What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2023-11-08 · 316 added, 439 removed, 122 unchanged (86% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations, which refers to our historical results, should be read in conjunction with the other sections of this Quarterly

Report on Form 10-Q, including “Risk Factors” and our unaudited consolidated financial statements and the notes thereto appearing elsewhere herein, and in conjunction with the Management’s Discussion and Analysis of Financial Condition and

Results of Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 23, 2023 (the “2022 10-K”).

The various sections of this discussion contain a number of forward-looking statements, all of

which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout or referenced within this Quarterly Report on Form 10-Q.

See “Special Note Regarding Forward-Looking Statements.” Our

actual results may differ materially from our current expectations.

The following discussion of our financial condition and results of operations, which refers to our historical results, should be read in conjunction with the other sections of this Quarterly Report

on Form 10-Q, including “Risk Factors” and our unaudited consolidated financial statements and the notes thereto appearing elsewhere herein, and in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of

Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 28, 2024 (the “2023 10-K”).

The various sections of this discussion contain a number of forward-looking statements, all of which are

based on our current expectations and could be affected by the uncertainties and risk factors described throughout or referenced within this Quarterly Report on Form 10-Q.

See “Special Note Regarding Forward-Looking Statements.” Our actual results

may differ materially from our current expectations.

ADMA Biologics, Inc.

(the “Company,” “ADMA,” “we,” “us” or “our”) 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.

Our targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or

who may be immune-suppressed for medical reasons.

We currently have three products with U.S.

(the “Company,” “ADMA,” “we,” “us” or “our”) 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.

Our targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or who may be

immune-suppressed for medical reasons.

Through our ADMA BioManufacturing business segment, we currently have three products with U.S.

Food and Drug Administration (the “FDA”) approval, 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 we 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 we 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 HBsAg and other listed exposures to Hepatitis B.

We seek to develop a

pipeline of plasma-derived therapeutics, including but not limited to, a product based on our most recently approved patent application under U.S.

10,259,865 related to methods of treatment and prevention of S.

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 in adults and adolescents, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019;

(ii) BIVIGAM (Immune Globulin Intravenous, Human), an IVIG product indicated for the

treatment of PI, and for which we 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 HBsAg and other listed exposures to Hepatitis B.

We seek to develop a pipeline of plasma-derived therapeutics, including a product based on our most recently approved patent application under U.S.

10,259,865 related to methods

of treatment and prevention of S.

pneumonia infection for an immunoglobulin manufactured to contain standardized antibodies to numerous serotypes of S.

Our 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.

We manufacture these products at our FDA-licensed, plasma fractionation and purification facility located in Boca Raton, Florida with a peak annual source plasma processing capability of up to 600,000 liters (the

“Boca Facility”).

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

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

At these revenue levels, we forecast achieving

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

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

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

These assumptions translate to potential

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

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

This business unit, which we refer to as our Plasma Collection Centers business segment, provides us

with substantially all of our blood plasma for the manufacture of our products, and also allows us to sell certain quantities of source plasma and certain other plasma products to third-party customers for further manufacturing.

Currently, nine

of our plasma collection centers hold FDA licenses, with the remaining plasma collection center anticipated to receive FDA approval later in 2023.

In addition, three of our FDA-approved plasma collection centers also have approvals from the

Korean Ministry of Food and Drug Safety (“MFDS”), as well as FDA approval to operate a Hepatitis B immunization program.

A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000

liters of source and hyperimmune plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase and market conditions at the time of sale.

Plasma collected from ADMA BioCenters’ facilities that is

not used to manufacture our products is sold to third-party customers in the U.S.

Our 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.

We manufacture these products at our FDA-licensed, plasma fractionation and purification facility located in Boca Raton, Florida with a peak annual processing capability of up to 600,000 liters (the “Boca Facility”).

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

representing annual revenues greater than $355 million in 2024 and $410 million in 2025.

These revenue targets translate to potential fiscal year 2024 and 2025 net income exceeding $85 million and $135 million, respectively, and adjusted EBITDA

exceeding $110 million and $160 million, respectively.

Through our ADMA BioCenters subsidiary, we currently operate ten source plasma collection facilities in the United States, all of which hold FDA licenses.

This business unit, which we refer to as our Plasma Collection

Centers business segment, provides us with the blood plasma required for the manufacture of our products, and also allows us to sell certain quantities of source and hyperimmune plasma to third-party customers for further manufacturing.

addition, three of our FDA-approved plasma collection centers also have approvals from the Korean Ministry of Food and Drug Safety (“MFDS”), as well as FDA approval to operate a Hepatitis B immunization program.

A typical plasma collection center,

such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source and hyperimmune plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase and market

conditions at the time of sale.

Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products is sold to third-party customers in the U.S.

and in other locations outside the U.S.

where we are approved under supply agreements or in the open “spot” market.

We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products.

In January 2020, we announced our entry into a

five-year manufacturing and supply agreement to produce and sell these intermediate by-products, which are used as the starting raw material to produce other plasma-derived biologics.

In addition, from time to time we provide contract

manufacturing and testing services for certain third-party clients.

We also provide laboratory contracting services to certain customers and anticipate providing contract filling, labeling and packaging services in light of the FDA approval of

our in-house fill-finish capabilities.

BIVIGAM is a plasma-derived IVIG that contains a broad range of antibodies similar to those found in normal human plasma.

These antibodies are directed against bacteria and viruses

and help to protect PI patients against serious infections.

BIVIGAM is a purified, sterile, ready-to-use preparation of concentrated human Immunoglobulin G antibodies indicated for the treatment of PI, a group of genetic disorders.

includes, but is not limited to, the humoral immune defect in common variable immunodeficiency, X-linked agammaglobulinemia, congenital agammaglobulinemia, Wiskott-Aldrich syndrome and severe combined immunodeficiency.

These Pis are a group of

genetic disorders.

Based on recent estimates, these disorders are no longer considered to be very rare, with as many as one in every 1,200 people in the United States having some form of PI.

On May 9, 2019, the FDA approved the Prior Approval Supplement (the “PAS”) for the use of our IVIG manufacturing process, thereby enabling us to re-launch and commercialize this product in the

United States.

We resumed production of BIVIGAM during the fourth quarter of 2017 and commercial production is ongoing, using our FDA-approved IVIG manufacturing process under U.S.

Department of Health and Human Services (“HHS”) License No.

The commercial re-launch and first commercial sales for this product commenced in August of 2019.

On April 28, 2021, we announced that the FDA granted approval for our expanded plasma pool production scale process, allowing for a 4,400-liter plasma pool for the manufacture of our BIVIGAM IVIG product.

increased IVIG plasma pool scale, which allows us to produce BIVIGAM at an expanded capacity utilizing the same equipment, release testing assays and labor force, has had a favorable impact on our gross margins and operating results.

where we are approved under supply

agreements or in the open “spot” market.

We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products, through a five-year plasma intermediates supply

agreement we entered into in October 2019.

These intermediate by-products are used as the starting raw material to produce other plasma-derived biologics.

In addition, from time to time we provide contract manufacturing services for certain

third-party clients.

We also provide laboratory contracting services to certain customers and anticipate providing contract filling, labeling and packing services utilizing our FDA-approved in-house fill-finish capabilities.

ASCENIV is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies, which are proteins that are used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent

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The Centers for Medicare and Medicaid Services (“CMS”) has issued a permanent, product-specific-J-code for ASCENIV.

the Healthcare Common Procedure Coding System (“HCPCS”), the J-code (J1554) became effective April 1, 2021.

As part of our proprietary manufacturing process for ASCENIV, we leverage our unique, patented plasma donor screening methodology and

tailored plasma pooling design, which blends normal source plasma and plasma from donors tested to have high levels of neutralizing antibody titers to Respiratory Syncytial Virus (“RSV”) using our proprietary microneutralization testing assay.

are able to identify the high titer or “hyperimmune” plasma that meets our internal and required specifications for ASCENIV with our patented testing methods and assay.

This type of high titer plasma is typically found in less than 10% of the

total donor collection samples we test.

ASCENIV is approved for the treatment of Primary Immune Deficiency Disorder (“PIDD”), a class of inherited genetic disorders that causes a deficient or absent immune system in

adults and adolescents (12 to 17 years of age).

Healthcare Common Procedure Coding System (“HCPCS”), the J-code (J1554) became effective April 1, 2021.

As part of our proprietary manufacturing process for ASCENIV, we leverage our unique, patented plasma donor screening methodology and tailored

plasma pooling design, which blends normal source plasma and plasma from donors tested to have high levels of neutralizing antibody titers to Respiratory Syncytial Virus (“RSV”) using our proprietary microneutralization testing assay.

patented testing methods and assay, we are able to identify the high-titer or “hyperimmune” plasma that meets our internal and required specifications for ASCENIV.

This type of high-titer plasma is typically found in less than 10% of the total

donor collection samples we test.

ASCENIV is approved for the treatment of PIDD or PI, a class of inherited genetic disorders that causes a deficient or absent immune system in adults and adolescents (12 to 17 years of

Our pivotal Phase III clinical trial in 59 PIDD patients met the primary endpoint of no Serious Bacterial Infections (“SBI”) reported during 12 months of treatment.

Secondary efficacy endpoints

further demonstrated the benefits of ASCENIV in the low incidence of infection, therapeutic antibiotic use, days missed from work/school/daycare and unscheduled medical visits and hospitalizations.

We believe this clinical data together with

the FDA approval for the treatment of PIDD better positions ADMA to potentially further evaluate ASCENIV in immune-compromised patients infected with or at-risk for RSV infection or potentially other respiratory viral pathogens at an

appropriate time.

Due to the COVID-19 pandemic, our plans have been delayed.

In the future however, we may work with the FDA and the immunology and infectious disease community to design an appropriate clinical trial to evaluate the use of

ASCENIV in this patient population.

Commercial sales of ASCENIV commenced in October of 2019 and our commercial and medical education efforts are focused on the labeled indication of patients with PIDD.

ASCENIV’s prescriber and patient

base continued to expand during the fourth quarter of 2022, which drove record utilization and pull-through for the product.

These elevated demand trends have sustained into 2023, and ADMA currently expects that this product’s rapid growth will

continue throughout 2023 and beyond.

Secondary efficacy endpoints further demonstrated the benefits of ASCENIV

in the low incidence of infection, therapeutic antibiotic use, days missed from work, school and daycare and unscheduled medical visits and hospitalizations.

We believe this clinical data together with the FDA approval for the treatment of PIDD

better positions ADMA to potentially further evaluate ASCENIV in immune-compromised patients infected with or at-risk for RSV infection or potentially other respiratory viral pathogens at an appropriate time.

In the future, we may elect to work

with the FDA and the immunology and infectious disease community to design an appropriate clinical trial to evaluate the use of ASCENIV in this patient population.

Following FDA approval in April 2019, commercial sales of ASCENIV commenced in

October of 2019 and in 2023 ADMA commenced manufacturing ASCENIV at the 4,400 Liter production scale for the first time in the Company’s history.

We believe that this expansion will meaningfully improve the product’s margin profile and

increase plant production capacity as fewer batches will be needed to support our revenue goals .

ASCENIV’s prescriber and patient base continued to expand during 2023, which drove record utilization and

pull-through for this product.

These elevated demand trends have sustained into 2024, and ADMA currently expects that this product’s rapid growth will continue throughout 2024 and beyond.

BIVIGAM is a plasma-derived IVIG that contains a broad range of antibodies similar to those found in normal human plasma.

These antibodies are directed against bacteria and viruses and help to protect PI patients

against serious infections.

BIVIGAM is a purified, sterile, ready-to-use preparation of concentrated human Immunoglobulin G antibodies indicated for the treatment of PI, a group of genetic disorders.

This includes, but is not limited to, the

humoral immune defect in common variable immunodeficiency, X-linked agammaglobulinemia, congenital agammaglobulinemia, Wiskott-Aldrich syndrome and severe combined immunodeficiency.

These PIs are a group of genetic disorders.

Based on recent

estimates, these disorders are no longer considered to be very rare, with as many as one in every 1,200 people in the United States having some form of PI.

On May 9, 2019, the FDA approved the Prior Approval Supplement (the “PAS”) for the use of our IVIG manufacturing process, thereby enabling us to re-launch and commercialize this product in the United States.

production of BIVIGAM during the fourth quarter of 2017 and commercial production is ongoing, using our FDA-approved IVIG manufacturing process under U.S.

Department of Health and Human Services (“HHS”) License No.

The commercial re-launch

and first commercial sales for this product commenced in August of 2019.

operating results.

On December 12, 2023, we announced that the FDA approved the expansion of BIVIGAM’s label in the United States to now include the pediatric setting for those two years of age and older.

Nabi-HB is a hyperimmune globulin that is rich in antibodies to the Hepatitis B virus.

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acute Hepatitis B virus infection in specific, listed settings.

Hepatitis B is a potentially life-threatening liver infection caused by the Hepatitis B virus.

It is a major global health problem.

It can cause chronic infection and puts people at

high risk of death from cirrhosis and liver cancer.

Hepatitis B is a potentially life-threatening liver infection caused by the Hepatitis B virus, which is a major global health problem.

The Hepatitis B virus can cause chronic infection

and places people at high risk of death from cirrhosis and liver cancer.

Nabi-HB has a well-documented record of long-term safety and effectiveness since its initial market introduction.

The FDA approved Nabi-HB on March 24, 1999.

Production of Nabi-HB at the Boca

Facility has continued under our leadership since the third quarter of 2017.

In early 2018, we received authorization from the FDA for the release of our first commercial batch of Nabi-HB for commercial distribution in the U.S.

and we continue to

manufacture Nabi-HB under HHS License No.

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

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

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

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

A substantial portion of such testing had historically been performed by contract laboratories

outside the United States.

Due to a combination of previously mandated state and local “shelter-in-place” orders, as well as government stimulus packages, persisting social distancing measures and varying roll-outs of vaccinations by state, we

experienced at times lower than normal donor collections at our FDA approved plasma collection centers during 2021 and part of 2022.

From time to time during 2021 and 2022, we were also subject to delays in shipments of source plasma from our

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 our products.

In addition, we have been

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

have in the past.

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

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

The pandemic could also impact our ability to interact with the FDA or other regulatory authorities and could result in delays in the conduct of inspections or review of pending applications or submissions.

we have received FDA approvals for six of our plasma collection centers since January 1, 2022 and previously received several other FDA approvals while two FDA inspections of the Boca Facility were completed during the year ended December 31,

2021, no assurances can be provided as to the timing for completion of any future regulatory submissions or applications that may be impacted by restrictions related to COVID-19.

During the nine months ended September 30, 2023 and 2022, the Company’s total revenues attributable to international customers was approximately 6% and 7%, respectively.

As we seek to grow this aspect of our

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

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

Facility, our contract fill/finishers or our plasma collection facilities have been significantly impacted by the COVID-19 pandemic.

As a result, we do not anticipate and have not experienced any material impairments with respect to any of our

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

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

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

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

liquidity and results of operations.

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

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

IT SYSTEMS DISRUPTION

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

Our investigation of the disruption has essentially been completed

with the assistance of third-party consultants.

While no definitive root cause has been identified, as previously disclosed we believe that this IT systems disruption may have been caused by a third-party who may have gained access to the system.

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

Normal operations have resumed across our business units.

At the time of the disruption, we were in production of two batches

of BIVIGAM, and after a prolonged hold time, it was deemed to be a prudent GMP quality decision to discard these two in-process production batches as these batches were no longer viable for further production or had any alternative use.

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

ended September 30, 2023.

In addition, during the second quarter, of 2023, the Company’s Plasma center operating expenses were adversely impacted by approximately $0.7 million due to the temporary closing of our plasma collection centers while

their IT systems were restored.

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

insurance broker and carriers.

Production of

Nabi-HB at the Boca Facility has continued under our leadership since the third quarter of 2017.

In early 2018, we received authorization from the FDA for the release of our first commercial batch of Nabi-HB for commercial distribution in the

United States and we continue to manufacture Nabi-HB under HHS License No.

RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our condensed consolidated financial statements, which have been prepared in accordance with Accounting

Principles Generally Accepted in the United States of America (“U.S.

The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets,

liabilities, revenues and expenses.

Generally Accepted in the United States of America (“U.S.

The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues

and expenses.

On an ongoing basis, we evaluate these estimates and assumptions, including those described below.

We base our estimates on our historical experience and on various other assumptions that we believe to be

reasonable under the circumstances.

We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the

circumstances.

These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results and experiences may

differ materially from these estimates.

Significant estimates include rebates and certain other deductions from gross revenues, impairment of long-lived assets, assumptions used in projecting future liquidity and capital requirements, assumptions

used in the fair value of awards granted under our equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for our deferred tax assets.

Actual results and experiences may differ materially from these

Significant estimates include rebates and certain other deductions from gross revenues, valuation of inventory, impairment of long-lived assets, assumptions used in projecting future liquidity and capital requirements, assumptions used

in the fair value of awards granted under our equity incentive plans and warrants issued in connection with the issuance of notes payable and estimates related to the valuation allowance for our deferred tax assets our effective tax rate for the

current fiscal year.

Some of the estimates and assumptions we have to make under U.S.

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Our gross product revenues are subject to a variety of deductions, which are estimated and recorded in the same period that the revenues are recognized.

These deductions primarily consist of rebates, distribution

fees, chargebacks and sales allowances.

These deductions represent estimates of the related obligations, some of which are contractual in nature and do not require extensive judgment to be exercised by management, while other estimates require

complex or subjective matters of knowledge and judgment when estimating the impact of these revenue deductions on net revenues for a reporting period.

These deductions primarily consist of rebates, distribution fees,

chargebacks and sales allowances.

subjective matters of knowledge and judgment when estimating the impact of these revenue deductions on net revenues for a reporting period.

Historically, adjustments to these estimates to reflect actual results or updated expectations have not been material to our overall business.

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

were approved for commercial sale by the FDA in 2019.

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

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

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

While we have some historical sales and rebate experience from our two

primary immunoglobulin products, ASCENIV and BIVIGAM, since their FDA approvals in 2019, it is not extensive.

If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate estimates of our future experience,

our results could be materially affected.

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

Medicaid rebates because of the extensive time delay

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

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

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

operations in the future.

Medicaid rebates because of the extensive time delay between the recording of the accrual and its ultimate settlement,

an interval that can generally take up to several years or more.

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

While our results of operations to date have not required any material

adjustment due to this risk, the delay between when this obligation is initially recorded and ultimately settled could potentially materially impact our revenues and our results of operations in the future.

Valuation of Inventory

Estimates related to the valuation of inventory include net realizable value of inventory in determining whether the cost of inventory exceeds its net realizable value which, if this were the case, would require a

charge against earnings to write down the value of the inventory to its net realizable value.

Net realizable value of inventory is based on our management’s estimate of the future net selling price of the inventory, which is subject to market

conditions and the estimation processes we use for revenues as discussed above.

With respect to raw materials inventory, we are required to estimate the level and timing of usage of these materials prior to their expiration dates in determining

whether it is appropriate to carry these materials on our balance sheet as a valid asset of the Company.

Changes in either of these estimates could materially impact our cost of product revenue and results of operations.

Stock-Based Compensation and Valuation of Warrants

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For the purpose of valuing stock options granted to our employees, directors and officers, we use the Black-Scholes option pricing model.

The Black-Scholes option valuation model

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

The Black-Scholes option valuation model was

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

The Company’s employee stock options have characteristics significantly different from those of traded

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Treasury yield curve in effect at the time of the grant with a term

consistent with the expected term of our awards.

consistent with the term of our awards.

The expected term of the options granted is in accordance with U.S.

Securities and Exchange Commission (“SEC”) Staff Accounting Bulletins 107 and 110 and is based on the average between vesting

terms and contractual terms.

Securities and Exchange Commission (“SEC”) Staff Accounting Bulletins 107 and 110 and is based on the average between vesting terms and

contractual terms.

The expected dividend yield reflects our current and expected future policy for dividends on our Common Stock.

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

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

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

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

expense and our results of operations.

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

Common Stock since our Common Stock became publicly traded.

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

Any changes in

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

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

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If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s carrying value is recoverable.

Any resulting impairment is

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

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

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

Any resulting impairment is recorded

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

For the three months ended March 31, 2024 and 2023, we did not identify any impairment indicators for our long-lived assets, and as

a result no impairment charges were recorded.

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

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An expectation of losses or reduced profits associated with an asset.

This could result, for example, from the introduction of a competitor’s product that impacts projected revenue growth, or a change in the acceptance of a product

by patients, physicians and payers that results in an inability to sustain projected product revenues.

This could result, for example, from the introduction of a competitor’s product that impacts projected revenue growth, or a change in the acceptance of a product by

patients, physicians and payers that results in an inability to sustain projected product revenues.

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

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market capitalization.

Determination of the fair value and carrying value of each reporting unit, relative to the fair value of the Company, requires management to employ certain estimates, assumptions and judgment, which we believe are

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

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

2023 and 2022.

Deferred Tax Assets

We maintain a full valuation allowance against all of our net deferred tax assets, and as a result have recorded no income tax benefit in the accompanying consolidated financial statements.

This valuation allowance

reflects our assessment of whether it is more likely than not that we will generate sufficient taxable income in the future to be able to utilize our deferred tax assets.

In determining whether a valuation allowance is warranted, we evaluate

factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies.

We consider all positive and negative evidence to estimate if sufficient future taxable income will be generated to realize

our deferred tax assets.

We did not recognize any impairment charges related to goodwill for the three months ended March 31, 2024 and 2023.

Deferred Tax Assets and Effective Tax Rate

We currently maintain a full valuation allowance against all of our net deferred tax assets, and as a result we have historically not recorded an income tax benefit in the accompanying consolidated financial statements

despite continued losses through December 31, 2023.

This valuation allowance reflects our assessment of whether it is more likely than not that we will generate sufficient taxable income in the future to be able to utilize our deferred tax assets.

In determining whether a valuation allowance is warranted, we evaluate factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies.

We consider all positive and negative evidence to

estimate if sufficient future taxable income will be generated to realize our deferred tax assets.

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

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

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

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

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

September 30, 2022:

Three Months Ended September 30,

Based on our history of losses through December 31,

2023, at this time we have not included future projected taxable income as a source of income to recognize our deferred tax assets, despite our achievement of positive net income for the three months ended March 31, 2024.

After consideration of all available positive and negative evidence regarding our estimates of future taxable income, we have elected to maintain a full valuation allowance for our deferred tax assets as of March 31,

We will continue to monitor this evidence through the balance of 2024 to determine if a reduction to the valuation allowance is required, which could potentially result in our recognition of an income tax benefit sometime during fiscal 2024.

Our income tax expense for the three months ended March 31, 2024 is based on our estimated effective tax rate for the full year 2024, which is a function of our projected net income under U.S.

GAAP, our estimates and

assumptions regarding certain permanent and temporary differences between U.S.

GAAP income and taxable income, and the limitations to our net operating loss carryforwards and their limitations under Section 382 of the Internal Revenue Code of 1986,

as amended (see “Risk Factors” appearing elsewhere in this report and Note 13 to the Consolidated Financial Statements).

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

The following table presents a summary of the changes in our results of operations for the three months ended March 31, 2024, our first fiscal quarter, compared to the three months ended March 31,

(in thousands)

Three Months Ended March 31,

Increase (Decrease)

Cost of product revenue

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Interest expense

Other income (expense), net

Other income, net

Income (loss) from before taxes

Provision for income taxes

Net income (loss)

Adjusted EBITDA *

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

The increase is

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

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

During the first

quarter of 2023, we fulfilled our entire commitment to supply normal source plasma (“NSP”) to our primary third-party customer for fiscal 2023.

As a result, we do not expect to generate significant revenues from this business segment during the

remainder of 2023, as we anticipate using all of the plasma collected during that period to support our IVIG production operations.

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

We recorded total revenues of $81.9 million for the three months ended March 31, 2024, as compared to $56.9 million for the three months ended March 31, 2023, an increase of $25.0 million, or approximately 44%.

increase is primarily related to increased sales of our IG products, ASCENIV, BIVIGAM and Nabi-HB, of $30.5 million in 2024, as we continue to experience increased physician, payer and patient acceptance and utilization of ASCENIV and expand our

customer base for BIVIGAM.

The foregoing increase in IG revenues in the first quarter of 2024 was partially offset by a $5.6 million decrease in third-party plasma sales by our Plasma Collection Centers business segment.

During the first quarter

of 2023, we fulfilled our entire commitment to supply normal source plasma (“NSP”) to our primary third-party customer for fiscal 2023, while that same commitment for fiscal 2024 will be met over the course of the full year.

Cost of Product Revenue and Gross Profit

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

This increase is primarily attributable to

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

manufacturing costs in 2023 of $0.7 million.

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

As a result, we

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

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

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

Cost of product revenue was $42.8 million for the three months ended March 31, 2024, as compared to $40.4 million for the three months ended March 31, 2023.

This increase is primarily attributable to volume-driven

increases in product revenue costs related to the increased sales of our IG products of $7.9 million, partially offset by $4.9 million of lower product revenue costs related to plasma sales.

For the three months ended March 31, 2024, we had gross profit of $39.1 million, as compared to $16.5 million for the same period of a year ago, which represents a gross margin in the first quarter of 2024 of 47.8%, as

compared to 29.0% in the first quarter of 2023.

This improvement in gross margin is mainly driven by a significantly more favorable mix of higher margin IG sales in 2024 as compared to 2023, along with the 44% revenue increase which allows for

additional coverage of our non-variable manufacturing costs in 2024.

Research and Development Expenses

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

The decrease is primarily due to lower expenditures related

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

Research and development (“R&D”) expenses totaled $0.5 million for the first quarter of 2024, as compared to $0.9 million for the first quarter of 2023.

The decrease is primarily due to the absence of expenditures

in 2024 related to the BIVIGAM post-marketing commitments, which were completed in June of 2023.

Plasma Center Operating Expenses

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

As a result of our plasma center expansion

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

In addition, as a result of changes in

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

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

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

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

Plasma Center Operating Expenses decreased from $1.8 million for the three months ended March 31, 2023 to $1.0 million for the three months ended March 31, 2024.

The decrease is due to a 38% increase in the amount of

plasma collected in the first quarter of 2024 as compared to the first quarter of 2023, which resulted in a $3.7 million increase in the amount of plasma center costs we capitalized into inventory in 2024.

This amount was partially offset by

increases in donor fees of $1.3 million, softgoods and supplies of $0.7 million, donor testing expenses of $0.7 million, compensation, benefits and temporary labor of $0.1 million, depreciation of $0.1 million and software maintenance expense of

$0.1 million.

Amortization of Intangibles

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

Amortization expense mainly pertains to the amortization of intangible assets acquired in a 2017 acquisition transaction and was $0.2 million for the three months ended March 31, 2024 and 2023.

Selling, General and Administrative Expenses

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

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

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

Selling, general and administrative (“SG&A”) expenses were $15.6 million for the three months ended March 31, 2024, an increase of $1.1 million from the three months ended March 31, 2023.

The increase reflects

increases in employee-related costs, including salaries, benefits, stock-based compensation, travel, relocation and recruiting, in the amount of $1.4 million, state and local taxes of $0.1 million and insurance expense of $0.1 million, partially

offset by lower severance expense of $0.3 million and professional service fees of $0.2 million.

SG&A expenses as a percentage of net revenues decreased from 25.5% in the first quarter of 2023 to 19.1% in the first quarter of 2024.

Income/Loss from Operations

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

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

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

Our operating income was $21.8 million for the first quarter of 2024, as compared to an operating loss of $0.8 million for the first quarter of 2023.

The $22.6 million increase in operating income was due to the

improved gross profit, as total operating expenses of $17.3 million in 2024 was essentially unchanged from 2023.

Interest Expense

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

The increase is mainly due to rising interest rates on the

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

Other Income (Expense), Net

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

The increase is mainly due to an increase

in interest income of approximately $0.4 million in 2023.

Interest expense for the three months ended March 31, 2024 was $3.8 million, as compared to $6.1 million for the three months ended March 31, 2023.

The decrease is due to the refinancing of our senior debt in December

of 2023 (see “Liquidity and Capital Resources”).

This transaction reduced our stated rate of interest from approximately 14.10% in the first quarter of 2023 to approximately 10.38% in the first quarter of 2024, and also resulted in a reduction to

our outstanding debt principal in the first quarter of 2024 compared with the first quarter of 2023 of approximately $20.4 million.

In addition, we had lower amortization of debt discount in 2024 of approximately $0.2 million.

Other Income, Net

Other income, net, for the three months ended March 31, 2024 was $0.3 million, as compared to $0.1 million for the three months ended March 31, 2023.

The increase is mainly due to an increase in interest income of $0.2

million in 2024.

Provision for Income Taxes

As result of our generating pre-tax U.S.

GAAP income of $18.4 million for the three months ended March 31, 2024, we recorded income tax expense of $0.6 million for the three months ending March 31, 2024, with no

comparable amount for the three months ending March 31, 2023.

The provision for income taxes for the first quarter of 2024 represents an effective tax rate of 3.2% and reflects federal and state income tax liabilities that are not fully sheltered

by net operating losses or research and development tax credit carryforwards due to limitations from prior ownership changes and other limitations on net operating loss carryforwards under the Internal Revenue Code of 1986, as amended (see “Risk

Factors” appearing elsewhere in this report and Note 13 to the Consolidated Financial Statements).

Our effective tax rate for the three months ended March 31, 2024 differs from the federal statutory tax rate of 21%, mainly due to the reversal of

the valuation allowance on certain federal and state net operating loss carryforwards expected to be realized in the current year.

Net Income/Loss

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

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

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

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

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

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

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

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

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

Nine Months Ended September 30,

Cost of product revenue

Research and development expenses

Plasma center operating expenses

Amortization of intangibles

Selling, general and administrative expenses

Income (loss) from operations

Interest expense

Loss on extinguishment of debt

Other income (expense), net

Adjusted EBITDA *

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

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

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

Cost of Product Revenue and Gross Profit

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

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

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

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

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

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

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

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

As a result, we achieved a gross

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

Research and Development Expenses

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

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

ASCENIV post-marketing commitments we have with the FDA.

Plasma Center Operating Expenses

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

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

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

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

This amount was largely offset by increases in

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

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

In addition, our plasma center

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

Amortization of Intangibles

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

Selling, General and Administrative Expenses

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

The increase reflects higher expenses for data services

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

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

Income/Loss from Operations

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

The $40.7 million increase in operating income was

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

Interest Expense

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

The increase is mainly due to approximately $57.7 million of

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

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

Other Income (Expense), Net

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

The increase is mainly due to an

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

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

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

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

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

Our net income was $17.8 million for the first quarter of 2024, as compared to a net loss of $6.8 million for the first quarter of 2023.

This $24.6 million improvement in our results of operations was primarily due to

the increase in operating income of $22.6 million discussed above, combined with the reduction in interest expense for the period.

Non-GAAP Financial Measures

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

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

measure calculated and presented in accordance with U.S.

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

calculated and presented in accordance with U.S.

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

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

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

EBITDA and Adjusted EBITDA are not intended to represent cash flows

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

performance prepared in accordance with U.S.

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

Three Months Ended September 30,

Nine Months Ended September 30,

Although the Company uses

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

EBITDA and Adjusted EBITDA are not intended to represent cash flows for the

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

prepared in accordance with U.S.

The following table presents the reconciliation of net income/loss to EBITDA and Adjusted EBITDA for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

(in thousands)

Net income (loss)

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Stock-based compensation

IT systems disruption

Loss on extinguishment of debt

Adjusted EBITDA

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

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

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

Adjusted EBITDA increased by $24.0 million for the three months ended March 31, 2024 as compared to the same period of a year ago.

The improvement is driven primarily by the increased sales and gross profit in 2024, as

well as continued operational oversight and cost containment efforts at both of our business segments.

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

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

2021, respectively.

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

At March 31, 2024, we had working capital of $223.3 million, primarily consisting of $177.7 million of inventory, cash and cash equivalents of $45.3 million and $49.6 million of accounts receivable, partially offset by

current liabilities of $53.1 million, as compared to working capital at December 31, 2023 of $207.2 million, primarily consisting of $172.9 million of inventory, cash and cash equivalents of $51.4 million and accounts receivable of $27.4 million,

partially offset by current liabilities of $49.8 million.

We have incurred an accumulated deficit of $488.5 million since inception, and although we had negative cash flows from operations of $2.2 million and $14.7 million for the three months

ended March 31, 2024 and 2023, respectively, we had positive cash flows from operations for the year ended December 31, 2023 of $8.8 million and we expect to generate significant cash flows from operations and net income for the year ended December

Prior to fiscal 2023, we have funded our operations primarily from the sale of our equity and debt securities.

Our material cash requirements are primarily comprised of:

The collection and procurement of raw material plasma and other raw materials necessary to maintain and scale up our manufacturing operations;

The collection and procurement of raw material source plasma, which includes plasma donor fees and plasma center supplies, and other raw materials necessary to maintain and scale up our manufacturing operations;

Employee compensation and benefits;

Capital expenditures to complete the buildout for and maintain our plasma collection facilities and for equipment upgrades and capacity expansion at the Boca Facility;

Plasma donor fees and plasma center supplies;

Capital expenditures for equipment upgrades and capacity expansion at the Boca Facility and to maintain our plasma collection facilities;

Interest on our debt;

Marketing programs, medical education and continued commercialization efforts;

Boca Facility maintenance, upgrades, repairs and supplies;

Boca Facility maintenance, repairs and supplies;

Conducting required post-marketing clinical trials for our FDA-approved products;

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

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

maintain profitability on an ongoing basis.

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

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

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

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

projected revenues and expenses are correct.

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

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

some of our commercialization efforts or product development activities.

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

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

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

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

We currently anticipate, based upon our projected revenue and expenditures, that our current cash, cash equivalents and accounts receivable, along with our projected future operating cash flow, will be sufficient to

fund our operations, as currently conducted, through the end of the second quarter of fiscal 2025 and beyond.

Based on current operations and assuming continued market acceptance and utilization of our finished drug products, we do not anticipate

the need to raise additional capital at this time.

However, should the market for our products or political, economic or inflationary conditions change, we may need to seek additional capital which may not be available due to a variety of potential

factors beyond our control (see “Risk Factors” appearing elsewhere in this report).

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

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

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”).

Pursuant to an amendment to

the Hayfin Credit Agreement dated May 1, 2023 (the “Hayfin Second Amendment”), the obligation of the lenders to make the Hayfin Delayed Draw Loan expires on December 31, 2023, and was subject to the satisfaction of certain conditions, including,

but not limited to, our meeting certain 12-month revenue targets as set forth in the Hayfin Credit Agreement which have been met.

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).

After giving effect to the Hayfin Second Amendment, borrowings under the Hayfin Credit Agreement currently bear interest at the adjusted Term Secured Overnight Financing Rate (“SOFR”) for either

a one-month or three-month tenor, as elected by us, and subject to a floor of 1.25%, plus an applicable margin of 8.5% (the “Applicable Margin”);

provided, however, that upon, and during the continuance of, an Event of Default, the Applicable

Margin shall increase by an additional 3% per annum.

We will also continue 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.

Such interest paid “in

kind” will reduce our quarterly cash interest obligation by approximately $1.0 million and will be added to the principal amount of the outstanding debt under the Hayfin Credit Facility.

As a result, our outstanding debt principal on the Hayfin

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

respectively.

On the last day of each calendar month or quarter during the term of the Hayfin Credit Facility, we are required to pay accrued interest to Hayfin of approximately $1.5 million per month or approximately $4.4 million per quarter

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

As of September 30, 2023, the outstanding principal

balance on the Hayfin Loans is $157.7 million.

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

principal amount being paid.

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

We may prepay outstanding principal on the Hayfin Loans at any time and from time to time upon five business days’

prior written notice, subject to the payment to Hayfin of, (A) any accrued but unpaid interest on the prepaid principal amount plus (B) a 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.

The Hayfin Second Amendment also provides for a 50%

reduction to the foregoing early prepayment fees if the Hayfin Loans are prepaid under certain circumstances as defined in the Hayfin Second Amendment.

In addition, for any prepayments of principal, we are required to pay the 1.0% exit fee for

the amount of principal being paid.

All of our obligations under the Hayfin Credit Agreement are secured by a first-priority lien and security interest in substantially all of our tangible and intangible assets, including

intellectual property and all of the equity interests in our 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 our ability and the ability of our subsidiaries to, among other things and subject to certain exceptions contained in the Hayfin Credit Agreement, incur new indebtedness;

engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to our or our subsidiaries’ business activities;

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

change our fiscal year;

pay dividends;

repay certain other indebtedness;

On December 18, 2023 (the “Ares Closing Date”), we and all of our 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, we used the proceeds from the Ares Loans, along with a portion of our existing cash on hand, to terminate and pay in full all of the outstanding obligations

under our previous senior credit facility (the “Hayfin Credit Facility”) with Hayfin Services LLP (“Hayfin”) including the outstanding principal in the amount of $158.6 million, a prepayment penalty in the amount $11.1 million, an exit fee of

$1.6 million, all accrued and unpaid interest outstanding on the Hayfin Credit Facility as of the Ares Closing date, as well as certain fees and expenses related thereto.

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 initially bear interest at the adjusted Term SOFR for a three‑month tenor in effect on the day that is two business days prior to the first day

of the applicable calendar quarter plus 3.75% (the “SOFR Revolving Facility Applicable Margin”).

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, we are 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 Facility, and we are required to make quarterly interest payments during the term of Ares Credit Facility of approximately $3.6 million.

We 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 that we

prepay an amount under the revolving facility that is greater than 50% of the current $72.5 million outstanding balance, we will still be required to pay interest on 50% of this balance, or $36.3 million, through the term of Ares Credit Facility.

We 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, we incurred fees and expenses related to the transaction of approximately $2.7 million, including a $1.7 million original issue discount

payable to Ares, all of which was deducted from the Ares loan proceeds.

In addition, we are 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 our consolidated balance sheet as of December 31, 2023.

As a result, we 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.

All of our obligations under the Ares Credit Agreement are secured by a first-priority lien and security interest in substantially all of our tangible and intangible assets, including intellectual

property and all of the equity interests in our subsidiaries.

The Ares Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar

The negative covenants include certain financial covenants, including maximum total leverage ratios and a $15.0 million liquidity covenant, and also restrict or limit our ability and the ability of our 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 our or our

subsidiaries’ business activities;

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

engage in certain affiliate transactions;

or enter into, amend or terminate any other agreements that have the impact of restricting our ability to make loan

repayments under the Hayfin Credit Agreement.

In addition, we are 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 ending June 30, 2022 to $250.0 million for the fiscal quarter ending

December 31, 2026 and each fiscal quarter thereafter.

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

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

Net proceeds after underwriting discounts and expenses associated with the offering were

approximately $64.6 million and are being used to accelerate commercialization and production activities, complete plasma center buildouts and obtain FDA approvals, to conclude post‑FDA marketing approval research and development projects, and

for working capital, capital expenditures and general corporate purposes.

On September 3, 2021, we entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which we may offer and sell, from time to

time, at our option, through or to the Agent, up to an aggregate of $50 million of shares of our common stock (the “Distribution Agreement”).

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

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

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

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

or enter into, amend or terminate any other agreements that have the

impact of restricting our ability to make loan repayments under the Ares Credit Agreement.

As of March 31, 2024, we were in compliance with all of the covenants contained in the Ares Credit Agreement.

Events of default on the Ares Loans include, among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency

events, material judgments, cross-defaults to material contracts and events constituting a change of control.

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

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

Nine Months Ended September 30,

(in thousands)

Three Months Ended March 31,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net cash used in financing activities

Net change in cash and cash equivalents

2 unchanged sentences

Net Cash Used in Operating Activities

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

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

Cash used in operations for the three months ended March 31, 2024 was $2.2 million, a decrease of $12.5 million from the same period of a year ago, mainly due to the increase in net income in 2024, partially offset by

unfavorable changes in accounts receivable and inventories.

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

Nine Months Ended September 30,

(in thousands)

Three Months Ended March 31,

Net income (loss)

Non-cash expenses, gains and losses

5 unchanged sentences

Net Cash Used in Investing Activities

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

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

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

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

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

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

Net Cash Provided by Financing Activities

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

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

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

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

Net cash used in investing activities for the three months ended March 31, 2024 and 2023 was $2.4 million and $1.9 million, respectively, and is mainly comprised of capital expenditures at the Boca Facility.

decrease in capital expenditures in 2024 is due to the completion of the construction and buildout of our 10 plasma collection facilities, with the tenth facility opening in the first quarter of 2023.

While we currently have no firm commitments for

capital expenditures, we expect our total capital expenditures will be between $7.0 million and $12.0 million for the remainder of fiscal 2024, mainly for additional upgrades to the Boca Facility manufacturing operations and related operational

Net Cash Used in Financing Activities

Net cash used in financing activities was $1.4 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively.

The increase is due to additional taxes paid in connection with shares that were

withheld from RSUs that vested during the period, partially offset by $1.0 million in proceeds from the exercise of stock options in 2024.

Effect of Inflation

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

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

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

Based upon publicly available information and reports form the

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

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

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

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

We are unable to predict when these external drivers of inflation will subside.

Inflation impacted a number of facets of our business during the three months ended March 31, 2024 and for the years ended December 31, 2023 and 2022 at each of our business segments.

We experienced price increases

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

Based upon the macroeconomic

environment, publicly available information and reports from the U.S.

government, we expect this trend to continue in 2024 and potentially longer, which could potentially have a significant impact on our future results of operations.

some of our third-party inventory purchase agreements provide for annual price increases that are tied to various consumer price indices, which have resulted in higher than historical percentage price increases and has resulted in and could

continue to result in higher source plasma and other raw material and supplies costs in 2024 and beyond.

Also, in a higher inflationary environment, we may not be able to raise the prices of our products to keep up with the rate of inflation.

are unable to predict when these external drivers of inflation will subside.

Off-Balance Sheet Arrangements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis