|12 Months Ended|
Dec. 31, 2018
|Business Combinations [Abstract]|
On June 6, 2017, ADMA completed the acquisition of the Biotest Assets from BPC. As a result of the Biotest Transaction, the Company acquired Nabi-HB, BIVIGAM, the Boca Facility and certain other assets of BTBU. The acquisition of the Biotest Assets expanded the Company’s product offering with two FDA-approved products while providing direct control over the manufacturing and regulatory processes impacting the Company’s RI-002 product candidate, including remediation of the Warning Letter as well as certain other remediation matters affecting the Boca Facility. Pursuant to the Biotest Transaction, the Company issued to BPC 4,295,580 voting shares of its common stock and 8,591,160 shares of non-voting common stock (the “NV Biotest Shares”). The Company also transferred ownership of two of its plasma centers to BPC on January 1, 2019 as additional consideration, which are reflected as non-current assets in the accompanying consolidated balance sheets at December 31, 2018 and December 31, 2017 in the amount of $1.2 million and $1.5 million, respectively.
The purchase price was calculated as follows:
The following table summarizes the allocation of the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values:
The Company engaged various third party valuation specialists to determine the fair value of the land and buildings, property and equipment, right to intermediates, customer contract and Nabi-HB intangible assets, as well as the assets held for sale. Goodwill is being deducted for tax purposes.
Assets held for sale reflects certain manufacturing equipment acquired in the transaction that will not be utilized in the manufacture or development of any of the Company’s current products or product candidates, and the Company’s plans as of the date of acquisition was to complete the sale of these assets within one year from the date of the Biotest Transaction. These sales efforts were unsuccessful and at December 31, 2017, the Company recorded an impairment charge for the full carrying value of these assets in the amount of $0.8 million.
As a result of the foregoing transaction, BPC became a principal stockholder and Biotest became a related party of the Company (see Note 9). Therefore, all of the Company’s transactions with Biotest between June 6, 2017 and December 31, 2018, including product and license revenues attributable to Biotest, were related party transactions. The results from BTBU’s operations are included in the Company’s consolidated financial statements from the date of acquisition. For the year ended December 31, 2017, the Company incurred a total of approximately $3.9 million in transaction closing costs, which were expensed as incurred as selling, general and administrative expenses in the consolidated statement of operations.
Concurrent with the closing of the Biotest Transaction, the Company received $27.5 million in cash from Biotest, comprised of $12.5 million in cash from BPC and a $15.0 million loan from Biotest evidenced by a 6% subordinated note payable to BPC, which was subsequently assigned to Biotest AG on July 20, 2018, with a maturity of 5 years (see Note 7). In addition, BPC committed to participate in any future equity offering or private placement undertaken by the Company in an amount equal to up to $12.5 million on a pro-rata basis. The entire $12.5 million commitment was invested in the follow-on public offering of the Company’s common stock, which closed on November 13, 2017 (see Note 8).
The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2017. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition been consummated as of that time or that may result in the future.
On May 14, 2018, the Company, ADMA BioManufacturing and ADMA Bio Centers entered into a Share Transfer, Amendment and Release Agreement with BPC, Biotest AG, Biotest US Corporation and The Biotest Divestiture Trust (the “Biotest Trust”) (the “Biotest Transfer Agreement”) whereby BPC transferred to the Company, for no cash consideration, the NV Biotest Shares. Immediately upon transfer of the NV Biotest Shares to the Company, the shares were retired and are no longer available for issuance. The retired NV Biotest Shares comprised approximately 19% of the total outstanding common stock of the Company as of May 14, 2018, and approximately 67% of the total shares issued to BPC in the Biotest Transaction. In exchange for the transfer and retirement of the NV Biotest Shares, the Company (i) granted Biotest and its successors and assigns a release from all potential past, present and future indemnity claims arising under the Master Purchase and Sale Agreement, dated as of January 21, 2017, which governs the Biotest Transaction, and (ii) relinquished its rights to, under certain circumstances, repurchase the two FDA-approved plasma collection centers which were transferred to BPC on January 1, 2019. In addition, pursuant to the Biotest Transfer Agreement, BPC waived and terminated its rights to name a director and an observer to the Company’s Board of Directors (the “Board”). As BPC has made public statements regarding 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, pursuant to the Biotest Transfer Agreement, BPC transferred its remaining 10,109,534 shares of the Company’s common stock to the Biotest Trust on July 24, 2018, and the Biotest Trust is bound by all obligations of and has all of the remaining rights of BPC under that certain Stockholders Agreement dated as of June 6, 2017, by and between the Company and BPC, as amended by the Biotest Transfer Agreement. Furthermore, subject to the terms contained in the Biotest Transfer Agreement, for a 90-day period following BPC’s transfer of the remaining shares of ADMA common stock to the Biotest Trust, the Biotest Trust granted the Company a right of first negotiation for the purchase of the remaining shares of common stock held by the Biotest Trust, which right expired on October 22, 2018.
The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef