What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-08 · 384 added, 524 removed, 345 unchanged (72% of the section changed)

4 unchanged sentences

BALANCE SHEETS

September 30,

(In thousands, except share data)

Current assets:

25 unchanged sentences

Common Stock - voting, $ 0.0001 par value, 300,000,000 shares authorized, 231,769,765

and 221,816,930 shares issued and outstanding

and 226,063,032 shares issued and outstanding at March 31, 2024 and December 31, 2023

Additional paid-in capital

Accumulated deficit

( 488,611,138

( 478,016,671

TOTAL STOCKHOLDERS’ EQUITY

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CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

STATEMENTS OF

Three Months ended March 31,

(In thousands, except share and per share data)

Cost of product revenue

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Interest expense

Loss on extinguishment of debt

Other expense

Other expense, net

INCOME (LOSS) BEFORE INCOME TAXES

Provision for income taxes

NET INCOME (LOSS)

BASIC INCOME (LOSS) PER COMMON SHARE

DILUTED INCOME (LOSS) PER COMMON SHARE

BASIC EARNINGS (LOSS) PER COMMON SHARE

DILUTED EARNINGS (LOSS) PER COMMON SHARE

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY (Unaudited)

For the Three and Nine Months Ended September 30, 2023

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’

EQUITY (Unaudited)

(In thousands, except share data)

For the Three Months Ended March 31, 2024

Stockholders’

Balance at December 31, 2023

( 478,016,671

Stock-based compensation

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

Exercise of stock options

Balance at March 31, 2023

( 484,805,486

Stock-based compensation

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

Warrants issued in connection with note payable

Cashless exercise of warrants

Exercise of stock options

Balance at June 30, 2023

( 491,176,193

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

Exercise of stock options

Stock-based compensation

Balance at September 30, 2023

( 488,611,138

For the Three and Nine Months Ended September 30, 2022

Balance at March 31, 2024

For the Three Months Ended March 31, 2023

Stockholders’

Balance at December 31, 2022

( 412,112,721

Warrants issued in connection with notes payable

Stock-based compensation

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

Exercise of stock options

Balance at March 31, 2023

( 437,120,578

Stock-based compensation

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

Balance at June 30, 2022

( 450,885,484

Stock-based compensation

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

Balance at September 30, 2022

( 465,784,988

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

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CONDENSED CONSOLIDATED STATEMENTS OF

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash used in operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

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Amortization of debt discount

Loss on extinguishment of debt

Amortization of license revenue

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Purchase of property and equipment

Acquisition of intangible assets

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on notes payable

( 100,000,000

Payment of debt refinancing fees

Proceeds from issuance of note payable

Taxes paid on vested Restricted Stock Units

1 unchanged sentence

Net proceeds from the exercise of stock options

Payment of deferred financing fees

Net cash provided by financing activities

Net cash used in financing activities

Net decrease in cash and cash equivalents

4 unchanged sentences

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 plasma-derived 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

(“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 the Biotest Therapy Business Unit (“BTBU”) from BPC Plasma, Inc.

(formerly Biotest Pharmaceuticals Corporation) (“BPC” and,

together with Biotest AG, “Biotest”) on June 6, 2017.

The acquisition included certain assets of BTBU, including 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”) (the “Biotest Transaction”).

BTBU had previously been the Company’s third-party contract manufacturer.

ADMA BioCenters is the Company’s source plasma

collection business with ten plasma collection facilities

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

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

(i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”)

product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of Immunity, and for which the Company received FDA approval on May 9, 2019 and commenced

commercial sales in August 2019;

(ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which the Company received FDA approval on April 1, 2019 and commenced first

commercial sales in October 2019;

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

In addition to its commercially available immunoglobulin products, the Company provides contract manufacturing and laboratory services for certain clients and generates revenues from the sale of intermediate by-products that result from

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

The Company seeks to develop a pipeline of plasma-derived therapeutics, and its products and product candidates are intended to be used by

physician specialists focused on caring for immune-compromised patients with or at risk for certain infectious diseases.

As of September 30, 2023, the Company had working capital of $ 231.9 million, including $ 74.2 million of cash

and cash equivalents.

Based upon the Company’s current projected revenue and expenditures, including capital expenditures and continued implementation of the Company’s commercialization and expansion activities, the Company’s management

currently believes that its cash, cash equivalents, projected revenue and accounts receivable will be sufficient to fund ADMA’s operations, as currently conducted, through the end of fiscal 2024.

The Company estimates that it will continue to

generate positive cash flow from operations, however these estimates may change based upon several factors, including the success of the Company’s commercial efforts with respect to the sale of its products, whether or not the assumptions

underlying the Company’s projected revenues and expenses are correct and the continued acceptability of ADMA’s immune globulin products by physicians, patients or payers.

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

continue to be commercially viable, or that plant capacity expansion or other capital improvements will be successfully completed or that any product developed in the future will be approved.

The Company is subject to risks common to

companies in the biologics, biotechnology and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations,

dependence on key personnel, inflationary pressures, supply chain constraints, protection of proprietary technology and compliance with FDA and other governmental regulations and approval requirements.

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

corporate priority.

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 United States, 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;

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.

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 March 31, 2024, the Company had working capital of $ 223.3 million, including $ 45.3 million of cash and cash

equivalents, $ 49.6 million of accounts receivable and $ 177.7 million of inventories, partially offset by $ 53.1 million of current liabilities.

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 second quarter of 2025 and beyond.

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 and 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.

ADMA continues to evaluate a variety of

strategic alternatives , and the exploration of value-creating opportunities remains a top corporate priority.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the U.S.

Securities and Exchange Commission (the “SEC”) on March 23, 2023.

Securities and Exchange Commission (the “SEC”) on February 28, 2024.

The accompanying consolidated balance sheet as of December 31,

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In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and

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

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

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

amounts presented for the respective periods in the accompanying condensed consolidated statements of operations.

Operating results for interim periods are not necessarily indicative of the results that may be expected for the full fiscal

assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of March 31, 2024 and its results of operations, changes in stockholders’ equity and cash flows for the three months

ended March 31, 2024 and 2023.

During the three months ended March 31, 2024 and 2023, comprehensive income/loss was equal to the net

income/loss amounts presented for the respective periods in the accompanying condensed consolidated statements of operations.

Operating results for interim periods are not necessarily indicative of the results that may be expected for the

full fiscal year.

Use of Estimates

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Significant estimates include

rebates and chargebacks deducted from gross revenues, the realizable value of accounts receivable, 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.

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 estimates related to the valuation allowance for the Company’s deferred tax assets and its effective tax rate.

Fair Value of Financial Instruments

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cost which approximates fair value due to the short-term nature of these instruments.

The debt outstanding under the Company’s senior secured term loan (see Note 7) approximates fair value due to the variable interest rate on this debt.

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 September 30 , 2023 and December 31, 2022, respectively, which are recognized in the period the related revenue is recorded.

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

Evaluations of the financial condition, payment history and associated credit risk of customers are performed on an

ongoing basis.

Based on these evaluations, the Company has concluded that its credit risk is minimal.

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

95 % of the Company’s total accounts receivable, and at December 31, 2022, two customers accounted for approximately 92 % of the Company’s total

The debt outstanding under the Company’s senior credit facility (see Note 7) approximates fair value due to the variable interest rate on this debt.

Accounts Receivable

Accounts receivable is reported at realizable value, net of allowances for contractual credits and credit losses in the

amount of $ 0.2 million and $ 0.1

million at March 31, 2024 and December 31, 2023, respectively, which are recognized in the period the related revenue is recorded.

The Company extends credit to its customers based upon an evaluation of

each customer’s financial condition and credit history.

Evaluations of the financial condition, payment history and associated credit risk of customers are performed on an ongoing basis.

Based on these evaluations, the Company has

concluded that its credit risk is minimal.

At March 31, 2024 , three customers accounted for an aggregate of approximately 87 % of the Company’s total accounts receivable, and at December 31, 2023, five customers accounted

for approximately 98 % of the Company’s total accounts receivable.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Raw materials inventory consists of various materials purchased from suppliers, including

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

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

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

March 31, 2024 and December 31, 2023 was $ 3.5 million.

All of the Company’s goodwill is attributable to its ADMA BioManufacturing business segment.

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

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The Company performs its annual goodwill impairment test as of October 1 of each year.

The Company’s annual

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

nine months ended September 30 , 2023 and 2022.

The Company did no t record any impairment charges related to goodwill for the three months ended March 31, 2024 and 2023.

Impairment of Long-Lived Assets

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

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

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

three months ended March 31, 2024 and 2023, the Company did not

identify any impairment indicators for its long-lived assets, and as a result no impairment charges were recorded.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revenue Recognition

Revenues for the three and nine months ended September 30 , 2023

and 2022 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, BIVIGAM, ASCENIV and Nabi-HB, (ii) product revenues from the sale of human plasma collected through the

Company’s Plasma Collection Centers business segment, (iii) contract manufacturing and laboratory services revenue, (iv) revenues from the sale of intermediate by-products;

and (v) license and other revenues primarily attributable to the

out-licensing of ASCENIV to Biotest in 2012 to market and sell this product in Europe and selected countries in North Africa and the Middle East.

Biotest has provided the Company with certain services and financial payments in accordance

with the related Biotest license agreement and is obligated to pay the Company certain amounts in the future if certain milestones are achieved.

Deferred revenue is amortized into income over the term of the Biotest license, representing a

period of approximately 22 years.

Revenues for the three months ended March 31, 2024

and 2023 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 through the Company’s Plasma Collection Centers business

segment, (iii) contract manufacturing and laboratory services revenue, (iv) revenues from the sale of intermediate by-products;

and (v) license and other revenues primarily attributable to the out-licensing of ASCENIV to Biotest in 2012 to

market and sell this product in Europe and selected countries in North Africa and the Middle East.

Biotest has provided the Company with certain services and financial payments in accordance with the related Biotest license agreement and is

obligated to pay the Company certain amounts in the future if certain milestones are achieved.

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

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

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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, customer incentives, including prompt pay discounts, wholesaler chargebacks and other wholesaler fees.

These estimates are

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

For revenues associated with contract

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

utilized by the Company.

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 historical experience and certain other assumptions, and while the Company believes that such estimates are reasonable, they are subject to

change based on future experience and other factors.

For revenues associated with contract manufacturing and the sale of intermediates, control transfers to the customer and the performance obligation is satisfied when the customer takes

possession of the product from the Boca Facility or from a third-party warehouse that is utilized by the Company.

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

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Product revenues are recognized at the time of delivery if the Company retains control of the product during shipment.

For the nine months ended September 30 , 2023 , two customers represented an aggregate of approximately 71 % of the Company’s consolidated revenues.

For the nine months ended September 30 , 2022, two customers represented an

For the three months ended March 31, 2024 , two customers represented an aggregate of approximately 70 % of the Company’s consolidated revenues.

For the three months ended March 31, 2023 , three customers represented an

aggregate of 76 % of the Company’s consolidated revenues.

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

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

Net income available to common stockholders (numerator)

For the three months ended March 31, 2024, basic and diluted earnings per share is calculated as follows:

Net income available to common stockholders ($000’s) (numerator)

Weighted-average number of common shares (denominator)

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Diluted earnings per common share

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

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

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

For the nine months ended September 30 ,

2023 and 2022, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects:

For the Nine Months Ended September 30,

For the three months ended March 31, 2024, there were no shares with an anti-dilutive effect that needed to be excluded from the earnings per share computation.

For the three months ended March 31, 2023 no potentially dilutive securities are included in the computation of diluted loss per share in the accompanying condensed consolidated

financial statements as the Company reported a net loss for this period.

For the three months ended March 31, 2023 ,

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

Stock Options

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AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Stock-Based Compensation

The Company follows recognized accounting guidance which requires all equity-based payments, including grants of stock

options, 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

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

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

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

RSUs granted to employees generally have a four-year vesting period.

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 stock options is fully reversed at the time of forfeiture.

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.

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.

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Based on its analysis, the Company

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

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

has determined that it has no t incurred any liability for unrecognized tax benefits as of March 31, 2024 and December 31,

2023, and during the three months ended March 31, 2024 and 2023 the Company recognized no

adjustments for uncertain tax positions.

Recent Accounting Pronouncements

In November of 2023 the FASB issued ASU No.

2023-07, Segment Reporting (Topic

Improvements to Reportable Segment Disclosures.

The amendments in this ASU 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 an operating segment or the method for determining reportable segments.

This update becomes effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after

December 15, 2024.

The Company does not expect this ASU to have a material impact on the Company’s consolidated financial statements.

The following table provides the components of inventories:

September 30,

(In thousands)

Raw materials

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Total inventories

Raw materials includes plasma and other materials expected to be used in the production of BIVIGAM, ASCENIV and Nabi-HB.

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 goods expected to be available for sale or otherwise have alternative uses that provide a probable future benefit.

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AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

INTANGIBLE ASSETS

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

September 30, 2023

Intangible assets at March 31, 2024 and December 31, 2023 consist of the following:

March 31, 2024

December 31, 2023

(In thousands)

Trademark and other intangible rights related to Nabi-HB

Internally developed software

Rights to intermediates

All of the Company’s intangible assets were acquired in the

Biotest Transaction.

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

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

Estimated future aggregate amortization

expense is expected to be as follows:

Remainder of 2023

Amortization expense related to the

Company’s intangible assets was $ 0.2 million for the three months ended March 31, 2024 and 2023.

Estimated future aggregate

amortization expense is expected to be as follows (in thousands):

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

PROPERTY AND EQUIPMENT

Property and equipment and related accumulated depreciation are summarized as

September 30, 2023

March 31, 2024

December 31, 2023

(In thousands)

Manufacturing and laboratory equipment

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

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

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

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

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company recorded depreciation expense on property and equipment for the three months ended March 31, 2024 and 2023 of $ 1.9

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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

September 30, 2023

Accrued expenses and other current liabilities at March 31, 2024 and December 31, 2023 are as follows:

March 31, 2024

December 31, 2023

(In thousands)

Accrued rebates

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Accrued incentives

Accrued interest

Accrued testing

2 unchanged sentences

A summary of outstanding senior notes payable is as follows:

September 30, 2023

March 31, 2024

December 31, 2023

Notes payable

(In thousands)

Revolving credit facility

Debt discount

Senior notes payable

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

Services LLP (“Hayfin”).

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

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

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

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

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

Hayfin Credit Agreement.

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

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

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

Delayed Draw Loan was extended to June 30, 2023.

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

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

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

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

this transaction.

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

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

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

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

redemption premium paid to Perceptive.

From the time of the Hayfin Closing Date through May 1, 2023, borrowings under the Hayfin Credit Agreement bore interest, at the Company’s election, at either (a) a base rate

(equal to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate in effect on such day plus 0.50 % and (iii) adjusted Term Secured Overnight Financing Rate (“SOFR”) for a one-month tenor in effect on such day plus 1.00 %), plus an applicable

margin of 8.5 %, or (b) adjusted Term SOFR for either a one-month or three-month tenor, as elected by the Company, and subject

to a floor of 1.25 %, plus an applicable margin of 9.5 % (the “Applicable Margin”);

provided, however, that upon, and during the continuance of, an Event of Default, the Applicable Margin increases by an additional 3 % per annum.

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

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

The Company is

also permitted to pay “in kind” a portion of the interest on the Hayfin Loans for each monthly or quarterly interest period in an amount equal to 2.5 %

per annum, which is added to the principal amount of the outstanding debt under the Hayfin Credit Facility.

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

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

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On the Hayfin Maturity Date, the Company is required to pay Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any accrued and unpaid interest

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

This exit fee is recorded separately as

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

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

All of the Company’s obligations under the Hayfin Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible

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

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

conditions that are customarily required for similar financings.

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

Credit Agreement, incur new indebtedness;

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On December 18, 2023 (the “Ares Closing Date”), the Company

and all of its subsidiaries entered into a credit agreement (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.

Borrowings under the term loan 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 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

As of March 31, 2024 and December 31, 2023, the interest rate on the term loan was approximately 11.83 % and 11.88 %, respectively, and the interest rate on the revolving facility was approximately 9.08 % and 9.13 %, respectively.

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 $ 3.6 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 sheets as of March 31, 2024 and 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 March 31, 2024 and December 31, 2023 was 11.36 % and 11.39 %,

respectively.

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 $ 15.0 million 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 its subsidiaries’ business activities;

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

change its fiscal year;

pay dividends;

repay certain other indebtedness;

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

engage in certain affiliate transactions;

or enter into, amend or terminate any other agreements that

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

In addition, the Company is required (i) at all times prior to the Maturity Date to maintain a minimum cash balance of $ 6.0 million;

and (ii) as of the last day of each fiscal quarter, report IVIG product and related revenues for the trailing 12-month period that

exceed the amounts set forth in the Hayfin Credit Agreement, which range from $ 75.0 million for the fiscal quarter ended June

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

As of September 30, 2023, the Company was in

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

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

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

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

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

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

1, 2023, the Company entered into a second amendment to the Hayfin Credit Agreement (the “Hayfin Second Amendment”) whereby the Applicable Margin for adjusted Term SOFR Loans was reduced from 9.5 % to 8.5 %.

The Hayfin Second Amendment also

extended the obligation of the lenders to make the Hayfin Delayed Draw Loan from June 30, 2023 to December 31, 2023.

the terms of the Hayfin Second Amendment, in the event the Company elects to prepay all or any portion of the outstanding principal on the Hayfin Loans, the Company will be subject to an early prepayment fee in the amount equal to (i) 7.0 % of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Hayfin Second Amendment, (ii) 3.0 % of the prepaid principal amount, if prepaid after the first anniversary of the Hayfin Second Amendment and on or prior to the second

anniversary of the Hayfin Second Amendment, or (iii) 1.0 % of the prepaid principal amount, if prepaid after the second

anniversary of the Hayfin Second Amendment and on or prior to the third anniversary of the Hayfin Second Amendment.

For any prepayments of principal or payment of principal on the Hayfin Maturity Date, the Company is also required to

pay the exit fee.

In addition, the Hayfin Second Amendment provides for a 50 % reduction to the foregoing early prepayment

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

In connection with the Hayfin Second Amendment, the Company issued additional warrants to the lenders to purchase 2,391,244

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

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

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 an aggregate discount on the Hayfin Loans in the amount of $ 19.5

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

Based on the fair value of the Hayfin

Warrants and the aggregate amount of fees and expenses associated with obtaining the Hayfin Credit Facility, the effective interest rate on the Hayfin Loans as of September 30,2023 and December 31, 2022 was approximately 17.6 % and 16.1 %, respectively.

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

31, 2024 the Company was in compliance with all of the covenants contained in the Ares Credit Agreement.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

If there is an event of default, the Company will incur an increase in the rate of interest on the Ares Loans of 2 %

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 September 30, 2023 and December 31, 2022.

As of September 30, 2023 and December 31, 2022, the Company was authorized to issue 300,000,000 shares of its common stock, $ 0.0001

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

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

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

value per share.

There were no shares of preferred stock outstanding at March 31, 2024 and December 31, 2023.

As of March 31, 2024 and December 31, 2023, the Company was authorized to issue 300,000,000 shares of its common stock, $ 0.0001

par value per share, and 231,769,765 and 226,063,032 shares of common stock were outstanding as of March 31, 2024 and December 31, 2023, respectively.

After giving effect to the 33,596,877 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of March 31, 2024

there were 34,633,358 shares of common stock available for issuance.

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

issued the Hayfin Warrants to purchase 9,103,047 shares of the Company’s common stock.

The Hayfin Warrants were valued at $ 9.6 million using the Black-Scholes option-pricing model assuming an expected term of seven years , a volatility of 68.1 %, a dividend yield of 0 % and a risk-free rate of interest of 2.36 %.

On May 1, 2023 the Company issued the Hayfin Second Amendment Warrants, 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 May 13, 2023, warrants to purchase 24,800 shares of

the Company’s common stock held by a former noteholder of the Company expired in accordance with their terms.

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

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

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

On January 10, 2024, a former noteholder of the Company exercised a warrant to purchase 4 million

shares of the Company’s common stock on a cashless basis and the Company issued 1,977,514 shares of common stock to this

On March 8, 2024 Hayfin and its affiliates exercised warrants to purchase an aggregate of 3,388,681 shares of the

Company’s common stock on a cashless basis and the Company issued 2,482,205 shares of common stock to Hayfin and its affiliates.

On March 14, 2024 an entity associated with another former noteholder of the Company exercised a warrant to purchase 169,651

shares of the Company’s common stock on a cashless basis and the Company issued 85,784 shares of common stock to this entity.

On February 24, 2024, a warrant to purchase 34,800 shares of the Company’s common stock held by a

former noteholder of the Company expired in accordance with its terms.

At March 31, 2024 and December 31, 2023, the Company had outstanding warrants to purchase an aggregate of 4,909,774 and 12,502,906 shares, respectively, of common stock, with

weighted-average exercise prices of $ 2.51 and $ 2.32 per share, respectively, with expiration dates ranging between October 2024 and May 2030.

The following table summarizes information about warrants outstanding for the three months ended March

Weighted Average Exercise Price

Warrants outstanding at December 31 , 2023

Warrants outstanding at March 31 , 2024

Equity Incentive Plans

The fair value of stock options granted under t he Company’s equity incentive plans w as determined on the date of grant using the Black-Scholes option valuation model.

The Black-Scholes model was

developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable.

In addition, option valuation models require the input of certain subjective assumptions including the

expected stock price volatility.

The stock options granted to employees and directors have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair

value estimate.

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

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30,

The fair value of stock options granted under the Company’s equity incentive plans was determined on the

date of grant using the Black-Scholes option valuation model.

The Black-Scholes model was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable.

option valuation models require the input of certain subjective assumptions including the expected stock price volatility.

The stock options granted to employees and directors have characteristics significantly different from those of

traded options, and changes in the subjective input assumptions can materially affect the fair value estimate.

The following assumptions were used to determine the fair value of options granted during the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

Expected term

3 unchanged sentences

Risk-free interest rate

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

2022 Compensation Plan (the “2022 Equity

Plan”), which replaced the ADMA Biologics, Inc.

2014 Omnibus Incentive Compensation Plan.

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

During the nine months ended September 30, 2023 and

2022, the Company granted options to purchase an aggregate of 1,727,510 and 1,194,032 shares of common stock, respectively, to its directors and employees.

The weighted average remaining contractual life of stock options outstanding and expected to vest at

September 30, 2023 is 6.8 years.

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

2023 is 5.2 years.

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

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

4.20 - 4.24 %

During the three months ended March 31,

2024 and 2023, the Company granted options to purchase an aggregate of 1,096,196 and 1,727,510 shares of common stock, respectively, to its directors and employees.

The weighted average remaining contractual life of stock options outstanding and

expected to vest at March 31, 2024 is 7.4 years.

The weighted average remaining contractual life of stock options exercisable at

March 31, 2024 is 6.0 years.

During the three months ended March 31, 2024, options to purchase an aggregate of 393,993 shares of common stock were exercised, which included one exercise transaction for which 7,652 shares were withheld to cover the exercise price, and the Company received aggregate net exercise proceeds of $ 1.0 million.

A summary of the Company’s option activity under the Company’s equity incentive plans and related information is as

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Exercise Price

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

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

Options outstanding, vested and expected to vest at March 31, 2024

Options exercisable

As of September 30, 2023, the Company had $ 4.3 million of unrecognized compensation expense related to options granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period

of 2.7 years.

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

3,345,760 and 1,119,266

As of March 31, 2024, the Company had $ 6.9 million of unrecognized compensation expense related to options granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 2.9 years.

During the three months ended March 31, 2024 and 2023, the Company granted RSUs representing an aggregate

of 2,484,968 and 2,666,260

shares, respectively, to certain employees of the Company and to members of its Board of Directors .

These RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for

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

with grants of RSUs.

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

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

A summary of the

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

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

These RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors .

During the three months ended March 31, 2024 , an aggregate of 1,145,292

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

With respect to these vested RSUs, 370,403 shares valued at

approximately $ 2.5 million were withheld by the Company to cover employees’ tax liabilities.

These shares were no longer

outstanding as of March

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

Average Grant

1 unchanged sentence

Balance at December 31, 2023

Balance at September 30, 2023

As of September 30, 2023, the Company had $ 11.6 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average

period of 3.1 years.

Balance at March 31, 2024

As of March 31, 2024 , the Company had $ 22.1 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 3.3 years.

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

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

Three Months Ended September 30,

Nine Months Ended September 30,

months ended March 31, 2024 and 2023 is as follows:

Three Months Ended March 31,

Research and development

4 unchanged sentences

RELATED PARTY TRANSACTIONS

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

pursuan t to an agreement for services

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

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

company controlled by Dr.

The Company leases office space 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 through December 31, 2026.

Rent expense for the three months ended March 31, 2024 and 2023 amounted to $ 30,000 .

Areth is a company controlled by Dr.

Grossman, the Vice Chairman of the Company’s Board of Directors, and Adam S.

Grossman, the Company’s President and Chief Executive Officer.

The Company also reimburses Areth for office and building-related

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

During the nine months ended September 30, 2023 and 2022, the Company purchased certain specialized medical equipment and

services primarily related to the Company’s plasma collection centers, as well as personal protective equipment, from GenesisBPS and its affiliates (“Genesis”), aggregating to $ 0.4 million and $ 0.1 million, respectively.

Grossman, the Company’s President, Chief Executive

Officer and Interim Chief Financial Officer.

The Company also reimburses Areth for office and building-related (common area) expenses, equipment and certain other operational expenses, which were not material to the condensed consolidated

financial statements for the three months ended March 31, 2024 and 2023.

During the three months ended March 31,

2024 and 2023, the Company purchased certain specialized medical equipment and services primarily related to the Company’s plasma collection centers, as well as personal protective equipment, from GenesisBPS and its affiliates (“Genesis”),

aggregating to $ 0.1 million.

Genesis is owned by Dr.

and Adam Grossman.

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

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

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

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

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

There were no transactions with

Perceptive during the nine months ended September 30, 2023.

Grossman and Mr.

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.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

gained access to the system.

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

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

At the time of the

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

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

production or had any alternative use.

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

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

In addition, during the second quarter of 2023,

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

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

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

ADMA will be reimbursed for the insurance claims made pertaining to these charges, the Company is actively working with its insurance broker and carriers.

COVID-19 Pandemic

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

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

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

A substantial portion of such testing had

historically been performed by contract laboratories outside the United States.

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

packages, persisting social distancing measures and varying roll-outs of vaccinations by state, the Company at times experienced lower than normal donor collections at its FDA approved plasma collection centers during 2021 and part of 2022.

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

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

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

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

COVID-19 pandemic previously impacted, to a certain degree, the Company’s customer engagement initiatives, whereby ADMA’s sales and medical affairs field personnel faced difficulties communicating directly with physicians and other healthcare

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

The pandemic could also impact the Company’s ability to interact with the FDA or other regulatory authorities and could result in delays in the conduct of inspections

or review of pending applications or submissions.

Although the Company has received FDA approvals for six of its plasma collection centers since January 1, 2022 and previously received several other FDA approvals while two FDA inspections of the Boca Facility were completed during the year ended December 31, 2021, no assurances can be provided as to the timing for completion of any future regulatory

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

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

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

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

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

condition or results of operations, and the Company does not believe that its production operations at the Boca Facility, the Company’s contract fill/finishers or its plasma collection facilities have been significantly impacted by the

COVID-19 pandemic.

As a result, the Company does not anticipate and has not experienced any material impairments with respect to any of its long-lived assets, including the Company’s property and equipment, goodwill or intangible assets.

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.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Although the COVID-19 pandemic has not, to date, materially adversely impacted the Company’s capital and financial

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

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

or results of operations.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Vendor Commitments

Pursuant to the terms of a plasma purchase agreement with BPC dated as of November 17, 2011 (the “2011 Plasma Purchase

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

wholly-owned ADMA plasma collection facilities.

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

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

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

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.

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

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

Unless terminated earlier, the 2011 Plasma Purchase

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

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

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

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

containing antibodies to RSV from Grifols.

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

Effective January 1, 2022, RSV plasma purchased

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

collection centers owned by Grifols.

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

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 Company and BPC entered into an amendment to the Plasma Supply Agreement to provide, among other things, that in

the event BPC 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 BPC, then BPC shall reimburse ADMA BioManufacturing for the difference in price ADMA BioManufacturing incurs.

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

Plasma Supply Agreement to Grifols, effective January 1, 2019.

On June 6, 2017, the Company and BPC entered into a Plasma Purchase Agreement (the “2017 Plasma Purchase Agreement”),

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

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

On July 19, 2018, the Company and BPC entered into an amendment to the 2017 Plasma Purchase Agreement to, among other things, provide agreed upon amounts of normal source plasma to be supplied by BPC to ADMA

BioManufacturing in calendar year 2019 at a specified price per liter, provided that ADMA BioManufacturing delivers a valid purchase order to BPC.

Additionally, pursuant to the amendment to the 2017 Plasma Purchase Agreement, BPC agreed that,

for calendar years 2020 and 2021, it shall supply no less than a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts, provided that such requested NSP amounts are within an agreed range, at a price per liter to be

mutually determined.

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

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

On December 10, 2018, BPC assigned

its rights and obligations under the Plasma Purchase Agreement to Grifols, effective January 1, 2019.

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

extended through December 31, 2022, however Grifols’ commitment to supply the Company with NSP under this agreement was not satisfied until March of 2023.

In order to maintain a reliable supply of raw material plasma thereafter, the Company

has executed additional agreements with multiple third-party suppliers of NSP.

The Company has also increased its number of plasma collection center buildouts such that the Company expects to have ten FDA-approved plasma collection centers in operation by the end of 2023, while also continuing to increase its plasma collection capabilities at its ADMA BioCenters

plasma collection centers business segment.

Through December 31, 2022, the

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

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

For the nine months

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

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, 2019.

Post-Marketing Commitments

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

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

impairment in BIVIGAM-treated patients with primary humoral immunodeficiency.

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

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

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

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

of $ 1.7 million and $ 1.5

million, respectively.

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

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

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

respectively.

The Company expects to incur expenses of approximately $ 1.3 million to complete this study, which is required to be

completed by June of 2026.

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

For the three months ended March 31,

2024 and 2023, the Company incurred expenses related to this study in the amount of $ 0.3 million and $ 0.2 million, respectively.

The Company expects to incur expenses of approximately $ 1.2 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 with Brian Lenz, the Company’s Executive Vice

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

The Company previously entered into employment agreements with Mr.

Grossman and with Brian Lenz, the Company’s former Executive Vice President, Chief Financial Officer and General Manager, ADMA BioCenters.

Effective as of April 1,

Lenz transitioned to a non-employee consulting role and entered into a consulting agreement with the Company.

On April 1, 2024, the Company entered into an employment agreement with Kaitlin Kestenberg, who was promoted to Chief

Operating Officer and Senior Vice President, Compliance.

Other Commitments

3 unchanged sentences

The Company’s maximum exposure under these arrangements is

unknown as of September 30, 2023.

unknown as of March 31, 2024.

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

1 unchanged sentence

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company’s ADMA BioManufacturing segment reflects the Company’s immunoglobulin manufacturing, commercial and development operations in Boca Raton, FL.

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

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The Company’s ADMA

BioManufacturing operating segment reflects the Company’s immunoglobulin manufacturing, commercial and development operations in Boca Raton, FL.

The Plasma Collection Centers operating segment consists of ten plasma collection facilities located throughout the United States, all of which are operational, collecting plasma and currently hold FDA licenses .

The Company defines its operating segments as those business units whose operating results are

regularly reviewed by the chief operating decision maker (“CODM”) to analyze performance and allocate resources.

While not considered an operating segment, the Corporate information included in the tables below consists of certain unallocated

general and administrative overhead expenses and interest expense on the Company’s senior debt (see Note 7).

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

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

Three Months Ended September 30, 2023

BioManufacturing

For the Company’s two operating segments, the CODM uses income/loss before taxes as the measure of segment profit to determine the allocation of resources for each segment.

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

Three Months Ended March 31 , 2024

(in thousands)

ADMA BioManufacturing

Plasma Collection

2 unchanged sentences

Interest and other expense, net

Net income (loss)

Depreciation and amortization expense

Three Months Ended September 30, 2022

Income (loss) before taxes

Capital expenditures

Depreciation expense

Three Months Ended March 31 , 2023

(in thousands)

ADMA BioManufacturing

Plasma Collection

BioManufacturing

Cost of product revenue

1 unchanged sentence

Interest and other expense, net

Net income (loss)

Depreciation and amortization expense

Income (loss) before taxes

Capital expenditures

Depreciation expense

ADMA BIOLOGICS, INC.

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended September 30, 2023

Plasma Collection

BioManufacturing

Cost of product revenue

Income (loss) from operations

Interest and other expense, net

Net income (loss)

Capital expenditures

Depreciation and amortization expense

Nine Months Ended September 30, 2022

Plasma Collection

BioManufacturing

Cost of product revenue

Loss from operations

Interest and other expense, net

Loss on extinguishment of debt

Capital expenditures

Depreciation and amortization expense

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

United States

8 unchanged sentences

AND SUBSIDIARIES

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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.

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

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

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

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

an initial term of 12 months or less are not recorded on the balance sheet.

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.

The Company’s lease expense is recognized on a

straight-line basis over the lease term and is reflected in Plasma center operating expenses and Selling, general and administrative expenses.

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

Cash paid for

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

respectively.

The Company has aggregate lease liabilities of $ 10.9 million and $ 11.6 million as of September 30, 2023 and

December 31, 2022, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers and a warehouse lease for raw material storage related to the Company’s immunoglobulin manufacturing operations.

The Company’s lease expense is recognized on a straight-line basis over the lease

term and is reflected in Plasma center operating expenses and Selling, general and administrative expenses.

Aggregate lease expense for the Company’s leases for the three months ended March 31, 2024 and 2023 was approximately $ 0.6 million .

Cash paid for the Company’s leases for the three months ended March 31, 2024 and 2023 was also approximately $ 0.6 million.

The Company has aggregate lease liabilities of $ 10.6 million and $ 10.8 million as

of March 31, 2024 and December 31,

2023, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers and a warehouse lease for raw material storage related to the Company’s immunoglobulin manufacturing operations.

Company’s operating leases have a weighted average remaining term of 7.4 years.

Scheduled payments under the

Company’s lease obligations are as follows:

Scheduled payments under the Company’s lease obligations are as follows (in thousands):

Remainder of 2024

3 unchanged sentences

Current portion

Balance at September 30, 2023

Balance at March 31, 2024

The Company uses the estimated annual effective tax rate approach as prescribed by ASC

740-270, Interim Reporting, to calculate its interim tax provision.

For the three months ended March 31, 2024, the Company recorded income tax expense of $ 0.6

million, resulting in an effective tax rate of 3.2 %.

The tax expense for the three months ended March 31, 2024 represents federal and

state tax liabilities that are not fully sheltered by net operating loss carryforwards (“NOLs”) or research and development tax credit carryforwards due to limitations from prior ownership changes and other limitations on NOLs incurred after 2017 .

The Company’s effective tax rate differs from the federal statutory tax rate of 21 % due

primarily to the reversal of the valuation allowance on certain federal and state NOLs estimated to be realized in the current year.

Valuation Allowance

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, the Company continues to maintain a full valuation allowance against

its net deferred tax assets.

Net Operating Losses

As of December 31, 2023, the Company had federal and state (post-apportioned basis)

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

As of December 31, 2023, approximately $ 267.8 million of the foregoing federal NOLs are subject to limitation under Section 382 due

to prior ownership changes.

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.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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

Supplemental cash flow information for the three months ended March 31, 2024 and 2023 is as follows:

(In thousands)

SUPPLEMENTAL CASH FLOW INFORMATION:

2 unchanged sentences

Equipment acquired reflected in accounts payable and accrued liabilities

Right-to-use assets in exchange for lease obligations

Warrants issued in connection with notes payable

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

What changed 10-Q

Item 1. Financial Statements