Financial Officer, purchased 30,000 shares of common stock, all at the public offering price of $ 1.00 per share. F-20 Table of Contents 10. COMMITMENTS AND CONTINGENCIES General Legal Matters From time to time the Company is or may become subject to certain legal proceedings and claims arising in connection with the normal course of its business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s liquidity, results of operations or financial condition. IT Systems Disruption On June 19, 2023, the Company experienced an IT systems disruption, which rendered certain of the Company’s IT technology systems inaccessible for less than one week. The Company’s investigation of the disruption has essentially been completed with the assistance of third-party consultants, and no definitive root cause was identified. 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 year ending December 31, 2023. In addition, 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 ADMA will be reimbursed for the insurance claims made pertaining to these charges, the Company is actively working with its insurance broker and carriers. F-21 Table of Contents Vendor Commitments Pursuant to the terms of a plasma purchase agreement dated as of November 17, 2011 (the “2011 Plasma Purchase Agreement”), the Company agreed to purchase from its former contract manufacturer an annual minimum volume of source plasma containing antibodies to RSV to be used in the manufacture of ASCENIV. The Company must purchase a to-be-determined and agreed upon annual minimum volume from the counterparty, 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 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) 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 the Company’s former contract manufacturer were met, thus allowing the Company to expand its reach for raw material supply as it executes its commercialization plans for ASCENIV. 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, the Company’s former contract manufacturer assigned its rights and obligations under the 2011 Plasma Purchase Agreement to Grifols Worldwide Operations Limited (“Grifols”) as its successor-in-interest, effective January 1, 2019. On June 6, 2017, the Company entered into a Plasma Supply Agreement with its former contract manufacturer, pursuant to which the counterparty supplies, on an exclusive basis subject to certain exceptions, to ADMA BioManufacturing an annual minimum volume of hyperimmune plasma that contain antibodies to the Hepatitis B virus for the manufacture of Nabi-HB. The Plasma Supply Agreement has a 10-year term. On July 19, 2018, the Plasma Supply Agreement was amended to provide, among other things, that in the event the counterparty elects not to supply in excess of ADMA BioManufacturing’s specified amount of Hepatitis B plasma and ADMA BioManufacturing is unable to secure Hepatitis B plasma from a third party at a price that is within a low double- digit percentage of the price that ADMA BioManufacturing pays to the counterparty, then the counterparty shall reimburse ADMA BioManufacturing for the difference in price ADMA BioManufacturing incurs. On December 10, 2018, the Company’s former contract manufacturer assigned its rights and obligations under the Plasma Supply Agreement to Grifols, effective January 1, 201 9. F-22 Table of Contents Post-Marketing Commitments In connection with the FDA approval of the BLA for BIVIGAM on December 19, 2012, Biotest committed to perform two additional post-marketing studies, a pediatric study to evaluate the efficacy and safety of BIVIGAM in children and adolescents, and a post-authorization safety study to further assess the potential risk of hypotension and hepatic and renal impairment in BIVIGAM-treated patients with primary humoral immunodeficiency. These studies were required to be completed by June 30, 2023. Both studies have been completed and the study reports have been submitted to the FDA. ADMA had assumed the remaining obligations, and the costs of the studies were expensed as incurred as research and development expenses. For the years ended December 31, 2023, 2022 and 2021, the Company incurred expenses related to these studies of $ 1.7 million, $ 2.2 million and $ 1.7 million, respectively. In connection with the FDA 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 years ended December 31, 2023, 2022 and 2021, the Company incurred expenses related to this study in the amount of $ 1.0 million, $ 0.5 million and $ 0.6 million, respectively. The Company expects to incur expenses of approximately $ 1.5 million to complete this study, which is required to be completed by June of 2026. Employment Contracts The Company has entered into employment agreements with Mr. Grossman and Mr. Lenz. Other Commitments On September 28, 2021, following the approval of the Board upon recommendation of the Compensation Committee of the Board, and in consultation with an independent compensation consultant, the Company implemented a retention incentive program, consisting of cash payments and awards of RSUs (see Note 8), to the Company’s management, including Mr. Grossman and Mr. Lenz, and to certain other employees. The purpose of the retention program was to promote and ensure business continuity and provide an incentive to the Company’s executive management and certain other employees, considering the operational challenges presented by the COVID -19 pandemic and the competitive work environment in which the Company operates as an FDA regulated manufacturer of specialized biologic therapies. The retention awards were granted considering the nationwide labor shortages and the increased employee turnover rates that the Company, its pharmaceutical peers and other companies outside of the Company’s industry have reported experiencing. The cash portion of the retention program consisted of two tranches. The first tranche was paid to employees on September 30, 2021 in the amount of $ 1.3 million, and the second tranche aggregating to approximately $ 1.3 million was paid on June 15, 2022. Based on the terms of the retention agreements the Company entered into with each applicable executive and employee, approximately $ 0.8 million of each tranche was recognized over the retention service period, which began on October 1, 2021 and ended on December 31, 2022, with the remainder having been recognized as expense when paid. In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of December 31, 2023. The Company does not anticipate recognizing any significant losses relating to these arrangements. F-23 Table of Contents 11. INCOME TAXES A reconciliation of income taxes at the U.S. federal statutory rate to the benefit for income taxes is as follows: Years Ended December 31, (In thousands) 2023 2022 2021 Benefit at U.S. federal statutory rate $ ( 5,930 ) $ ( 13,840 ) $ ( 15,046 ) State taxes - deferred ( 763 ) ( 1,773 ) ( 252 ) Increase in valuation allowance 4,696 15,117 14,619 Research and development credits - ( 211 ) ( 240 ) Decrease in federal net operating loss - - 624 162(m) disallowance 1,183 862 64 Other 814 ( 155 ) 231 Benefit for income taxes $ - $ - $ - A summary of the Company’s deferred tax assets is as follows: Year Ended December 31, 2023 2022 Federal and state net operating loss carryforwards $ 77,757 $ 81,526 Federal and state research credits 140 407 Interest expense limitation carryforwards 21,165 12,194 Transaction costs 778 882 Deferred revenue 434 480 Accrued expenses and other 1,148 1,236 Total gross deferred tax assets 101,422 96,725 Less: valuation allowance for deferred tax assets ( 101,422 ) ( 96,725 ) Net deferred tax assets $ - $ - As of December 31, 2023, the Company had federal and state (post-apportioned basis) net operating losses (“NOLs”) of $ 315.6 million and $ 216.4 million, respectively, as well as federal research and development tax credit carryforwards of approximately $ 0.1 million. Approximately $ 35.6 million and $ 95.1 million of the foregoing Federal and state NOLs, respectively, will expire at various dates from 2028 through 2043 , if not limited by triggering events prior to such time. Under the provisions of the Internal Revenue Code, changes in ownership of the Company, in certain circumstances, would limit the amount of federal NOLs that can be utilized annually in the future to offset taxable income. In particular, Section 382 of the Internal Revenue Code (“Section 382”) imposes limitations on an entity’s ability to use NOLs upon certain changes in ownership. If the Company is limited in its ability to use its NOLs in future years in which it has taxable income, then the Company will pay more taxes than if it were otherwise able to fully utilize its NOLs. The Company may experience ownership changes in the future as a result of subsequent shifts in ownership of the Company’s capital stock that the Company cannot predict or control that could result in further limitations being placed on the Company’s ability to utilize its Federal NOLs. As of December 31, 2023, the Company performed a substantive analysis of limitations imposed by Section 382 on historical information and concluded that no ownership changes occurred as of December 31, 2023 and 2022. As part of the substantive analysis, the Company did determine that an additional $ 14.2 million of state NOLs were not subject to limitation of prior ownership changes and are therefore available to offset future taxable income. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. When determining the amount of net deferred tax assets that are more likely than not to be realized, the Company assesses all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income, exclusive of reversing taxable temporary differences, to outweigh objective negative evidence of recent financial reporting losses. Based on these criteria and the relative weighting of both the positive and negative evidence available, management continues to maintain a full valuation allowance against its net deferred tax assets. F-24 Table of Contents In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. The amount of the liability for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. Components of the liability are classified as either a current or a long-term liability in the accompanying consolidated balance sheets based on when the Company expects each of the items to be settled. The Company does no t have any unrecognized tax benefits as of December 31, 2023 and 2022 and does not anticipate a significant change in unrecognized tax benefits during the next 12 months. 12. LEASE OBLIGATIONS The Company leases certain properties and equipment for its ADMA BioCenters and ADMA BioManufacturing subsidiaries, which leases provide the right to use the underlying assets and require lease payments through the respective lease terms which expire at various dates through 2033. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for such leases are recognized on a straight-line basis over the lease term. All other leases are recorded on the balance sheet with assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. Right-to-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of the lease payments is determined using the Company’s incremental borrowing rate as of the lease commencement date. For the lease liabilities recognized during the years ended December 31, 2023 and 2022, the Company used discount rates of 13 % to 16 % to determine the present value of its lease obligations. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is reflected in Plasma center operating expenses and Selling, general and administrative expenses in the accompanying consolidated statements of operations. Aggregate lease expense for the Company’s operating leases for the years ended December 31, 2023, 2022 and 2021 was $ 2.4 million, $ 2.1 million and $ 1.4 million , respectively. Aggregate cash paid on these leases for the years ended December 31, 2023, 2022 and 2021 was $ 2.4 million, $ 1.8 million and $ 1.4 million, respectively. F-25 Table of Contents During the year ended December 31, 2023, the Company recognized one additional right-to-use asset and corresponding lease liability in the amount of $ 0.1 million for office equipment leased for the Boca Facility. During the year ended December 31, 2022, the Company recognized additional right-to-use assets and corresponding lease liabilities aggregating to approximately $ 4.0 million in connection with two new property leases where the Company has opened additional plasma collection facilities, a property lease for the storage of raw materials inventory and a property lease for the building that the Company utilizes as its corporate headquarters (see Note 9). Including a finance lease the Company entered into in June 2018, the Company has aggregate lease liabilities of $ 10.8 million and $ 11.6 million as of December 31, 2023 and 2022, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers. The Company’s operating leases have a weighted average remaining term of 7.6 years. Scheduled payments under the Company’s lease obligations are as follows (in thousands) : Year ended December 31, 2024 $ 2,397 2025 2,420 2026 2,157 2027 2,041 2028 2,088 Thereafter 6,151 Total payments 17,254 Less: imputed interest ( 6,430 ) Current portion ( 1,045 ) Balance at December 31, 2023 $ 9,779 13. SEGMENTS The Company is dedicated to manufacturing, marketing and developing specialty plasma-derived biologics. The Company’s ADMA BioManufacturing segment reflects the Company’s immune globulin manufacturing and development operations in Florida, acquired on June 6, 2017. The Plasma Collection Centers segment consists of ten plasma collection facilities as of December 31, 2023, all of which were operational,collecting plasma, and hold an approved license with the FDA (and of which three facilities have received approvals from the Korean Ministry of Food and Drug Safety as well as FDA approval to implement a Hepatitis B immunization program). The Corporate segment includes general and administrative overhead expenses. The Company defines its segments as those business units whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to analyze performance and allocate resources. The Company’s CODM is its President and Chief Executive Officer. Summarized financial information concerning reportable segments is shown in the following tables: F-26 Table of Contents Year Ended December 31, 2023 (in thousands) ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 249,738 $ 8,334 $ 143 $ 258,215 Cost of product revenue 161,157 8,116 - 169,273 Income (loss) from operations 47,525 ( 4,048 ) ( 21,845 ) 21,632 Interest and other expense, net ( 258 ) ( 1 ) ( 23,438 ) ( 23,697 ) Loss on extinguishment of debt - - ( 26,174 ) ( 26,174 ) Net income (loss) 47,267 ( 4,049 ) ( 71,457 ) ( 28,239 ) Capital expenditures 2,952 1,819 - 4,771 Depreciation and amortization expense 5,156 3,176 - 8,332 Total assets 246,719 34,733 47,730 329,182 Year Ended December 31, 2022 (in thousands) ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 144,070 $ 9,867 $ 143 $ 154,080 Cost of product revenue 108,882 9,933 - 118,815 Income (loss) from operations 879 ( 17,908 ) ( 22,336 ) ( 39,365 ) Interest and other expense, net ( 505 ) ( 3 ) ( 19,361 ) ( 19,869 ) Loss on extinguishment of debt - - ( 6,670 ) ( 6,670 ) Net income (loss) 374 ( 17,911 ) ( 48,367 ) ( 65,904 ) Capital expenditures 5,247 8,664 - 13,911 Depreciation and amortization expense 4,709 2,404 - 7,113 Total assets 238,159 37,071 73,231 348,461 Year Ended December 31, 2021 (in thousands) ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 74,936 $ 5,864 $ 143 $ 80,943 Cost of product revenue 74,126 5,644 - 79,770 Loss from operations ( 29,294 ) ( 12,056 ) ( 17,024 ) ( 58,374 ) Interest and other expense, net ( 218 ) ( 6 ) ( 13,050 ) ( 13,274 ) Net loss ( 29,512 ) ( 12,062 ) ( 30,074 ) ( 71,648 ) Capital expenditures 4,877 8,634 - 13,511 Depreciation and amortization expense 4,218 1,273 5 5,496 Total assets 208,391 24,682 43,180 276,253 14. OTHER EMPLOYEE BENEFITS The Company sponsors a 401(k) savings plan. Under the plan, employees may make contributions which are eligible for a Company discretionary percentage contribution as defined in the plan and determined by the Board. The Company recognized $ 1.3 million, $ 1.3 million and $ 1.1 million of related compensation expense for the years ended December 31, 2023, 2022 and 2021, respectively. F-27 Table of Contents 15. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Supplemental cash flow information for the years ended December 31, 2023, 2022 and 2021 is as follows: 2023 2022 2021 (In thousands) SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 18,051 $ 13,880 $ 11,159 Noncash Financing and Investing Activities: Equipment acquired reflected in accounts payable and accrued liabilities $ 86 $ 1,495 $ 1,353 Right-to-use assets in exchange for lease obligations $ 130 $ 4,048 $ 3,554 Warrants issued in connection with notes payable $ 5,595 $ 9,570 $ - 16. CONCENTRATIONS Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. At December 31, 2023, five customers accounted for approximately 98 % of the Company’s consolidated accounts receivable. At December 31, 2022, two customers accounted for approximately 92 % of the Company’s consolidated accounts receivable. For the year ended December 31, 2023, two customers accounted for approximately 72 % of the Company’s consolidated revenues. For the year ended December 31, 2022, two customers accounted for approximately 74 % of the Company’s consolidated revenues. For the year ended December 31, 2021, four customers accounted for approximately 81 % of the Company’s consolidated revenues. During the years ended December 31, 2023 and 2022, plasma purchases from Grifols totaled approximately $ 9.5 million and $ 47.7 million, respectively, or approximately 21 % and 65 %, respectively, of the Company’s total inventory purchases. Net revenues according to geographic area, based on the location of where the product is shipped, is as follows: Years Ended December 31, (in thousands) 2023 2022 2021 United States $ 244,881 $ 146,427 $ 70,626 International 13,334 7,653 10,317 Total revenues $ 258,215 $ 154,080 $ 80,943 Schedule II – Valuation and Qualifying Accounts Years ended December 31, 2023, 2022 and 2021 Additions (in thousands) Balance at beginning of year Charged to costs and expenses Other Deductions Balance at end of year Year ended December 31, 2023 Accrued rebates $ 11,437 $ 8,448 $ - $ 3,277 $ 16,608 Inventory valuation allowance $ 5,400 $ 6,963 $ 6 $ 9,377 $ 2,992 Deferred tax asset valuation allowance $ 96,725 $ 4,696 $ - $ - $ 101,421 Year ended December 31, 2022 Accrued rebates $ 5,040 $ 8,227 $ 1,830 $ 11,437 Inventory valuation allowance $ 8,577 $ 2,744 $ - $ 5,921 $ 5,400 Deferred tax asset valuation allowance $ 81,608 $ 15,117 $ - $ - $ 96,725 Year ended December 31, 2021 Accrued rebates $ 2,604 $ 2,815 $ - $ 379 $ 5,040 Inventory valuation allowance $ 13,108 $ 4,722 $ 2 $ 9,255 $ 8,577 Deferred tax asset valuation allowance $ 66,990 $ 14,618 $ - $ - $ 81,608 F-28