ADMA BIOLOGICS, INC. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2020. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2020, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Annual Report on Internal Control Over Financial Reporting The Management of ADMA Biologics, Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of its internal control over financial reporting as of December 31, 2020. In making this assessment, management used the criteria set forth in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2020 based on those criteria. As a Smaller Reporting Company, the Company is not required to include in this Annual Report on Form 10-K a report on the effectiveness of its internal control over financial reporting by the Company’s independent registered public accounting firm. Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting during the quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. 66 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Information required to be disclosed by this Item with respect to our executive officers is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Executive Officers and Director and Officer Compensation: Executive Officers” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. Information required to be disclosed by this Item about our Board of Directors (the “Board”) is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Proposal No. 1: Election of Directors” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. To the extent necessary, information required to be disclosed by this Item about the Section 16(a) compliance of our directors and executive officers is incorporated into this Annual Report on Form 10-K, as applicable, by reference from the section entitled “Delinquent Section 16(a) Reports” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. Information required to be disclosed by this Item about our Board, the Audit Committee of our Board, our audit committee financial expert, our Code of Ethics and Business Conduct Standards, and other corporate governance matters is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Corporate Governance” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. The text of our Code of Ethics and Business Conduct Standards, which applies to our directors and employees (including our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions), is posted in the “Corporate Governance” section of the Investors section of our website, www.admabiologics.com. A copy of the Code of Ethics and Business Conduct Standards can be obtained free of charge on our website. We intend to disclose on our website any amendments to, or waivers from, our Code of Ethics and Business Conduct Standards that are required to be disclosed pursuant to the rules of the SEC and The Nasdaq Stock Market. The information presented on our website is not a part of this Annual Report on Form 10-K and the reference to our website is intended to be an inactive textual reference only. Item 11. Executive Compensation Information required to be disclosed by this Item is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Executive Officers and Director and Officer Compensation” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information required to be disclosed by this Item is incorporated into this Annual Report on Form 10-K by reference from the sections entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required to be disclosed by this Item is incorporated in this Annual Report on Form 10-K by reference from the section entitled “Certain Relationships and Related Transactions, and Director Independence” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. Item 14. Principal Accounting Fees and Services The information required to be disclosed by this Item is incorporated into this Annual Report on Form 10-K by reference from the section entitled “Audit and Other Fees” contained in our definitive proxy statement for our 2021 annual meeting of stockholders, which we intend to file within 120 days of the end of our fiscal year ended December 31, 2020. 67 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules Financial Statement Schedules (a) The following documents are filed as part of this Annual Report on Form 10-K: (1) Consolidated Financial Statements. Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-3 Consolidated Statements of Operations for the years ended December 31, 2020 and 2019 F-4 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020 and 2019 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019 F-6 Notes to Consolidated Financial Statements F-7 (2) Financial Statement Schedules. Required information is included in the footnotes to the financial statements. (3) Exhibits. See Exhibit Index immediately following the financial statements to this Annual Report on Form 10-K. Item 16. Form 10-K Summary None. 68 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ADMA Biologics, Inc. Date: March 25, 2021 By: /s/ Adam S. Grossman Name: Adam S. Grossman Title: President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title Date /s/ Adam S. Grossman Adam S. Grossman President and Chief Executive Officer (Principal Executive Officer) and Director March 25, 2021 /s/ Brian Lenz Brian Lenz Executive Vice President and Chief Financial Officer March 25, 2021 (Principal Financial Officer and Principal Accounting Officer) /s/ Steven A. Elms Steven A. Elms Chairman of the Board of Directors March 25, 2021 /s/ Dr. Jerrold B. Grossman Dr. Jerrold B. Grossman Vice Chairman of the Board of Directors March 25, 2021 /s/ Martha J. Demski Martha J. Demski Director March 25, 2021 /s/ Bryant E. Fong Bryant E. Fong Director March 25, 2021 /s/ Lawrence P. Guiheen Lawrence P. Guiheen Director March 25, 2021 69 ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-3 Consolidated Statements of Operations for the years ended December 31, 2020 and 2019 F-4 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020 and 2019 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019 F-6 Notes to Consolidated Financial Statements F-7 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of ADMA Biologics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ADMA Biologics, Inc. and subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As further discussed in Note 1 to the accompanying consolidated financial statements, management believes that the Company will continue to incur net losses and negative net cash flows from operating activities through the drug commercialization process. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Description of the matter As of December 31, 2020, the Company’s inventory totaled $81,535,599. As described in the notes to the consolidated financial statements, the valuation of inventory involves significant estimates relating to the capitalization of labor and overhead costs to the work in process and finished goods inventories as well as lower of cost or net realizable value considerations. Given the importance of inventory to the Company’s operations, the various components, locations and complexity of the computations and the significance of the inventory value, auditing the inventory involved a relatively high degree of auditor judgement and high extent of our testing as well as the involvement of more senior members of the engagement team to design the appropriate responsive audit procedures and to supervise, execute and review the test results. How we addressed the matter in our audit We obtained an understanding of and tested the Company’s process to estimate labor and overhead in the inventory to devise our responsive audit approach. We performed substantive test procedures relating to the inventory valuation which included verifying significant components of the valuation to supporting records, assessing the application of direct labor costs included in the valuation and assessing the appropriateness of the components of the indirect overhead pools as well as the application of such pool to the valuation. We verified the completeness and accuracy of the data used in management’s valuation as well as the mathematical accuracy of the direct labor and overhead applications. To assess management’s assertion that inventory is carried at the lower of cost or net realizable value, we tested subsequent net sales proceeds. /s/ CohnReznick LLP We have served as the Company’s auditor since 2008. Holmdel, New Jersey March 25, 2021 F-2 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2020 and 2019 December 31, December 31, 2020 2019 ASSETS Current assets: Cash and cash equivalents $ 55,921,152 $ 26,752,135 Accounts receivable, net 13,237,290 3,469,919 Inventories 81,535,599 53,064,734 Prepaid expenses and other current assets 3,046,466 2,533,593 Total current assets 153,740,507 85,820,381 Property and equipment, net 41,593,090 31,741,317 Intangible assets, net 2,444,121 3,159,474 Goodwill 3,529,509 3,529,509 Right to use assets 4,259,191 1,245,029 Deposits and other assets 2,106,976 1,595,015 TOTAL ASSETS $ 207,673,394 $ 127,090,725 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 11,073,708 $ 9,174,591 Accrued expenses and other current liabilities 8,365,143 4,481,395 Current portion of deferred revenue 142,834 142,834 Current portion of lease obligations 365,682 229,073 Total current liabilities 19,947,367 14,027,893 Senior notes payable, net of discount 92,968,866 68,291,163 Deferred revenue, net of current portion 2,118,698 2,261,532 Subordinated note payable, net of discount - 14,908,053 Lease obligations, net of current portion 4,334,151 1,302,361 Other non-current liabilities 54,886 106,574 TOTAL LIABILITIES 119,423,968 100,897,576 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding - - Common Stock - voting, $ 0.0001 par value, 150,000,000 shares authorized, 104,902,888 and 59,318,355 shares issued and outstanding 10,490 5,932 Additional paid-in capital 428,704,039 290,903,772 Accumulated deficit ( 340,465,103 ) ( 264,716,555 ) TOTAL STOCKHOLDERS' EQUITY 88,249,426 26,193,149 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 207,673,394 $ 127,090,725 The accompanying notes are an integral part of these consolidated financial statements. F-3 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2020 and 2019 Years Ended December 31, 2020 2019 REVENUES: Product revenue $ 42,076,949 $ 29,206,249 License revenue 142,834 142,834 Total revenues 42,219,783 29,349,083 OPERATING EXPENSES: Cost of product revenue (exclusive of amortization expense shown below) 61,291,426 39,504,238 Research and development 5,907,013 2,343,848 Plasma center operating expenses 4,170,051 2,169,629 Amortization of intangible assets 715,353 844,938 Selling, general and administrative 35,050,817 25,910,757 Total operating expenses 107,134,660 70,773,410 LOSS FROM OPERATIONS ( 64,914,877 ) ( 41,424,327 ) OTHER INCOME (EXPENSE): Interest income 288,126 800,785 Interest expense ( 11,985,066 ) ( 8,993,379 ) Gain (loss) on extinguishment of debt 991,797 ( 9,962,495 ) Gain on transfer of plasma center assets - 11,527,421 Other expense ( 128,528 ) ( 227,322 ) Other expense, net ( 10,833,671 ) ( 6,854,990 ) NET LOSS $ ( 75,748,548 ) $ ( 48,279,317 ) BASIC AND DILUTED LOSS PER COMMON SHARE $ ( 0.88 ) $ ( 0.89 ) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic and Diluted 86,145,052 54,348,136 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Years Ended December 31, 2020 and 2019 Common Stock Additional Total Voting Paid-in Accumulated Stockholders' Shares Amount Capital Deficit Equity Balance at December 31, 2018 46,353,068 $ 4,635 $ 236,203,041 $ ( 216,437,238 ) $ 19,770,438 Stock-based compensation - - 2,650,777 - 2,650,777 Warrants issued in connection with note payable - - 3,579,115 - 3,579,115 Issuance of common stock, net of offering expenses 12,937,500 1,294 48,395,794 - 48,397,088 Stock options exercised 27,787 3 75,045 - 75,048 Net loss - - - ( 48,279,317 ) ( 48,279,317 ) Balance at December 31, 2019 59,318,355 5,932 290,903,772 ( 264,716,555 ) 26,193,149 Stock-based compensation - - 2,855,122 - 2,855,122 Warrants issued in connection with note payable - - 3,740,980 - 3,740,980 Vesting of Restricted Stock Units 15,000 2 ( 2 ) - - Issuance of common stock, net of offering expenses 45,562,907 4,555 131,190,736 - 131,195,291 Stock options exercised 6,626 1 13,431 - 13,432 Net loss - - - ( 75,748,548 ) ( 75,748,548 ) Balance at December 31, 2020 104,902,888 $ 10,490 $ 428,704,039 $ ( 340,465,103 ) $ 88,249,426 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2020 and 2019 Years Ended December 31, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 75,748,548 ) $ ( 48,279,317 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,942,292 3,258,148 Loss on disposal of fixed assets 81,697 207,071 Stock-based compensation 2,855,122 2,650,777 Amortization of debt discount 1,782,428 1,180,348 (Gain) loss on extinguishment of debt ( 991,797 ) 9,962,495 Gain on transfer of plasma center assets - (11,527,421 ) Amortization of license revenue ( 142,834 ) ( 142,834 ) Changes in operating assets and liabilities: Accounts receivable ( 9,767,371 ) ( 2,077,478 ) Inventories ( 28,470,864 ) ( 34,650,132 ) Prepaid expenses and other current assets ( 512,873 ) ( 773,174 ) Deposits and other assets ( 196,749 ) 107,974 Accounts payable 1,899,115 3,274,200 Accrued expenses 3,401,815 806,353 Other current and non-current liabilities ( 134,391 ) ( 190,514 ) Net cash used in operating activities ( 102,002,958 ) ( 76,193,504 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 12,726,680 ) ( 3,811,838 ) Proceeds from the sale of property and equipment 2,000 - Net cash used in investing activities ( 12,724,680 ) ( 3,811,838 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on notes payable ( 13,950,000 ) ( 30,000,000 ) Payment of end of end of term fee - ( 2,760,000 ) Proceeds from issuance of common stock, net of offering expenses 131,195,291 48,397,088 Proceeds from the exercise of stock options 13,432 75,048 Payment of debt refinancing fees ( 830,000 ) ( 6,499,867 ) Proceeds from issuance of note payable 27,500,000 72,500,000 Payment of debt issuance costs - ( 1,679,661 ) Payments on finance lease obligations ( 32,068 ) ( 29,983 ) Net cash provided by financing activities 143,896,655 80,002,625 Net increase (decrease) in cash and cash equivalents 29,169,017 ( 2,717 ) Cash and cash equivalents, including restricted cash - beginning of year 26,752,135 26,754,852 Cash and cash equivalents - end of year $ 55,921,152 $ 26,752,135 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 1. ORGANIZATION AND BUSINESS ADMA Biologics, Inc. (“ADMA” or the “Company”) is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty plasma-derived biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases. The Company’s targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or who may be immune-suppressed for medical reasons. ADMA operates through its wholly-owned subsidiaries ADMA BioManufacturing, LLC (“ADMA BioManufacturing”) and ADMA BioCenters Georgia Inc. (“ADMA BioCenters”). ADMA BioManufacturing was formed in January 2017 to facilitate the acquisition of the Biotest Therapy Business Unit (“BTBU”) from BPC Plasma, Inc. (formerly Biotest Pharmaceuticals Corporation) (“BPC” and, together with Biotest AG, “Biotest”) on June 6, 2017. The acquisition included certain assets (the “Biotest Assets”) of BTBU, which included the FDA-licensed BIVIGAM and Nabi-HB immunoglobulin products, and an FDA-licensed plasma fractionation manufacturing facility located in Boca Raton, FL (the “Boca Facility”) (the “Biotest Transaction”). BTBU had previously been the Company’s third-party contract manufacturer. ADMA BioCenters is the Company’s source plasma collection business with three plasma collection facilities located in the U.S., two of which hold an approved license with the U.S. Food and Drug Administration (the “FDA”) while the other facility’s Biologics License Application (“BLA”) is pending FDA approval. The Company has three FDA-approved products, all of which are currently marketed and commercially available: (i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”), and for which the Company received FDA approval on May 9, 2019 and commenced commercial sales in August 2019; (ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which the Company received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing Hepatitis B surface antigen (“HBsAg”) and other listed exposures to Hepatitis B. In addition to its commercially available immunoglobulin products, the Company provides contract manufacturing and laboratory services for certain clients and generates revenues from the sale of intermediate by-products that result from the immunoglobulin production process. The Company seeks to develop a pipeline of plasma-derived therapeutics, and its products and product candidates are intended to be used by physician specialists focused on caring for immune-compromised patients with or at risk for certain infectious diseases. As of December 31, 2020, the Company had working capital of $ 133.8 million, including $55.9 million of cash and cash equivalents. Based upon the Company’s current projected revenue and expenditures, including capital expenditures and continued implementation of the Company’s commercialization and expansion activities, as well as accessing the available funds under the open market sale agreement for sales of the Company’s common stock as discussed below, the Company’s management currently believes that its cash, cash equivalents, projected revenue and accounts receivable will be sufficient to fund ADMA’s operations, as currently conducted, into the fourth quarter of 2021. In order to have sufficient cash to fund its operations thereafter, the Company anticipates it will need to raise additional capital before the end of the fourth quarter of 2021. These estimates may change based upon several factors, including the success of the Company’s commercial sales of its products, manufacturing ramp-up activities, the acceptability of ADMA’s immune globulin products by physicians, patients or payers and the various financing options that may be available to the Company. In addition, the Company’s end-to-end production cycle from procurement of raw materials to commercial release of finished product can take between seven and 12 months or potentially longer, requiring substantial investments in raw material plasma and other manufacturing materials. The Company currently has no firm commitments for additional financing, and there can be no assurance that the Company will be able to secure additional financing on terms that are acceptable to the Company, or at all. Furthermore, if the Company’s assumptions underlying its estimated expenses and revenues are incorrect, it may have to raise additional capital sooner than currently anticipated. F-7 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Due to numerous risks and uncertainties associated with FDA review, inspections and approvals related to the Company’s products or the labeled indications of such products, ongoing compliance requirements and capacity expansion efforts at the Company’s Boca Facility and future commercialization of the Company’s products, including the Company’s ability to obtain adequate quantities of FDA-approved plasma with proper specifications on acceptable terms for use in the Company’s manufacturing process, as well as the additional uncertainties surrounding the COVID-19 pandemic (see Note 11), the Company is unable to estimate with certainty the amounts of increased capital outlays and operating expenditures required to fund its commercial and development activities. The Company’s current estimates may be subject to change as circumstances regarding its business requirements evolve. Failure to secure any necessary financing in a timely manner and on commercially reasonable terms could have a material adverse effect on the Company’s business plan and financial performance and it could be forced to delay or discontinue its commercialization, product development or clinical activities or delay or discontinue the approval efforts for any of the Company’s products, processes or product candidates. The Company has reported cumulative losses since inception in June 2004 through December 31, 2020 of $340.5 million. As such, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of asset carrying amounts and the classification of liabilities that might be necessary from the outcome of this uncertainty. The Company may decide to raise capital through public or private equity offerings or debt financings, or obtain a bank credit facility or enter into corporate collaboration and licensing arrangements. The sale of additional equity or debt securities, if convertible, could result in dilution to the Company’s existing stockholders and, in such event, the market value of its common stock may decline. The incurrence of additional indebtedness would result in increased fixed obligations and could also result in covenants that would restrict the Company’s operations or other financing alternatives. In addition, the Company is exploring additional contract manufacturing arrangements and other business development opportunities, which may provide additional liquidity to the Company. On August 5, 2020, the Company entered into an open market sale agreement (the “Sale Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which the Company could offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $ 50 million of shares of the Company’s common stock. The Company and Jefferies have since entered into amendments to the Sale Agreement to provide for increases in the aggregate offering amount under the Sale Agreement such that, as of February 3, 2021, the Company may sell shares having an additional aggregate offering price of up to $ 55.4 million under the Sale Agreement (see Notes 9 and 18). Through December 31, 2020, the Company received net proceeds from the sale of its common stock under the Sale Agreement of $ 42.5 million. There can be no assurance that the Company’s approved products will be commercially viable, or that research and development, plant capacity expansion, plasma center build-outs or other capital improvements will be successfully completed or that any product developed in the future will be approved. The Company is subject to risks common to companies in the biotechnology and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements. 2. SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of presentation The accompanying consolidated financial statements include the accounts of ADMA and its wholly-owned subsidiaries, and have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). All intercompany balances have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). During the years ended December 31, 2020 and 2019, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying consolidated statements of operations. In addition, certain prior year balances have been reclassified to conform to the current presentation. Specifically, the Company’s right-to-use assets related to its operating and finance leases are now disclosed separately in the Company’s consolidated balance sheets. Previously, these assets were reflected within Deposits and other assets. F-8 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the realizable value of accounts receivable, valuation of inventory, assumptions used in projecting future liquidity and capital requirements, assumptions used in the fair value of awards granted under the Company’s equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for the Company’s deferred tax assets. Cash and cash equivalents The Company considers all highly-liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company regularly maintains cash and cash equivalents at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit. Although the Company monitors the daily cash balances in its operating accounts and adjusts the balances as appropriate, these balances could be impacted, and there could be a material adverse effect on the Company’s business, if one or more of the financial institutions with which the Company has deposits fails or is subject to other adverse conditions in the financial or credit markets. To date, the Company has not experienced a loss or lack of access to its deposited cash or cash equivalents; however, the Company cannot provide assurance that access to its cash and cash equivalents will not be impacted by adverse conditions in the financial and credit markets in the future. During the year ended December 31, 2019, $ 4.0 million of cash that was held in a reserve account as required by the Company’s then-senior lending agreement and previously classified as restricted cash in the Company’s consolidated balance sheet was returned to the Company upon the retirement of the debt underlying that agreement (see Note 8). Accounts receivable Accounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. The Company extends credit to its customers based upon an evaluation of each customer’s financial condition and credit history. Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis. Based on these evaluations, the Company has concluded that its credit risk is minimal (see Note 17). Inventories Raw materials inventory consists of various materials purchased from suppliers, including normal source plasma, used in the production of the Company’s products. Work-in-process and finished goods inventories (see Note 3) reflect the cost of raw materials as well as costs for direct and indirect labor, primarily salaries, wages and benefits for applicable employees, as well as an allocation of overhead costs related to the Boca Facility including utilities, property taxes, general repairs and maintenance, consumable supplies and depreciation. The allocation of Boca Facility overhead to inventory is generally based upon the estimated square footage of the Boca Facility that is used in the production of the Company’s products relative to the total square footage of the facility. Inventories, including plasma intended for resale and plasma intended for internal use in the Company’s manufacturing, commercialization or research and development activities, are carried at the lower of cost or net realizable value determined by the first-in, first-out method. Net realizable value is generally determined based upon the consideration the Company expects to receive when the inventory is sold, less costs to deliver the inventory to the recipient. The estimates for net realizable value of inventory are based on contractual terms or upon historical experience and certain other assumptions, and the Company believes that such assumptions are reasonable. Inventory is periodically reviewed to ensure that its carrying value does not exceed its net realizable value, and adjustments are recorded to write down such inventory, with a corresponding charge to cost of product revenue, when the carrying value or historical cost exceeds its estimated net realizable value. Due to previous uncertainties surrounding certain prior submissions made to the FDA, all costs related to the production of BIVIGAM and ASCENIV prior to their FDA approval dates of May 9, 2019 and April 1, 2019, respectively, have been charged to cost of product revenue in the accompanying consolidated statements of operations during the period the product was produced. In addition, costs associated with the production of conformance or engineering lots that would not qualify as immediately available for commercial sale are charged to cost of product revenue and not capitalized into inventory. F-9 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Property and equipment Assets comprising property and equipment (see Note 5) are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. Land is not depreciated. The buildings have been assigned a useful life of 30 years. Property and equipment other than land and buildings have useful lives ranging from 3 to 15 years. Leasehold improvements are amortized over the lesser of the lease term or their estimated useful lives. Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired by the Company. Goodwill at December 31, 2020 and 2019 was $3.5 million, all of which is attributable to the Company’s ADMA BioManufacturing business segment. There were no changes to the carrying amount of goodwill during the years ended December 31, 2020 and 2019. Goodwill is not amortized but is assessed for impairment on an annual basis or more frequently if impairment indicators exist. The Company has the option to perform a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill and other intangible assets. If the Company concludes that this is the case, then it must perform a goodwill impairment test by comparing the fair value of the reporting unit to its carrying value. An impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value. The impairment loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company’s impairment analyses as of October 1, 2020 and 2019 did not result in any impairment charges related to goodwill for the years ended December 31, 2020 and 2019. Impairment of long-lived assets The Company assesses the recoverability of its long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate impairment may have occurred. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s carrying value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the years ended December 31, 2020 and 2019, the Company determined that there was no impairment of its long-lived assets. Revenue recognition Revenues for the years ended December 31, 2020 and 2019 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, BIVIGAM, ASCENIV and Nabi-HB, (ii) product revenues from the sale of human plasma collected by the Company’s Plasma Collection Centers business segment, (iii) contract manufacturing and laboratory services revenue, (iv) revenues from the sale of intermediate by-products; and (v) license and other revenues primarily attributable to the out-licensing of ASCENIV to Biotest in 2012 to market and sell this product in Europe and selected countries in North Africa and the Middle East. Biotest has provided the Company with certain services and financial payments in accordance with the related Biotest license agreement and is obligated to pay the Company certain amounts in the future if certain milestones are achieved. Deferred revenue is recognized over the term of the Biotest license. Deferred revenue is amortized into income for a period of approximately 22 years, the term of the Biotest license agreement. F-10 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Product revenue is recognized when the customer is deemed to have control over the product. Control is determined based on when the product is shipped or delivered and title passes to the customer. Revenue is recorded in an amount that reflects the consideration the Company expects to receive in exchange. Revenue from the sale of the Company’s immunoglobulin products is recognized when the product reaches the customer’s destination, and is recorded net of estimated rebates, price protection arrangements and customer incentives, including prompt pay discounts, wholesaler chargebacks and other wholesaler fees. These estimates are based on historical experience and certain other assumptions, and the Company believes that such estimates are reasonable. For revenues associated with contract manufacturing and the sale of intermediates, control transfers to the customer and the performance obligation is satisfied when the customer takes possession of the product from the Boca Facility or from a third-party warehouse that is utilized by the Company. Product revenues from the sale of human plasma collected at the Company’s plasma collection centers are recognized at the time control of the product has been transferred to the customer, which generally occurs at the time of shipment. Product revenues are recognized at the time of delivery if the Company retains control of the product during shipment. Cost of product revenue Cost of product revenue includes costs associated with the manufacture of the Company’s FDA approved products, intermediates and the sale of human source plasma, as well as expenses related to conformance batch production, process development and scientific and technical operations when these operations are attributable to marketed products. When the activities of these operations are attributable to new products in development, the expenses are classified as research and development expenses. Research and development expenses Research and development expenses consist of clinical research organization costs, costs related to clinical trials, post-marketing commitment studies for BIVIGAM and ASCENIV, wages, benefits and stock-based compensation for employees directly related to research and development activities and, prior to April 1, 2019, assay development and testing, storage and transportation costs for high-titer plasma used in the manufacture of ASCENIV. All research and development costs are expensed as incurred. Advertising and marketing expenses Advertising and marketing expense includes cost for promotional materials and trade show expenses for the marketing of the Company’s products and services and are expensed as incurred. Advertising and marketing expenses were $ 1.1 million and $ 1.0 million for the years ended December 31, 2020 and 2019, respectively. Stock-based compensation The Company follows recognized accounting guidance which requires all equity-based payments, including grants of stock options, to be recognized in the statement of operations as compensation expense based on their fair values at the date of grant. Compensation expense related to awards to employees and directors with service-based vesting conditions is recognized on a straight-line basis over the associated vesting period of the award based on the grant date fair value of the award. Stock options granted under the Company’s equity incentive plans generally have a four-year vesting period and a term of 10 years. Pursuant to ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) , the Company has elected not to establish a forfeiture rate, as stock-based compensation expense related to forfeitures of unvested stock options is fully reversed at the time of forfeiture. Income taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or its tax returns. Under this method, deferred tax assets and liabilities are recognized for the temporary differences between the tax bases of assets and liabilities and their respective financial reporting amounts at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company records a valuation allowance on its deferred tax assets if it is more likely than not that the Company will not generate sufficient taxable income to utilize its deferred tax assets (see Note 12). The Company is subject to income tax examinations by major taxing authorities for all tax years since 2016 and for previous periods as it relates to the Company’s net operating loss carryforwards. F-11 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Loss Per Share Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is calculated by dividing net loss attributable to common stockholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period. Potentially dilutive common stock includes the shares of common stock issuable upon the exercise of outstanding stock options and warrants (using the treasury stock method). Potentially dilutive common stock in the diluted net loss per share computation is excluded to the extent that it would be anti-dilutive. No potentially dilutive securities are included in the computation of any diluted per share amounts as the Company reported a net loss for all periods presented. For the years ended December 31, 2020 and 2019, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects: For the Years Ended December 31, 2020 2019 Stock options 6,922,931 5,630,351 Restricted stock units 326,000 - Warrants 4,528,160 2,138,160 11,777,091 7,768,511 Fair value of financial instruments The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments. The debt outstanding under the Company’s senior notes payable (see Note 8) approximates fair value due to the variable interest rate on this debt. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires financial assets to be presented at the net amount expected to be collected, with an allowance for credit losses to be deducted from the amortized cost basis of the financial asset such that the net carrying value of the asset is presented as the amount expected to be collected. Under ASU 2016-13, the entity’s statement of operations is required to reflect the measurement of credit losses for newly recognized financial assets, as well as expected increases or decreases in expected credit losses that have taken place during the period. For public business entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU No. 2016-13 on January 1, 2020, and the adoption of this update did not have a significant impact on the Company’s consolidated financial statements. In July 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) ” (“ASU 2017-11”). ASU 2017-11 changed the classification analysis of certain equity-linked financial instruments (or embedded features within such instruments) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) would no longer be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with ASC 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. In addition, convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features in ASC 470-20, “ Debt—Debt with Conversion and Other Options. ” ASU 2017-11 became effective for the Company on January 1, 2019, and this update did not have a significant impact on the Company’s consolidated financial statements. F-12 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance became effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company adopted ASU 2016-02 on January 1, 2019 using the option to recognize the cumulative-effect adjustment, if any, as of the date of application, which was also January 1, 2019. The Company recognized right-to-use assets of $ 1.4 million and corresponding lease liabilities of approximately $ 1.6 million at the date of adoption (see Note 13). The Company also elected the “package of practical expedients,” which permits the Company to not reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected the short-term lease recognition exemption for all leases that qualify, including the agreement under which the Company occupies certain office space as discussed in Note 10. 3. TRANSFER OF PLASMA CENTER ASSETS As part of the purchase price for the Biotest Transaction (see Note 1), the Company transferred its Marietta, GA and Norcross, GA plasma collection centers to BPC effective January 1, 2019. The Company had estimated the combined fair value of the two facilities to be $ 12.6 million, and the Company recorded an obligation for this amount as of the date of the Biotest Transaction. On January 1, 2019, upon the transfer of the two plasma collection facilities to BPC, the Company recorded a gain in the amount of $ 11.5 million, which reflects the derecognition of the obligation to transfer ownership of the two facilities net of the carrying value of the assets associated with these facilities, primarily property and equipment and inventory, in the amount of $ 1.1 million. 4. INVENTORIES The following table provides the components of inventories: December 31, 2020 December 31, 2019 Raw materials $ 32,044,393 $ 33,381,806 Work-in-process 30,293,288 14,455,665 Finished goods 19,197,918 5,227,263 Total inventories $ 81,535,599 $ 53,064,734 Raw materials includes plasma and other materials expected to be used in the production of BIVIGAM, ASCENIV and Nabi-HB, as there are alternative uses for these materials that provide a probable future benefit or will be consumed in the production of goods expected to be available for sale. All other activities and materials associated with the production of inventories used in research and development activities are expensed as incurred. Work-in-process inventory primarily consists of bulk drug substance and unlabeled filled vials of the Company’s immunoglobulin products. Finished goods inventory is comprised of immunoglobulin product inventory and related intermediates that are available for commercial sale, as well as plasma collected at the Company’s plasma collection center which is expected to be sold to third-party customers. F-13 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 5. PROPERTY AND EQUIPMENT Property and equipment at December 31, 2020 and 2019 is summarized as follows: December 31, 2020 December 31, 2019 Manufacturing and laboratory equipment $ 14,468,874 $ 8,831,817 Office equipment and computer software 3,253,528 1,690,248 Furniture and fixtures 2,389,585 582,088 Construction in process 3,336,557 4,285,915 Leasehold improvements 5,272,490 1,673,084 Land 4,339,441 4,339,441 Buildings and building improvements 17,396,557 16,063,680 50,457,032 37,466,273 Less: Accumulated depreciation ( 8,863,942 ) ( 5,724,956 ) Total property, plant and equipment, net $ 41,593,090 $ 31,741,317 The Company recorded depreciation expense on property and equipment of $ 3.2 million and $ 2.4 million for the years ended December 31, 2020 and 2019, respectively. 6. INTANGIBLE ASSETS Intangible assets at December 31, 2020 and 2019 consist of the following: December 31, 2020 December 31, 2019 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Trademark and other intangible rights related to Nabi-HB $ 4,100,046 $ 2,098,833 $ 2,001,213 $ 4,100,046 $ 1,513,112 $ 2,586,934 Rights to intermediates 907,421 464,513 442,908 907,421 334,881 572,540 Customer contract 1,076,557 1,076,557 - 1,076,557 1,076,557 - $ 6,084,024 $ 3,639,903 $ 2,444,121 $ 6,084,024 $ 2,924,550 $ 3,159,474 Under the previous contract manufacturing agreement between ADMA and BPC, intermediate by-products derived from the manufacture of ASCENIV were property of Biotest. As a result of the Biotest Transaction, ADMA obtained the right to these intermediate products, which are being amortized over a period of seven years. The intangible rights to Nabi-HB are also being amortized over a period of seven years. The customer contract pertains to a contract manufacturing agreement with a third-party customer that the Company assumed upon the consummation of the Biotest Transaction. On December 22, 2017, the Company and the customer entered into an amendment to this contract which reduced the number of batches the Company was committed to supply to the customer, and the Company had fulfilled this obligation to the customer in its entirety as of December 31, 2019, the date of expiration of the contract, as amended. Amortization expense related to the Company’s intangible assets for the years ended December 31, 2020 and 2019 was $0.7 million and $0.8 million, respectively. Estimated aggregate future aggregate amortization expense is expected to be as follows: 2021 $ 715,352 2022 715,352 2023 715,352 2024 298,065 F-14 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 7. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other current liabilities at December 31, 2020 and 2019 are as follows: December 31, 2020 December 31, 2019 Accrued incentives $ 3,210,884 $ 1,899,769 Accrued rebates 2,604,245 978,786 Accrued payroll 734,972 347,091 Accrued distribution fees 828,120 549,356 Accrued testing 779,660 69,415 Other 207,262 636,978 Total accrued expenses and other current liabilities $ 8,365,143 $ 4,481,395 8. NOTES PAYABLE Senior Notes Payable A summary of outstanding senior notes payable is as follows: December 31, 2020 December 31, 2019 Notes payable $ 100,000,000 $ 72,500,000 Less: Debt discount ( 7,031,134 ) ( 4,208,837 ) Senior notes payable $ 92,968,866 $ 68,291,163 On February 11, 2019 (the “Perceptive Closing Date”), the Company and all of its subsidiaries entered into a Credit Agreement and Guaranty (the “Perceptive Credit Agreement”) with Perceptive Credit Holdings II, LP, as the lender and administrative agent (“Perceptive”). The Perceptive Credit Agreement, as amended, provides for a senior secured term loan facility in a principal amount of $ 100.0 million (the “Perceptive Credit Facility”), comprised of (i) a term loan made on the Perceptive Closing Date in the principal amount of $ 45.0 million, as evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche I Note”) in favor of Perceptive on the Perceptive Closing Date (the “Perceptive Tranche I Loan”), (ii) a term loan in the principal amount of $ 27.5 million (the “Perceptive Tranche II Loan”) evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche II Note”) in favor of Perceptive on May 3, 2019, (iii) a term loan in the principal amount of $ 12.5 million evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche III Note”) in favor of Perceptive on March 20, 2020 (the “Perceptive Tranche III Loan”); and (iv) a term loan in the principal amount of $ 15 million evidenced by our issuance of a promissory note in favor of Perceptive on December 8, 2020 (the “Perceptive Tranche IV Loan”, and together with the Perceptive Tranche I Loan, the Perceptive Tranche II Loan and the Perceptive Tranche III Loan, the “Perceptive Loans”). The Perceptive Tranche III Loan is the result of an amendment to the Perceptive Credit Agreement that the Company and Perceptive entered into on May 3, 2019 (the “First Perceptive Amendment”), and the Perceptive Tranche III Loan became available to the Company upon the approval of BIVIGAM on May 9, 2019. The Perceptive Tranche IV Loan is the result of an amendment to the Perceptive Credit Facility entered into on December 8, 2020 (the “Second Perceptive Amendment”), which also extended the maturity date of the Perceptive Credit Facility to March 1, 2024 (the “Maturity Date”), subject to acceleration pursuant to the Perceptive Credit Agreement, including upon an Event of Default (as defined in the Perceptive Credit Agreement). On the Perceptive Closing Date, the Company used $ 30.0 million of the Perceptive Tranche I Loan to terminate and pay in full all of the outstanding obligations under its previously existing credit agreement with Marathon Healthcare Finance Fund, L.P. (“Marathon”) (the “Marathon Credit Facility”). The Company also used proceeds from the Perceptive Tranche I Loan to: (i) pay a deferred facility fee to Marathon in the amount of $ 2.8 million, (ii) pay a prepayment penalty to Marathon in the amount of $ 6.5 million, (iii) pay outstanding accrued interest to Marathon in the amount of $ 0.7 million, and (iv) pay certain fees and expenses incurred in connection with the Perceptive Credit Facility of approximately $ 1.5 million. In addition, Marathon released $ 4.0 million of cash to the Company that was held in a debt service reserve account per the terms of the Marathon Credit Facility. In connection with the First Perceptive Amendment, the Company paid an additional facility fee to Perceptive in the amount of $ 0.1 million on May 3, 2019. In connection with the Second Perceptive Amendment, the Company paid a facility fee to Perceptive in the amount of $ 0.8 million. F-15 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 As a result of the Company’s entering into the Perceptive Credit Agreement and terminating the Marathon Credit Facility, the Company recognized a loss on the extinguishment of debt for the year ended December 31, 2019 in the amount of approximately $10.0 million, comprised of the $ 6.5 million prepayment penalty and the write-off of unamortized debt discount related to the Marathon Credit Facility in the amount of $ 3.5 million. Borrowings under the Perceptive Credit Agreement bear interest at a rate per annum equal to 7.5% plus the greater of (i) one-month LIBOR and (ii) 3.5%; provided, however, that upon, and during the continuance of, an Event of Default, the interest rate will automatically increase by an additional 400 basis points. Accrued interest is payable to Perceptive on the last day of each month during the term of the Perceptive Credit Facility. The rate of interest in effect as of the Perceptive Closing Date and at December 31, 2020 was 11.0% . On the Maturity Date, the Company will pay Perceptive the entire outstanding principal amount underlying the Perceptive Loans and any accrued and unpaid interest thereon. There are no scheduled principal payments on the Perceptive Loans prior to the Maturity Date. The Company may prepay outstanding principal on the Perceptive Loans at any time and from time to time upon three business days’ prior written notice, subject to the payment to Perceptive of (A) any accrued but unpaid interest on the prepaid principal amount plus (B) a redemption premium amount equal to (i) 5.0% of the prepaid principal amount, if prepaid on or prior to December 31, 2021, (ii) 2.0% of the prepaid principal amount, if prepaid after December 31, 2021 and on or prior to December 31, 2022, (iii) 4.0% of the prepaid principal amount, if prepaid after December 31, 2022 and on or prior to December 31, 2023, and (iv) 5.0% of the prepaid principal amount, if prepaid any time thereafter and prior to the Maturity Date . All of the Company’s obligations under the Perceptive Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible and intangible assets, including intellectual property and all of the equity interests in the Company’s subsidiaries. The Perceptive Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings. The negative covenants restrict or limit the ability of the Company and its subsidiaries to, among other things and subject to certain exceptions contained in the Perceptive Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s or its subsidiaries’ business activities; make certain Investments or Restricted Payments (each as defined in the Perceptive Credit Agreement); change its fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Perceptive Credit Agreement. In addition, the Company must (i) at all times prior to the Maturity Date maintain a minimum cash balance of $3.0 million; and (ii) as of the last day of each fiscal quarter commencing with the fiscal quarter ended June 30, 2019, report revenues for the trailing 12-month period that exceed the amounts set forth in the Perceptive Credit Agreement, which range from $7.0 million for the fiscal quarter ended June 30, 2019 to $55.0 million for the fiscal quarter ending December 31, 2021 . At December 31, 2020, the Company was in compliance with all of the covenants contained in the Perceptive Credit Agreement. As consideration for the Perceptive Credit Agreement, the Company issued to Perceptive a warrant to purchase 1,360,000 shares of the Company’s common stock (the “Perceptive Warrant”) on the Perceptive Closing Date. The Perceptive Warrant has an exercise price equal to $ 3.28 per share, which is equal to the trailing 10-day volume weighted average price (“VWAP”) of the Company’s common stock on the business day immediately prior to the Perceptive Closing Date multiplied by 1.15. The Company valued the Perceptive Warrant at $ 2.7 million as of the Perceptive Closing Date and it has an expiration date of February 11, 2029 . In connection with the First Perceptive Amendment, the Company issued an additional warrant (the “Perceptive Tranche III Warrant”) to purchase 250,000 shares of the Company’s common stock to Perceptive with an exercise price equal to $ 4.64 per share, which represents the trailing 10-day VWAP of the Company’s common stock as of May 2, 2019. The Perceptive Tranche III Warrant was valued by the Company at $ 0.9 million and has an expiration date of May 3, 2029 . As consideration for the Second Perceptive Amendment, the Company issued an additional warrant (the “Perceptive Tranche IV Warrant” and, together with the Perceptive Warrant and the Perceptive Tranche III Warrant, the “Perceptive Warrants”) to purchase 2,390,000 shares of the Company’s common stock to Perceptive with an exercise price of $ 1.94 per share, which is equal to the trailing 10-day VWAP of the Company’s common stock on the business day immediately prior to the date of the Perceptive Second Amendment. The Perceptive Tranche IV Warrant was valued by the Company at $ 3.7 million and has an expiration date of December 8, 2030 . Perceptive has represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act) and the Company issued the Perceptive Warrants in reliance upon an exemption from registration contained in Section 4(2) under the Securities Act. The Perceptive Warrants and the shares of common stock issuable thereunder may not be offered, sold, pledged or otherwise transferred in the U.S. absent registration or an applicable exemption from the registration requirements under the Securities Act. F-16 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 As a result of the fees paid to Perceptive and the value of the Perceptive Warrants, the Company recognized an aggregate discount on the Perceptive Loans in the amount of $ 7.1 million. The Company records debt discount as a reduction to the face amount of the debt, and the debt discount is amortized as interest expense over the life of the debt using the interest method. Based on the fair value of the Perceptive Warrants and the aggregate amount of fees and expenses associated with obtaining the Perceptive Credit Facility, the effective interest rate on the Perceptive Loans as of December 8, 2020 was approximately 13.7 %. Subordinated Note Payable A summary of the outstanding subordinated note payable is as follows: December 31, 2020 December 31, 2019 Subordinated note payable to Biotest $ - $ 15,000,000 Less: Debt discount - ( 91,947 ) Subordinated note payable $ - $ 14,908,053 In connection with the acquisition of the Biotest Assets (see Note 1), ADMA BioManufacturing issued a subordinated note payable to BPC and in connection therewith received cash proceeds of $ 15.0 million. The note carried an interest at a rate of 6.0 % per annum payable semi-annually and was to mature on June 6, 2022 . On July 20, 2018, in connection with the U.S. Government required divestiture of all of BPC’s U.S. assets in connection with the sale of Biotest AG to CREAT Group Corporation, Biotest AG, BPC, ADMA BioManufacturing and the Company entered into an Assignment and Assumption Agreement whereby BPC transferred to Biotest AG all of its obligations, rights, title and interest in the subordinated note and the related loan agreements. On December 8, 2020, the Company retired the subordinated note with the proceeds from the Perceptive Tranche IV Loan. As part of this transaction, the lender agreed to a 7 % discount from the principal, and the obligation under the note was satisfied by a payment by the Company of approximately $ 14.0 million. As a result, the Company recorded a gain on the extinguishment of the note of approximately $ 1.0 million. 9. STOCKHOLDERS’ EQUITY Preferred Stock The Company is currently authorized to issue up to 10 million shares of preferred stock, $ 0.0001 par value per share. There were no shares of preferred stock outstanding at December 31, 2020 and 2019. Common Stock As of December 31, 2020 and 2019, the Company was authorized to issue 150,000,000 shares of its common stock, $ 0.0001 par value per share, and 104,902,888 and 59,318,355 shares of common stock were outstanding as of December 31, 2020 and 2019, respectively. On August 23, 2019, the Company’s stockholders approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation to increase the number of shares of common stock that the Company is authorized to issue from 75,000,000 to 150,000,000 . After giving effect to shares reserved for the issuance of warrants and for awards issued under the Company’s equity incentive plans, 30,655,784 shares of common stock were available for issuance as of December 31, 2020. F-17 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 On August 5, 2020, the Company entered into the Sale Agreement with Jefferies, pursuant to which the Company could offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $ 50 million of shares of the Company’s common stock. On November 5, 2020, the Company and Jefferies amended the Sale Agreement to provide for an increase in the aggregate offering amount under the Sale Agreement such that, as of November 5, 2020, the Company could sell shares having an additional aggregate offering price of up to $ 20 million. For the year ended December 31, 2020, the Company sold 18,537,907 shares of common under the Sale Agreement and received net proceeds of $ 42.5 million. On February 11, 2020, the Company completed an underwritten public offering of 23,500,000 shares of its common stock for gross proceeds of $ 82.3 million. On February 21, 2020, the Company sold an additional 3,525,000 shares pursuant to the underwriters’ exercise of their option to purchase additional shares of the Company’s common stock for additional gross proceeds of $ 12.3 million. The Company received net proceeds, after underwriting discounts and other expenses associated with the offering, of approximately $ 88.7 million. On May 21, 2019, the Company issued 12,937,500 shares of its common stock in an underwritten public offering for gross proceeds of approximately $ 51.8 million. After deducting underwriters’ commissions and other expenses associated with the offering, the Company received net proceeds of $ 48.4 million. During the years ended December 31, 2020 and 2019, the Company issued 6,626 and 27,787 shares, respectively, of common stock in connection with the exercise of stock options that had been granted to employees. Warrants On December 8, 2020, the Company issued the Perceptive Tranche IV Warrant, whereby Perceptive may purchase an aggregate of 2,390,000 shares of common stock at an exercise price $ 1.94 per share (see Note 8). The warrant was valued at $ 3.7 million, using the Black-Scholes option-pricing model assuming an expected term of 10 years, a volatility of 69.3 %, a dividend yield of 0 % and a risk-free interest rate of 0.92 %. On the Perceptive Closing Date, the Company issued the Perceptive Warrant, whereby Perceptive may purchase an aggregate of 1,360,000 shares of common stock at an exercise price of $ 3.28 per share. The Perceptive Warrant became exercisable on the Perceptive Closing Date and was valued at $ 2.7 million. The Perceptive Warrant was valued using the Black-Scholes option-pricing model assuming an expected term of 10 years, a volatility of 61.2 %, a dividend yield of 0 % and a risk-free interest rate of 2.65 %. On May 3, 2019, the Company issued the Perceptive Tranche III Warrant, whereby Perceptive may purchase an aggregate of 250,000 shares of common stock at an exercise price of $ 4.64 per share. The Perceptive Tranche III was exercisable on the date of issuance and was valued at $ 0.9 million. The Perceptive Tranche III Warrant was valued using the Black-Scholes option-pricing model assuming an expected term of 10 years, a volatility of 62.3 %, a dividend yield of 0 % and a risk-free interest rate of 2.54 %. At December 31, 2020, the Company had outstanding warrants to purchase an aggregate of 4,528,160 shares of common stock, with a weighted average exercise price of $ 2.82 per share and expiration dates ranging between June 2022 and December 2030. At December 31, 2019, the Company had outstanding warrants to purchase an aggregate of 2,138,160 shares of common stock, with a weighted average exercise price of $ 3.81 per share and expiration dates ranging between June 2022 and May 2029. Equity Incentive Plans From time to time the Company grants stock options or other equity-based awards under the Company’s 2007 Employee Stock Option Plan (the “2007 Plan”) and the Amended and Restated 2014 Omnibus Incentive Compensation Plan (the “2014 Plan”). The 2014 Plan, as amended, was approved by the Board on March 15, 2017 and by the Company’s stockholders on May 25, 2017. Currently, the maximum number of shares reserved for grant under the 2014 Plan is: (a) 2,334,940 shares, less any shares available as of such date for issuance under the 2007 Plan; plus (b) an annual increase as of the first day of the Company’s fiscal year, beginning in 2018 and occurring each year thereafter through 2022, equal to 4% of the outstanding shares of common stock as of the end of the Company’s immediately preceding fiscal year, or any lesser number of shares determined by the Board; provided, however, that no more than an aggregate of 10 million shares of common stock may be issued pursuant to incentive stock options intended to qualify under Section 422 of the Internal Revenue Code. As of December 31, 2020, an aggregate of 2,664,237 shares were available for issuance under the 2007 Plan and the 2014 Plan. In accordance with the foregoing, on January 1, 2021 the aggregate number of shares available for issuance increased to 6,860,353 . F-18 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 During the years ended December 31, 2020 and 2019, the Company recorded stock-based compensation expense to employees of $ 2.9 million and $ 2.7 million, respectively. The fair value of employee options granted was determined on the date of grant using the Black-Scholes 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 Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the underlying Black-Scholes assumptions can materially affect the fair value estimate. To determine the risk-free interest rate, the Company utilized the U.S. Treasury yield curve in effect at the time of the grant with a term consistent with the expected term of the Company’s awards. The expected term of the options granted is in accordance with Staff Accounting Bulletins 107 and 110, which is based on the average between vesting terms and contractual terms. The expected dividend yield reflects the Company’s current and expected future policy for dividends on the Company’s common stock. For the years ended December 31, 2020 and 2019, the expected stock price volatility for the Company’s stock options was calculated by examining the historical volatility of the Company’s common stock since the stock became publicly traded in the fourth quarter of 2013. The grant date fair values of stock options awarded during the years ended December 31, 2020 and 2019 were determined using the Black-Scholes option-pricing model with the following assumptions: Years Ended December 31, 2020 December 31, 2019 Expected term 5.5 - 6.3 years 5.8 - 6.3 years Volatility 62 - 70 % 54 - 63 % Dividend yield 0.0 0.0 Risk-free interest rate 0.33 - 1.68 % 1.36 - 2.92 % F-19 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 The 2007 Plan and 2014 Plan provide for the Board or a Committee of the Board (the “Committee”) to grant awards to optionees and to determine the exercise price, vesting term, expiration date and all other terms and conditions of the awards, including acceleration of the vesting of an award at any time. All options granted under the 2007 Plan and 2014 Plan are intended to be incentive stock options (“ISOs”), unless specified by the Committee to be non-qualified options (“NQOs”) as defined by the Internal Revenue Code. ISOs and NQOs may be granted to employees, consultants or Board members at an option price not less than the fair market value of the common stock subject to the stock option agreement. The following table summarizes information about stock options outstanding as of December 31, 2020 and 2019: Shares Weighted Average Exercise Price Options outstanding, vested and expected to vest at December 31, 2018 4,342,231 $ 5.16 Forfeited ( 169,993 ) $ 3.97 Expired ( 19,983 ) $ 4.60 Granted 1,508,000 $ 3.49 Exercised ( 29,904 ) $ 2.84 Options outstanding, vested and expected to vest at December 31, 2019 5,630,351 $ 4.76 Forfeited ( 141,724 ) $ 3.81 Expired ( 27,482 ) $ 4.26 Granted 1,468,412 $ 2.93 Exercised ( 6,626 ) $ 2.03 Options outstanding, vested and expected to vest at December 31, 2020 6,922,931 $ 4.40 Options exercisable 4,544,902 $ 5.01 The weighted average remaining contractual term of stock options outstanding and expected to vest at December 31, 2020 is 6.5 years. The weighted average remaining contractual term of stock options exercisable at December 31, 2020 is 5.4 years. The following table summarizes additional information regarding outstanding and exercisable options under the stock option plans at December 31, 2020: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Options Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value Options Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value $2.04 - $3.20 1,328,220 9.2 $ 2.80 $ - 140,474 8.3 $ 2.95 $ - $3.22 - $4.83 3,925,951 6.9 $ 3.62 - 2,787,632 6.6 $ 3.64 - $4.84 - $7.26 520,607 5.5 $ 5.51 - 468,643 5.2 $ 5.48 - $7.56 - $10.80 1,148,153 2.2 $ 8.39 - 1,148,153 2.2 $ 8.39 - 6,922,931 6.5 $ 4.40 $ - 4,544,902 5.4 $ 5.00 $ - During the year ended December 31, 2020, the Company granted Restricted Stock Units (“RSUs”) to members of the Company’s Board of Directors and to certain management employees of the Company. The total RSUs granted during the year represent an aggregate of 361,000 shares of the Company’s common stock. The RSUs vest semi-annually over a period of one year for directors and annually over a period of four years for employees. Total compensation expense related to unvested RSUs for the year ended December 31, 2020 was $ 0.3 million. A summary of the Company’s unvested RSU activity and related information is as follows: Shares Weighted Average Grant Date Fair Value Balance at December 31, 2019 - $ - Granted 361,000 $ 2.82 Vested ( 15,000 ) $ 2.92 Forfeited ( 20,000 ) $ 2.83 Balance at December 31, 2020 326,000 $ 2.81 F-20 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Aggregate stock-based compensation expense for the years ended December 31, 2020 and 2019 was as follows: 2020 2019 Research and development $ 471,146 $ 360,569 Plasma center operating expenses 33,464 51,340 Selling, general and administrative 2,107,577 2,047,025 Cost of product revenue 242,935 191,843 Total stock-based compensation expense $ 2,855,122 $ 2,650,777 As of December 31, 2020, the total unrecognized compensation expense related to unvested options was $ 4.0 million, which is expected to be recognized over a weighted-average period of 2.3 years. As of December 31, 2020, the Company had $ 0.7 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 3.2 years. 10. RELATED PARTY TRANSACTIONS The Company leases an office building and equipment from Areth, LLC (“Areth”) pursuant to an agreement for services effective as of January 1, 2016, as amended from time to time. Effective October 1, 2017, monthly rent on this facility was reduced to $ 10,000 . On September 27, 2018, the agreement was amended to extend the term of the agreement through September 30, 2019. On November 7, 2019, an additional amendment was entered into between Areth and the Company to extend the term of this agreement through September 30, 2020, and to provide for automatic one-year renewals unless ADMA gives written notice of termination to Areth 60 days prior to the end of the term. The Company did not provide such written notice to Areth as of July 31, 2020. Rent expense for the years ended December 31, 2020 and 2019 amounted to $ 0.1 million. Areth is a company controlled by Dr. Jerrold B. Grossman, the Vice Chairman of the Company’s Board of Directors, and Adam S. Grossman, the Company’s President and Chief Executive Officer. The Company also reimburses Areth for office, warehousing and building related (common area) expenses, equipment and certain other operational expenses, which were not material to the consolidated financial statements for the years ended December 31, 2020 and 2019. During the year ended December 31, 2020, the Company purchased certain specialized medical equipment and services related to the Company’s plasma collection centers, as well as personal protective equipment, from GenesisBPS and its affiliates (“Genesis”) in the amount of $ 0.1 million. Genesis is owned by Dr. Grossman and Adam Grossman. Purchases from Genesis for the year ended December 31, 2019 were not material to the Company’s consolidated financial statements. See Note 8 for a discussion of the Company’s credit facility and related transactions with Perceptive, a holder of more than 10 % of the Company’s common stock. 11. COMMITMENTS AND CONTINGENCIES General Legal Matters From time to time, the Company is or may become subject to certain legal proceedings and claims arising in connection with the normal course of its business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s liquidity, results of operations or financial condition. COVID-19 Pandemic The Company continues to monitor the ongoing developments related to the COVID-19 pandemic and its impacts to the Company’s supply-chain operations, including procurement of raw materials and packaging materials, a portion of which are sourced internationally, and the testing of finished drug product that is required prior to its availability for commercial sale. A substantial portion of such testing has historically been performed by contract laboratories outside the United States. F-21 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 The Company has experienced some delays with final drug product release testing by third-party vendors. In response to these delays, the Company added additional release testing laboratories to its FDA-approved consortium listed in its drug approval documents which the Company believes has adequately addressed this issue. In addition, due to previous state and local “shelter-in-place” orders, the Company has experienced lower than normal donor collections at its FDA approved plasma collection centers. The Company was also subject to delays in shipments of source plasma from its contracted third-party suppliers, as well as delays in deliveries for personal protective equipment, reagents and other non-plasma raw materials and supplies used in the manufacture of its products. The COVID-19 pandemic has also impacted, to a certain degree, the Company’s customer engagement initiatives, whereby ADMA’s sales and medical affairs field personnel have faced difficulties communicating directly with physicians and other healthcare professionals, as well as the cancellation or postponement of a number of key scientific and medical meetings, further limiting the Company’s ability to communicate with potential customers. The Company has implemented a comprehensive suite of virtual engagement initiatives, however, clinician engagement has been reduced due to rapidly evolving COVID-19 priorities at U.S. medical centers. Notwithstanding the foregoing, the COVID-19 pandemic to date has not had a material impact on the Company’s financial condition or results of operations, and the Company does not believe that its production operations at the Boca Facility, the Company’s contract fill/finishers or its plasma collection facilities have been significantly impacted by the COVID-19 pandemic. As a result, the Company does not anticipate and has not experienced any material impairments with respect to any of its long-lived assets, including the Company’s property and equipment, goodwill or intangible assets. Although the COVID-19 pandemic has not, to date, materially adversely impacted the Company’s capital and financial resources, because the Company is unable to determine the ultimate severity or duration of the pandemic or its long-term effects on, among other things, the global, national or local economies, the capital and credit markets or the Company’s workforce, customers or our suppliers, at this time the Company is unable to predict whether COVID-19 will have a material adverse impact on the Company’s business, financial condition, liquidity and results of operations. Vendor and Licensor Commitments Pursuant to the terms of a plasma purchase agreement with BPC dated as of November 17, 2011 (the “2011 Plasma Purchase Agreement”), the Company agreed to purchase from BPC an annual minimum volume of source plasma containing antibodies to RSV to be used in the manufacture of ASCENIV. The Company must purchase a to-be-determined and agreed upon annual minimum volume from BPC, but may also collect high-titer RSV plasma from up to five wholly-owned ADMA plasma collection facilities. During 2015, the Company and BPC amended the 2011 Plasma Purchase Agreement to allow the Company the ability to collect its raw material RSV high-titer plasma from other third-party collection organizations, thus allowing the Company to expand its reach for raw material supply as it executes its commercialization plans for ASCENIV. Unless terminated earlier, the 2011 Plasma Purchase Agreement expires in June 2027, after which it may be renewed for two additional five-year periods if agreed to by the parties. As part of the closing of the Biotest Transaction, the parties amended the 2011 Plasma Purchase Agreement to extend the initial term through the ten-year anniversary of the closing date of the Biotest Transaction. On December 10, 2018, BPC assigned its rights and obligations under the 2011 Plasma Purchase Agreement to Grifols Worldwide Operations Limited (“Grifols”) as its successor-in-interest, effective January 1, 2019. On January 1, 2019, Grifols and the Company entered into an additional amendment to the 2011 Plasma Purchase Agreement for the purchase of source plasma containing antibodies to RSV from Grifols (see Note 17). Pursuant to this amendment, until January 1, 2022, the Company may purchase RSV plasma from Grifols from the two plasma collection centers that were transferred to BPC on January 1, 2019 (see Note 3) at a price equal to cost plus five percent (5%) (without any additional increase due to inflation). F-22 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 On June 6, 2017, the Company and BPC entered into a Plasma Supply Agreement pursuant to which BPC supplies, on an exclusive basis subject to certain exceptions, to ADMA BioManufacturing an annual minimum volume of hyperimmune plasma that contain antibodies to the Hepatitis B virus for the manufacture of Nabi-HB. The Plasma Supply Agreement has a 10 -year term. On July 19, 2018, the Company and BPC entered into an amendment to the Plasma Supply Agreement to provide, among other things, that in the event BPC elects not to supply in excess of ADMA BioManufacturing’s specified amount of Hepatitis B plasma and ADMA BioManufacturing is unable to secure Hepatitis B plasma from a third party at a price that is within a low double- digit percentage of the price that ADMA BioManufacturing pays to BPC, then BPC shall reimburse ADMA BioManufacturing for the difference in price ADMA BioManufacturing incurs. On December 10, 2018, BPC assigned its rights and obligations under the Plasma Supply Agreement to Grifols, effective January 1, 2019. On June 6, 2017, the Company and BPC entered into a Plasma Purchase Agreement (the “2017 Plasma Purchase Agreement”), pursuant to which ADMA BioManufacturing purchases normal source plasma (“NSP”) from BPC at agreed upon annual quantities and prices. The 2017 Plasma Purchase Agreement has an initial term of five years after which the 2017 Plasma Purchase Agreement may be renewed for additional two terms of two years each upon the mutual written consent of the parties. On July 19, 2018, the Company and BPC entered into an amendment to the 2017 Plasma Purchase Agreement to, among other things, provide agreed upon amounts of normal source plasma to be supplied by BPC to ADMA BioManufacturing in calendar year 2019 at a specified price per liter, provided that ADMA BioManufacturing delivers a valid purchase order to BPC. Additionally, pursuant to the amendment to the 2017 Plasma Purchase Agreement, BPC agreed that, for calendar years 2020 and 2021, it shall supply no less than a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts, provided that such requested NSP amounts are within an agreed range, at a price per liter to be mutually determined. Furthermore, pursuant to the amendment to the 2017 Plasma Purchase Agreement, in the event BPC fails to supply ADMA BioManufacturing with at least a high double-digit percentage of ADMA BioManufacturing’s requested NSP amounts, BPC shall promptly reimburse ADMA BioManufacturing the difference in price ADMA BioManufacturing incurs due to BPC’s election not to supply NSP to ADMA BioManufacturing in such amounts as requested. On December 10, 2018, BPC assigned its rights and obligations under the Plasma Purchase Agreement to Grifols, effective January 1, 2019. Post-marketing commitments In connection with the approval of the BLA for BIVIGAM, on December 19, 2012 Biotest committed to perform two additional post-marketing studies, a pediatric study to evaluate the efficacy and safety of BIVIGAM in children and adolescents, and a post-authorization safety study to further assess the potential risk of hypotension and hepatic and renal impairment in BIVIGAM-treated patients with primary humoral immunodeficiency. These studies are still pending completion. ADMA has assumed the remaining obligations, and the costs of the studies will be expensed as incurred as research and development expenses. The Company currently expects both studies to be completed by June of 2023. In connection with the FDA’s approval of ASCENIV on April 1, 2019, the Company is required to perform a pediatric study to evaluate the safety and efficacy of ASCENIV in children and adolescents. This study is required to be completed by June of 2023. Employment contracts The Company has entered into employment agreements with its executive management team consisting of its President and Chief Executive Officer, its Executive Vice President, Chief Medical Officer and Chief Scientific Officer and its Executive Vice President and Chief Financial Officer. Other commitments In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of December 31, 2020. The Company does not anticipate recognizing any significant losses relating to these arrangements. F-23 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 12. INCOME TAXES A reconciliation of income taxes at the U.S. Federal statutory rate to the benefit for income taxes is as follows: Year Ended December 31, 2020 2019 Benefit at U.S. federal statutory rate $ ( 15,907,195 ) $ ( 10,138,657 ) State taxes - deferred ( 3,797,393 ) ( 2,010,517 ) Increase in valuation allowance 19,535,265 11,790,031 Research and development credits ( 246,989 ) ( 115,086 ) Other 416,312 474,229 Benefit for income taxes $ - $ - A summary of the Company’s deferred tax assets is as follows: Year Ended December 31, 2020 2019 Federal and state net operating loss carryforwards $ 59,114,928 $ 42,496,374 Federal and state research credits 921,577 630,516 Interest expense limitation carryforwards 2,911,508 - Transaction costs 1,080,041 1,174,733 Deferred revenue 563,956 603,535 Accrued expenses and other 2,397,513 2,433,142 Total gross deferred tax assets 66,989,523 47,338,300 Less: valuation allowance for deferred tax assets ( 66,989,523 ) ( 47,338,300 ) Net deferred tax assets $ - $ - As of December 31, 2020, the Company had federal and state (post-apportioned basis) net operating losses (“NOLs”) of $ 239.8 million and $ 172.6 million, respectively, as well as federal research and development tax credit carryforwards of approximately $ 0.9 million. Approximately $ 115.8 million and $ 90.0 million of the foregoing federal and state NOLs, respectively, will expire at various dates from 2027 through 2040, if not limited by triggering events prior to such time. Under the provisions of the Internal Revenue Code, changes in ownership of the Company, in certain circumstances, would limit the amount of federal NOLs that can be utilized annually in the future to offset taxable income. In particular, Section 382 of the Internal Revenue Code imposes limitations on an entity’s ability to use NOLs upon certain changes in ownership. If the Company is limited in its ability to use its NOLs in future years in which it has taxable income, then the Company will pay more taxes than if it were otherwise able to fully utilize its NOLs. The Company may experience ownership changes in the future as a result of subsequent shifts in ownership of the Company’s capital stock that the Company cannot predict or control that could result in further limitations being placed on the Company’s ability to utilize its federal NOLs. As of December 31, 2020, the Company performed a preliminary analysis of limitations imposed by Section 382 of the Internal Revenue Code and determined no ownership changes occurred in the current year which would cause additional limitation on the use of the NOLs. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. When determining the amount of net deferred tax assets that are more likely than not to be realized, the Company assesses all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income, exclusive of reversing taxable temporary differences, to outweigh objective negative evidence of recent financial reporting losses. Based on these criteria and the relative weighting of both the positive and negative evidence available, management continues to maintain a full valuation allowance against its net deferred tax assets. F-24 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. The amount of the liability for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. Components of the liability are classified as either a current or a long-term liability in the accompanying consolidated balance sheets based on when the Company expects each of the items to be settled. The Company does not have any unrecognized tax benefits as of December 31, 2020 and 2019, and does not anticipate a significant change in unrecognized tax benefits during the next 12 months . 13. LEASE OBLIGATIONS The Company leases certain properties and equipment for its ADMA BioCenters subsidiary and certain equipment for its ADMA BioManufacturing subsidiary, which leases provide the right to use the underlying assets and require lease payments through the respective lease terms which expire at various dates through 2031. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other leases are recorded on the balance sheet with assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. Right-to-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of the lease payments is determined using the Company’s incremental borrowing rate as of the date of application of ASU 2016-02, or the lease commencement date. For the lease liabilities recognized upon the application of ASU 2016-02, the Company used a discount rate of 13 % to determine the present value of its lease obligations. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is reflected in Plasma center operating expenses and Selling, general and administrative expenses. Aggregate lease expense and cash paid for the Company’s operating leases for the year ended December 31, 2020 was $ 0.7 million and $ 0.5 million, respectively. For the year ended December 31, 2019 aggregate lease expense and cash paid on these leases was $ 0.6 million. In connection with the adoption of ASU 2016-02 on January 1, 2019 (see Note 2), the Company recognized right-to-use assets of $ 1.4 million and lease liabilities of approximately $ 1.6 million. Including a finance lease the Company entered into in June 2018, the Company has aggregate lease liabilities of $ 4.7 million and $ 1.5 million as of December 31, 2020 and 2019, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers. The Company’s operating leases have a weighted average remaining term of 8.7 years. Scheduled payments under the Company’s lease obligations are as follows: Year ended December 31, 2021 $ 954,133 2022 1,031,213 2023 1,009,159 2024 871,532 2025 866,475 Thereafter 3,168,953 Total payments 7,901,465 Less: imputed interest ( 3,201,632 ) Current portion ( 365,682 ) Balance at December 31, 2020 $ 4,334,151 During the year ended December 31, 2020, the Company entered into an additional property lease where the Company intends to construct a new plasma collection facility. As of December 31, 2020, the Company had not taken possession of the property pertaining to this lease, which has a lease commencement date of February 1, 2021. With the exception of an advance deposit and an initial months’ rent totaling approximately $34,000, no payments were made under this lease during the year ended December 31, 2020. The initial term of the first lease is for 133 months, with monthly rental payments varying between approximately $13,000 and $17,000, including common area maintenance charges. F-25 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 14. SEGMENTS The Company is engaged in the manufacture, marketing and development of specialty plasma-derived biologics. The Company’s ADMA BioManufacturing segment reflects the Company’s immune globulin manufacturing and development operations in Florida, acquired on June 6, 2017. The Plasma Collection Centers segment consists of three plasma collection facilities, two of which hold an approved license with the FDA (and of which one facility has received approvals from the Korean Ministry of Food and Drug Safety as well as FDA approval to implement a Hepatitis B immunization program) and a third for which FDA approval is pending as of December 31, 2020, and one FDA-licensed source plasma collection facility for the year ended December 31, 2019. The Corporate segment includes general and administrative overhead expenses. The Company defines its segments as those business units whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to analyze performance and allocate resources. The Company’s CODM is its President and Chief Executive Officer. Summarized financial information concerning reportable segments is shown in the following tables: Year Ended December 31, 2020 ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 36,673,287 $ 5,403,662 $ 142,834 $ 42,219,783 Cost of product revenue 55,908,696 5,382,730 - 61,291,426 Loss from operations ( 46,904,634 ) ( 4,410,890 ) ( 13,599,353 ) ( 64,914,877 ) Interest and other expense, net ( 984,017 ) ( 7,388 ) ( 10,834,063 ) ( 11,825,468 ) Gain on extinguishment of debt - - 991,797 991,797 Net loss ( 47,888,651 ) ( 4,418,278 ) ( 23,441,619 ) ( 75,748,548 ) Capital expenditures 7,579,437 5,147,243 - 12,726,680 Depreciation and amortization expense 3,341,506 591,593 9,193 3,942,292 Total assets 140,908,957 13,102,008 53,662,429 207,673,394 Year Ended December 31, 2019 ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 22,176,699 $ 7,029,550 $ 142,834 $ 29,349,083 Cost of product revenue 33,306,858 6,197,380 - 39,504,238 Loss from operations ( 29,360,522 ) ( 1,337,459 ) ( 10,726,346 ) ( 41,424,327 ) Interest and other expense, net ( 1,091,993 ) 13,521 ( 7,341,444 ) ( 8,419,916 ) Gain on transfer of plasma center assets - 11,527,421 - 11,527,421 Loss on extinguishment of debt - - ( 9,962,495 ) ( 9,962,495 ) Net (loss) income ( 30,452,515 ) 10,203,483 ( 28,030,285 ) ( 48,279,317 ) Capital expenditures 3,772,742 39,096 - 3,811,838 Depreciation and amortization expense 2,789,498 455,412 13,238 3,258,148 Total assets 100,461,050 3,967,860 22,661,815 127,090,725 F-26 Table of Contents ADMA BIOLOGICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 15. OTHER EMPLOYEE BENEFITS The Company sponsors a 401(k) savings plan. Under the plan, employees may make contributions which are eligible for a Company discretionary percentage contribution as defined in the plan and determined by the Board of Directors. The Company recognized $ 0.9 million and $ 0.7 million of related compensation expense for the years ended December 31, 2020 and 2019, respectively. 16. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Supplemental cash flow information for the years ended December 31, 2020 and 2019 is as follows: 2020 2019 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 10,267,632 $ 8,112,231 Noncash Financing and Investing Activities: Equipment acquired reflected in accounts payable and accrued liabilities $ 973,958 $ 514,904 Right-to-use assets in exchange for lease obligations $ 3,329,374 $ 1,421,669 Warrants issued in connection with notes payable $ 3,740,980 $ 3,579,115 17. CONCENTRATIONS Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. At December 31, 2020, three customers accounted for approximately 92 % of the Company’s consolidated accounts receivable. At December 31, 2019, two customers accounted for 89 % of the Company’s total accounts receivable. For the year ended December 31, 2020, three customers represented an aggregate of 82 % of the Company’s consolidated revenues. For the year ended December 31, 2019, three customers totaled 70 % of the Company’s consolidated revenues. The Company purchases substantially all of its raw material plasma from Grifols. For the year ended December 31, 2020, plasma purchases from Grifols were approximately $ 25.0 million, or 68 % of the Company’s total inventory purchases. For the year ended December 31, 2019, plasma purchases from Grifols totaled approximately $ 28.6 million, representing approximately 82 % of the Company’s total inventory purchases. 18. SUBSEQUENT EVENTS Issuance of Common Stock On February 3, 2021, the Company amended the Sale Agreement with Jefferies (see Note 1) to increase the aggregate offering amount under the Sale Agreement to allow the Company to sell shares having an additional aggregate offering price of up to $ 35.4 million. Between January 1, 2021 and March 16, 2021, the Company sold an additional 16,311,084 shares of its common stock under the Sale Agreement and received net proceeds in the amount of $ 38.3 million, which leaves a remaining gross balance that can be raised under the Sale Agreement of $ 22.7 million. F-27 Table of Contents EXHIBIT INDEX Exhibit No. Description 2.1 Master Purchase and Sale Agreement, dated as of January 21, 2017, by and among Biotest Pharmaceuticals Corporation, ADMA BioManufacturing, LLC, ADMA Biologics, Inc., Biotest AG and Biotest US Corporation (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 23, 2017). 3.1 Second Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 23, 2019). 3.2 Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 7, 2016). 3.3 Certificate of Designation of Series A Junior Participating Preferred Stock of ADMA Biologics, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 16, 2020). 4.1 Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to Amendment No. 1 to the Company’s Current Report on Form 8-K/A, filed with the SEC on March 29, 2012). 4.2 Warrant Agreement, dated December 21, 2012, issued by the Company to Hercules Technology Growth Capital, Inc. (incorporated herein by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1, filed with the SEC on February 11, 2013). 4.3 Form of Warrant Agreement, dated May 13, 2016, issued by the Company to Oxford Finance LLC (incorporated herein by reference to Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2016). 4.4 Warrant to Purchase Stock, dated October 10, 2017, issued by the Company to Marathon Healthcare Finance Fund, L.P. (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on October 11, 2017). 4.5 Warrant to Purchase Stock, dated February 11, 2019, issued by the Company to Perceptive Credit Holdings II, LP (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2019). 4.6 Warrant to Purchase Stock, dated May 3, 2019, issued by the Company to Perceptive Credit Holdings II, LP (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2019). 4.7* Warrant to Purchase Stock, dated December 8, 2020, issued by the Company to Perceptive Credit Holdings II, LP. 4.8 Note, dated February 11, 2019, issued by the Company to Perceptive Credit Holdings II, LP (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2019). 4.9 Note, dated May 3, 2019, issued by the Company to Perceptive Credit Holdings II, LP (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 3, 2019). 4.10 Note, dated December 8, 2020, issued by the Company to Perceptive Credit Holdings II, L.P. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 9, 2020). 4.11* Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934. 4.12 Rights Agreement, dated as of December 16, 2020, by and between ADMA Biologics, Inc. and Continental Stock Transfer and Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 16, 2020). 10.1† 2007 Employee Stock Option Plan, as amended by Amendment No. 3 (incorporated herein by reference to Exhibit A to the Information Statement on Schedule 14C, filed with the SEC on October 29, 2012). Table of Contents 10.2† Amended and Restated ADMA Biologics, Inc. 2014 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-8, filed with the SEC on August 18, 2017). 10.3† Amended and Restated Employment Agreement, dated January 29, 2019, by and between ADMA Biologics, Inc. and Adam Grossman (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2019). 10.4† Amended and Restated Employment Agreement, dated January 29, 2019, by and between ADMA Biologics, Inc. and Brian Lenz (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2019). 10.5† Amended and Restated Employment Agreement, dated January 29, 2019, by and between ADMA Biologics, Inc. and James Mond, M.D., Ph.D. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on January 29, 2019). 10.6+ Plasma Purchase Agreement, dated as of November 17, 2011, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc., as amended by First Amendment to Plasma Purchase Agreement, dated as of December 1, 2011, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.9 to Amendment No. 3 to the Company’s Current Report on Form 8-K/A, filed with the SEC on June 22, 2012). 10.6.1+ Second Amendment to Plasma Purchase Agreement, dated as of December 18, 2015, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.3.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 23, 2016). 10.6.2 Third Amendment to Plasma Purchase Agreement, dated as of April 8, 2016, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.3.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2016). 10.6.3 Fourth Amendment to Plasma Purchase Agreement, dated as of June 6, 2017, by and between Biotest Pharmaceuticals Corporation and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.6.4+ Fifth Amendment to Plasma Purchase Agreement, dated as of January 1, 2019, by and between Grifols Worldwide Operations Limited (as successor-in-interest to Biotest Pharmaceuticals Corporation) and ADMA Biologics, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 2, 2019). 10.7+ Plasma Supply Agreement, dated as of June 6, 2017, by and between ADMA BioManufacturing, LLC and Biotest Pharmaceuticals Corporation (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.7.1+ Amendment #1 to the Plasma Supply Agreement, dated as of July 19, 2018, by and between Biotest Pharmaceuticals Corporation and ADMA BioManufacturing, LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 10, 2018). 10.8+ Plasma Purchase Agreement, dated as of June 6, 2017, by and between ADMA BioManufacturing, LLC and Biotest Pharmaceuticals Corporation (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.8.1+ Amendment to Plasma Purchase Agreement, dated as of July 19, 2018, by and between Biotest Pharmaceuticals Corporation and ADMA BioManufacturing, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 10, 2018). Table of Contents 10.9 Amended and Restated Agreement for Services, effective as of January 1, 2016, as amended, by and between ADMA Biologics, LLC and Areth LLC (incorporated herein by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 12, 2016). 10.9.1 Amendment 3 to the Amended and Restated Agreement for Services, effective as of November 7, 2019, by and between ADMA Biologics, LLC and Areth LLC. (incorporated herein by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K filed on March 12, 2020). 10.10 Lease, effective as of February 17, 2017, by and between Home Center Properties, LLC and ADMA BioCenters Georgia Inc. (incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2017). 10.11 Purchase Agreement, dated as of June 6, 2017, by and among the Company, Biotest Pharmaceuticals Corporation and ADMA BioCenters Georgia, Inc. (incorporated herein by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.12 Agreement to Transfer Land, dated as of July 20, 2018, by and among Biotest Real Estate Corp., Biotest AG, Biotest Pharmaceuticals Corporation, ADMA BioManufacturing, LLC and the Company (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on July 24, 2018). 10.13 Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2012). 10.15 Assignment and Assumption Agreement (ADMA Loan), dated as of July 20, 2018, by and among Biotest AG, Biotest Pharmaceuticals Corporation, ADMA BioManufacturing, LLC and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 24, 2018). 10.16 Credit Agreement and Guaranty, dated as of February 11, 2019, by and among the Company, ADMA Plasma Biologics, Inc., ADMA BioCenters Georgia Inc., ADMA BioManufacturing, LLC, and Perceptive Credit Holdings II, LP. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2019). 10.17 Amendment No. 1 to Credit Agreement and Guaranty, dated as of May 3, 2019, by and among the Company, ADMA Plasma Biologics, Inc., ADMA BioCenters Georgia Inc., ADMA BioManufacturing, LLC and Perceptive Credit Holdings II, LP (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2019). 10.18 Amendment No. 2 to the Credit Agreement and Guaranty, dated December 8, 2020, by and among the Company, ADMA Plasma Biologics, Inc., ADMA BioCenters Georgia Inc., ADMA BioManufacturing, LLC and Perceptive Credit Holdings II, LP. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 9, 2020). 10.19 Security Agreement, dated as of February 11, 2019, by and among the Company, ADMA Plasma Biologics, Inc., ADMA Bio Centers Georgia Inc., ADMA BioManufacturing, LLC, and Perceptive Credit Holdings II, LP. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 12, 2019). 10.20+ License Agreement, effective as of December 31, 2012, by and between ADMA Biologics, Inc. and Biotest AG (incorporated herein by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1, filed with the SEC on February 11, 2013). 10.20.1 First Amendment to License Agreement, dated as of June 6, 2017, by and between the Company and Biotest AG (incorporated herein by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.21+ Manufacturing Agreement, dated as of September 30, 2011, by and between ADMA BioManufacturing, LLC (as successor-in-interest to Biotest Pharmaceuticals Corporation) and Sanofi Pasteur S.A. (incorporated herein by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 29, 2018). 10.21.1+ Amendment #2 to the Manufacturing Agreement, effective as of August 1, 2016, by and between ADMA BioManufacturing, LLC (as successor-in-interest to Biotest Pharmaceuticals Corporation) and Sanofi Pasteur S.A. (incorporated herein by reference to Exhibit 10.24.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 29, 2018). Table of Contents 10.21.2+ Amendment #3 to the Manufacturing Agreement, effective as of December 21, 2017, by and between ADMA BioManufacturing, LLC and Sanofi Pasteur S.A. (incorporated herein by reference to Exhibit 10.24.2 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 29, 2018). 10.22 Stockholders Agreement, dated as of June 6, 2017, by and between the Company and Biotest Pharmaceuticals Corporation (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 12, 2017). 10.23+ Transition Services Agreement, dated as of June 6, 2017, by and between ADMA BioManufacturing, LLC and Biotest Pharmaceuticals Corporation (incorporated herein by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2017). 10.23.1++ Amendment #1 to Transition Services Agreement, dated as of August 29, 2019, by and between ADMA BioManufacturing, LLC and Biotest Pharmaceuticals Corporation (incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K, filed on September 5, 2019). 10.24+ Transition Services Agreement, dated as of January 1, 2019, by and between the Company and Biotest Pharmaceuticals Corporation. (incorporated herein by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 13, 2019). 10.25 Share Transfer, Amendment and Release Agreement, dated as of May 14, 2018, by and among the Company, ADMA BioManufacturing, LLC, ADMA BioCenters Georgia Inc., Biotest Pharmaceuticals Corporation, Biotest AG, The Biotest Divestiture Trust and Biotest US Corporation (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 10, 2018). 10.26 Open Market Sale Agreement SM , dated August 5, 2020, by and between ADMA Biologics, Inc. and Jefferies LLC (incorporated by reference to Exhibit 1.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 5, 2020). 10.26.1 Amendment to Open Market Sale Agreement SM , dated November 5, 2020, by and between ADMA Biologics, Inc. and Jefferies LLC (incorporated by reference to Exhibit 1.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 5, 2020). 10.26.2 Amendment No. 2 to the Open Market Sale Agreement SM by and between ADMA Biologics, Inc., and Jefferies LLC (incorporated by reference to Exhibit 1.1. to the Company’s Current Report on Form 8-K filed on February 3, 2021). 21.1* Subsidiaries of the Company. 23.1* Consent of CohnReznick LLP. 31.1* Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101* The following materials from ADMA Biologics, Inc. Form 10-K for the year ended December 31, 2020, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets at December 31, 2020 and December 31, 2019, (ii) Consolidated Statements of Operations for the years ended December 31, 2020 and 2019, (iii) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020 and 2019, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019; and (v) Notes to Consolidated Financial Statements. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). + Confidential treatment has been granted with respect as to certain portions of this exhibit. Such portions have been redacted and submitted separately to the SEC. ++ Portions of this exhibit and the schedules thereto have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. * Filed herewith. ** Furnished herewith. † Management compensatory plan, contract or arrangement.