UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2023
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________ to ________
Commission file number 001-36728
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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(201 ) 478-5552
(Registrant’s Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 4, 2023, there were 224,906,426 shares of the issuer’s common stock
outstanding.
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
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PART I FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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1
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2
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3
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4
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5
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Item 2.
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22
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Item 3.
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36
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Item 4.
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37
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38
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Item 1.
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38
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Item 1A.
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38
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Item 2.
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68
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Item 3.
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68
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Item 4.
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68
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Item 5.
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68
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Item 6.
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68
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69
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This Quarterly Report on Form 10-Q includes our trademarks, trade names and service marks, such as “ASCENIV™,”
“Nabi-HB®” and “BIVIGAM®,” which are protected under applicable intellectual property laws and are the property of ADMA Biologics, Inc., or its subsidiaries. Solely for convenience, trademarks, trade names and service marks
referred to in this report may appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or
the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to
imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
Special Note Regarding Forward-Looking Statements
Some of the information in this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These statements include, among others, statements about:
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our ability to manufacture BIVIGAM and ASCENIV on a commercial scale and further commercialize these products as a result of their approval by the U.S. Food and
Drug Administration (the “FDA”) in 2019;
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our plans to develop, manufacture, market, launch and expand our commercial infrastructure and commercialize our current and future products and the success of such
efforts;
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the safety, efficacy and expected timing of and our ability to obtain and maintain regulatory approvals for our current products and product candidates, and the
labeling or nature of any such approvals;
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the achievement of or expected timing, progress and results of clinical development, clinical trials and potential regulatory approvals for our product candidates;
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our dependence upon our third-party customers and vendors and their compliance with applicable regulatory requirements;
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our belief that we have addressed the delays experienced with final drug product Current Good Manufacturing Practices (“cGMP”) release testing by our third-party
vendors by adding additional release testing laboratories to our FDA-approved consortium listed in our drug approval documents;
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our ability to obtain adequate quantities of FDA-approved plasma with proper specifications;
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our plans to increase our supplies of source plasma, which include plasma collection center expansion, our ability to obtain and maintain regulatory compliance and
receive FDA approvals of new plasma collection centers and reliance on third-party supply agreements as well as any extensions to such agreements;
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the potential indications for our products and product candidates;
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potential investigational new product applications;
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the acceptability of any of our products, including BIVIGAM, ASCENIV and Nabi-HB, for any purpose, including FDA-approved indications, by physicians, patients or
payers;
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our plans to evaluate the clinical and regulatory paths to grow the ASCENIV franchise through expanded FDA-approved uses;
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Federal, state and local regulatory and business review processes and timing by such governmental and regulatory agencies of our business and regulatory
submissions;
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concurrence by the FDA with our conclusions concerning our products and product candidates;
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the comparability of results of our hyperimmune and immune globulin (“IG”) products to other comparably run hyperimmune and immune globulin clinical trials;
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the potential for ASCENIV and BIVIGAM to provide meaningful clinical improvement for patients living with Primary Humoral Immunodeficiency (“PI”), also known as
Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of Immunity, or other immune deficiencies or any other condition for which the products may be prescribed or evaluated;
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our ability to market and promote Nabi-HB in a highly competitive environment with increasing competition from other antiviral therapies and to generate meaningful
revenues from this product;
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our intellectual property position and the defense thereof, including our expectations regarding the scope of patent protection with respect to ASCENIV or other
future pipeline product candidates;
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our manufacturing capabilities, third-party contractor capabilities and vertical integration strategy;
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our plans related to the expansion and efficiencies of our manufacturing capacity, yield improvements, supply-chain robustness, in-house fill-finish capabilities,
distribution and other collaborative agreements and the success of such endeavors;
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our estimates regarding revenues, expenses, capital requirements, timing to profitability and positive cash flows and the need for and availability of additional
financing;
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possible or likely reimbursement levels for our currently marketed products;
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estimates regarding market size, projected growth and sales of our existing products as well as our expectations of market acceptance of ASCENIV and BIVIGAM;
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effects of the coronavirus COVID-19 pandemic and other potential pandemics on our business, financial condition, liquidity and results of operations, and our
ability to continue operations in the same manner as previously conducted prior to the macroeconomic effects of the COVID-19 pandemic and other potential pandemics; and
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future domestic and global economic conditions including, but not limited to, supply chain constraints, inflationary pressures or performance.
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These statements may be found under the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of this Quarterly Report on Form 10-Q. Forward-looking statements may be identified by the use of terms such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,”
“potential,” “predicts,” or “should” or the negative thereof or other variations thereof or comparable terminology. Our actual results could differ materially from those contained in the forward-looking statements due to the factors described in the
sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and in this Quarterly Report on Form 10-Q
for the quarter ended June 30, 2023. Any forward-looking statement included or incorporated by reference in this Quarterly Report on Form 10-Q reflects our current views with respect to future events and is subject to these and other risks,
uncertainties and assumptions related to our operations, industry and future growth. These forward-looking statements speak only as of the dates such statements are made and we undertake no obligation to publicly update any forward-looking statements
or to publicly announce revisions to any of the forward-looking statements, unless otherwise required by the federal securities laws.
PART I
FINANCIAL INFORMATION
| Item 1. |
Financial Statements.
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ADMA BIOLOGICS, INC. AND SUBSIDIARIES
| June 30, | December 31, | |||||||
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2023
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2022
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|||||||
| ASSETS |
(Unaudited)
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Current assets:
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Cash and cash equivalents
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$
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$
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Accounts receivable, net
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Inventories
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Prepaid expenses and other current assets
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Total current assets
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Property and equipment, net
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Intangible assets, net
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Goodwill
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Right to use assets
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Deposits and other assets
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TOTAL ASSETS
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$
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$
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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$
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Accrued expenses and other current liabilities
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Current portion of deferred revenue
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Current portion of lease obligations
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Total current liabilities
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Senior notes payable, net of discount
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Deferred revenue, net of current portion
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| End of term fee |
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Lease obligations, net of current portion
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Other non-current liabilities
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TOTAL LIABILITIES
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COMMITMENTS AND CONTINGENCIES
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STOCKHOLDERS’ EQUITY
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Preferred Stock, $
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Common Stock - voting, $
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Additional paid-in capital
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Accumulated deficit
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(
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)
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(
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)
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TOTAL STOCKHOLDERS’ EQUITY
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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$
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The accompanying notes are an integral part of these condensed consolidated financial statements.
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
(Unaudited)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2023
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2022
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2023
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2022
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REVENUES
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$
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$
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$
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$
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| Cost of product revenue | ||||||||||||||||
| Gross profit |
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OPERATING EXPENSES:
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Research and development
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Plasma center operating expenses
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Amortization of intangible assets
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Selling, general and administrative
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Total operating expenses
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LOSS FROM OPERATIONS
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(
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)
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(
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)
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(
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)
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(
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)
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||||||||
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OTHER INCOME (EXPENSE):
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Interest income
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Interest expense
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(
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(
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(
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(
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||||||||
| Loss on extinguishment of debt | ( |
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Other expense
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(
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)
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(
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)
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(
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)
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(
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)
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Other expense, net
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(
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)
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(
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)
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(
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(
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||||||||
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NET LOSS
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$
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(
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)
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$
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(
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)
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$
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(
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)
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$
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(
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)
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||||
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BASIC AND DILUTED LOSS PER COMMON SHARE
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$
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(
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)
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$
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(
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)
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$
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(
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)
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$
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(
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)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
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Basic and Diluted
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The accompanying notes are an integral part of these condensed consolidated financial statements.
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN
For the Three and Six Months Ended June 30, 2023
| Additional | Total | |||||||||||||||||||
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Common Stock
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Paid-in
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Accumulated
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Stockholders’
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|||||||||||||||||
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Shares
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Amount
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Capital
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Deficit
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Equity
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||||||||||||||||
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Balance at December 31, 2022
|
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$
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$
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$
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(
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)
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$
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Stock-based compensation
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-
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Vesting of Restricted Stock Units, net of shares withheld for taxes
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(
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(
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| Exercise of stock options |
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Net loss
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-
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(
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)
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(
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)
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|||||||||||||
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Balance at March 31, 2023
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|
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(
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)
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||||||||||||||
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Stock-based compensation
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-
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|||||||||||||||
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Vesting of Restricted Stock Units, net of shares withheld for taxes
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( |
) | ( |
) | ||||||||||||||||
| Warrants issued in connection with note payable |
- |
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| Cashless exercise of warrants |
( |
) | ||||||||||||||||||
| Exercise of stock options |
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Net loss
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-
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(
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)
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(
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)
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|||||||||||||
| Balance at June 30, 2023 | $ | $ | $ | ( |
) | $ | ||||||||||||||
For the Three and Six Months Ended June 30, 2022
| Additional | Total | |||||||||||||||||||
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Common Stock
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Paid-in
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Accumulated
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Stockholders’
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|||||||||||||||||
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Shares
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Amount
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Capital
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Deficit
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Equity
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||||||||||||||||
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Balance at December 31, 2021
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$
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$
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$
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(
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)
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$
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||||||||||
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Warrants issued in connection with notes payable
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-
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||||||||||||||||
| Stock-based compensation |
- | |||||||||||||||||||
| Vesting of Restricted Stock Units, net of shares withheld for taxes and retired | ( |
) | ( |
) | ||||||||||||||||
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Net loss
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- | ( |
) | ( |
) | |||||||||||||||
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Balance at March 31, 2022
|
|
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(
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)
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||||||||||||||
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Stock-based compensation
|
-
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|||||||||||||||
| Vesting of Restricted Stock Units, net of shares withheld for taxes and retired |
||||||||||||||||||||
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Net loss
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-
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(
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)
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(
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)
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|||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | ( |
) | $ | ||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
(Unaudited)
|
Six Months Ended June 30,
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2023
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2022
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CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||
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Net loss
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$ | ( |
) |
$
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(
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)
|
||
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation and amortization
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Loss on disposal of fixed assets
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| Interest paid in kind | ||||||||
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Stock-based compensation
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Amortization of debt discount
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Loss on extinguishment of debt
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Amortization of license revenue
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(
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)
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(
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)
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Changes in operating assets and liabilities:
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||||||||
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Accounts receivable
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(
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)
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|||||
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Inventories
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(
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)
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|||||
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Prepaid expenses and other current assets
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(
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)
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(
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)
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||||
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Deposits and other assets
|
(
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)
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|
|||||
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Accounts payable
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(
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)
|
(
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)
|
||||
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Accrued expenses
|
|
(
|
)
|
|||||
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Other current and non-current liabilities
|
(
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)
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(
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)
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||||
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Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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||||||||
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Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
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Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
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Principal payments on notes payable
|
( |
) | ||||||
|
Payment of debt refinancing fees
|
|
(
|
)
|
|||||
|
Proceeds from issuance of note payable
|
||||||||
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Taxes paid on vested Restricted Stock Units
|
(
|
)
|
(
|
)
|
||||
|
Payments on finance lease obligations
|
(
|
)
|
(
|
)
|
||||
| Proceeds from the exercise of stock options | ||||||||
|
Payment of deferred financing fees
|
( |
) | ||||||
|
Net cash (used in) provided by financing activities
|
(
|
)
|
|
|||||
|
Net (decrease) increase in cash and cash equivalents
|
(
|
)
|
|
|||||
|
Cash and cash equivalents - beginning of period
|
|
|
||||||
|
Cash and cash equivalents - end of period
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
| 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 of BTBU, including the U.S. Food and Drug Administration (“FDA”)-licensed BIVIGAM and Nabi-HB immunoglobulin products, and an FDA-licensed plasma
fractionation manufacturing facility located in Boca Raton, FL (the “Boca Facility”) (the “Biotest Transaction”). BTBU had previously been the Company’s third-party contract manufacturer. ADMA BioCenters is the Company’s source plasma
collection business with ten plasma collection facilities
located throughout the U.S., nine of which hold an approved license with the FDA.
The Company has three FDA-approved products, all of which are currently marketed and commercially available: (i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”)
product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of Immunity, and for which the Company received FDA approval on May 9, 2019 and commenced
commercial sales in August 2019; (ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which the Company received FDA approval on April 1, 2019 and commenced first
commercial sales in October 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing Hepatitis B surface antigen (“HBsAg”) and other listed exposures to Hepatitis
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 June 30, 2023, the Company had working capital of $224.3 million, including $62.5 million of cash
and cash equivalents. Based upon the Company’s current projected revenue and expenditures, including capital expenditures and continued implementation of the Company’s commercialization and expansion activities, the Company’s management
currently believes that its cash, cash equivalents, projected revenue and accounts receivable will be sufficient to fund ADMA’s operations, as currently conducted, through the end of the third quarter of 2024, by which time the Company
believes it will have been generating positive cash flow from operations. These estimates may change based upon several factors, including the success of the Company’s commercial efforts with respect to the sale of its products, whether or
not the assumptions underlying the Company’s projected revenues and expenses are correct and the continued acceptability of ADMA’s immune globulin products by physicians, patients or payers. There can be no assurance that the Company’s
approved products will be commercially viable, or that plant capacity expansion or other capital improvements will be successfully completed or that any product developed in the future will be approved. The Company is subject to risks common
to companies in the biologics, biotechnology and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations,
dependence on key personnel, inflationary pressures, supply chain constraints, protection of proprietary technology and compliance with FDA and other governmental regulations and approval requirements.
ADMA
continues to evaluate a variety of strategic alternatives. While the exploration of value-creating opportunities remains a top corporate priority for the Company, ADMA has terminated its financial advisory agreement with Morgan Stanley.
5
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States
of America (“U.S. GAAP”) for interim financial information. 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”).
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto as of and
for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2023. The accompanying consolidated balance sheet as of December 31,
2022 was derived from the audited financial statements as of and for the year ended December 31, 2022. These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8
of Regulation S-X, and therefore omit or condense certain footnotes and other information normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP. All intercompany balances and transactions have
been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and
assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of June 30, 2023, its results of operations and changes in stockholders’ equity for the three and six months ended
June 30, 2023 and its cash flows for the six months ended June 30, 2023 and 2022.
During the three and six months ended June 30, 2023 and 2022, comprehensive loss was equal to the net loss
amounts presented for the respective periods in the accompanying condensed consolidated statements of operations. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full fiscal
year.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include
rebates and chargebacks deducted from gross revenues, 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.
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 secured term loan (see Note 7) approximates fair value due to the variable interest rate on this debt.
Accounts Receivable
Accounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts in
the amount of $0.2 million and $0.1
million at June 30, 2023 and December 31, 2022, respectively, which
are recognized in the period the related revenue is recorded. The Company extends credit to its customers based upon an evaluation of each customer’s financial condition and credit history. Evaluations of
the financial condition, payment history and associated credit risk of customers are performed on an ongoing basis. Based on these evaluations, the Company has concluded that its credit risk is minimal. At June 30, 2023, three customers accounted for an aggregate of 94 % of the Company’s total
accounts receivable, and at December 31, 2022, two customers accounted for approximately 92 % of the Company’s total accounts receivable.
6
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Inventories
Raw materials inventory consists of various materials purchased from suppliers, including
normal source plasma and Respiratory Syncytial Virus (“RSV”) 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. 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.
Goodwill
Goodwill represents the excess of purchase price over the fair value of net assets acquired by the Company. Goodwill at
June 30, 2023 and December 31, 2022 was $3.5
Goodwill is not amortized but is assessed for impairment on an annual basis or more frequently if impairment indicators
exist. The Company has the option to perform a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill and other
intangible assets. If the Company concludes that this is the case, then it must perform a goodwill impairment test by comparing the fair value of the reporting unit to its carrying value. An impairment charge is recorded to the extent the
reporting unit’s carrying value exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The Company performs its annual goodwill impairment test as of October 1 of each year. The Company’s annual
goodwill impairment test as of October 1, 2022 did not result in a goodwill impairment charge, and the Company did no
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
three and six months ended June 30, 2023 and 2022, the Company
determined that there was no
7
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenue Recognition
Revenues for the three and six months ended June 30, 2023
and 2022 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, BIVIGAM, ASCENIV and Nabi-HB, (ii) product revenues from the sale of human plasma collected through the
Company’s Plasma Collection Centers business segment, (iii) contract manufacturing and laboratory services revenue, (iv) revenues from the sale of intermediate by-products; and (v) license and other revenues primarily attributable to the
out-licensing of ASCENIV to Biotest in 2012 to market and sell this product in Europe and selected countries in North Africa and the Middle East. Biotest has provided the Company with certain services and financial payments in accordance
with the related Biotest license agreement and is obligated to pay the Company certain amounts in the future if certain milestones are achieved. Deferred revenue is amortized into income over the term of the Biotest license, representing a
period of approximately 22 years.
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.
For the six months ended June 30, 2023, two customers represented an aggregate of 68 % of the Company’s consolidated revenues. For the six months ended June 30, 2022, two customers represented an aggregate of
73 % of the Company’s consolidated revenues.
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.
Loss Per Common Share
Basic loss per common 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 common 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, as well as Restricted Stock Units (“RSUs”). Potentially dilutive common stock is excluded from the diluted loss per common share computation to the extent that it would be
anti-dilutive. As a result, no potentially dilutive securities are included in the computation of any of the accompanying diluted loss per share amounts in the accompanying condensed consolidated financial statements as the Company reported
a net loss for all periods presented. For the six months ended June 30 , 2023 and 2022, the
following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects:
|
For the Six Months Ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Stock options
|
|
|
||||||
|
Restricted Stock Units
|
|
|
||||||
|
Warrants
|
|
|
||||||
|
|
|
|||||||
8
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Stock-Based Compensation
The Company follows recognized accounting guidance which requires all equity-based payments, including grants of stock
options, to be recognized in the statement of operations as compensation expense based on their fair values at the date of grant. Compensation expense related to awards to employees and directors with service-based vesting conditions is
generally recognized on a straight-line basis over the associated vesting period of the award based on the grant date fair value of the award. 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. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2018 and for previous periods as it relates to the Company’s net operating loss carryforwards.
In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by
the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is
greater than 50% likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company
has determined that it has no no
| 3. |
INVENTORIES
|
The following table provides the components of inventories:
|
June 30,
2023
|
December 31,
2022
|
|||||||
|
Raw materials
|
$
|
|
$
|
|
||||
|
Work-in-process
|
|
|
||||||
|
Finished goods
|
|
|
||||||
|
Total inventories
|
$
|
|
$
|
|
||||
Raw materials includes plasma and other materials expected to be used in the production of BIVIGAM, ASCENIV and Nabi-HB.
These materials will be consumed in the production of goods expected to be available for sale or otherwise have alternative uses that provide a probable future benefit.
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 centers that is expected to be sold to third-party customers.
9
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 4. |
INTANGIBLE ASSETS
|
Intangible assets at June 30, 2023 and December 31, 2022 consist of the following:
|
June 30, 2023
|
December 31, 2022
|
|||||||||||||||||||||||
| Accumulated | Accumulated | |||||||||||||||||||||||
|
Cost
|
Amortization
|
Net
|
Cost
|
Amortization
|
Net
|
|||||||||||||||||||
|
Trademark and other intangible rights related to Nabi-HB
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
|
Rights to intermediates
|
|
|
|
|
|
|
||||||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||
All of the Company’s intangible assets were acquired in the
Biotest Transaction. Amortization expense related to these intangible assets was $0.2 0.4
|
Remainder of 2023
|
$
|
|
||
|
2024
|
|
| 5. |
PROPERTY AND EQUIPMENT
|
Property and equipment and related accumulated depreciation are summarized as
follows:
|
June 30, 2023
|
December 31, 2022
|
|||||||
|
Manufacturing and laboratory equipment
|
$
|
|
$
|
|
||||
|
Office equipment and computer software
|
|
|
||||||
|
Furniture and fixtures
|
|
|
||||||
|
Construction in process
|
|
|
||||||
|
Leasehold improvements
|
|
|
||||||
|
Land
|
|
|
||||||
|
Buildings and building improvements
|
|
|
||||||
|
|
|
|||||||
|
Less: Accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
|
Total property, plant and equipment, net
|
$
|
|
$
|
|
||||
Property and equipment 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 were assigned a useful life of 30
years. Property and equipment other than land and buildings have useful lives ranging from to 10 years. Leasehold improvements are amortized over the lesser of the lease term or their estimated useful lives.
The Company recorded depreciation expense on property and equipment for the three
months ended June 30, 2023 and 2022 of $1.9 million and $1.5
million, respectively, and for the six months ended June 30, 2023 and 2022 of $3.8 million and $3.0 million, respectively.
10
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 6. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
Accrued expenses and other current liabilities at June 30, 2023 and December 31, 2022 are as follows:
|
June 30, 2023
|
December 31, 2022
|
|||||||
|
Accrued rebates
|
$
|
|
$
|
|
||||
|
Accrued distribution fees
|
|
|
||||||
|
Accrued incentives
|
|
|
||||||
|
Accrued testing
|
|
|
||||||
|
Accrued payroll and other compensation
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total accrued expenses and other current liabilities
|
$
|
|
$
|
|
||||
| 7. |
DEBT
|
A summary of outstanding senior notes payable is as follows:
|
June 30, 2023
|
December 31, 2022
|
|||||||
|
Notes payable
|
$
|
|
$
|
|
||||
|
Less:
|
||||||||
|
Debt discount
|
(
|
)
|
(
|
)
|
||||
|
Senior notes payable
|
$
|
|
$
|
|
||||
On March 23, 2022 (the “Hayfin Closing Date”), the Company and all of its subsidiaries entered into a Credit and Guaranty Agreement (the “Hayfin Credit Agreement”) with Hayfin
Services LLP (“Hayfin”). The Hayfin Credit Agreement provides for a senior secured term loan facility in a principal amount of up to $175.0
million (the “Hayfin Credit Facility”), composed of (i) a term loan made on the Hayfin Closing Date in the principal amount of $150.0
million (the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount of $25.0 million (the “Hayfin
Delayed Draw Loan” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans”). The obligation of the lenders to make the Hayfin Delayed Draw Loan was to have expired on March 22, 2023 and is subject to the satisfaction of certain conditions, including, but not limited to, the Company’s meeting certain 12-month revenue targets as set
forth in the Hayfin Credit Agreement. The Hayfin Credit Facility has a maturity date of March 23, 2027 (the “Hayfin Maturity
Date”), subject to acceleration pursuant to the Hayfin Credit Agreement, including upon an Event of Default (as defined in the Hayfin Credit Agreement). On March 22, 2023, the Company and Hayfin entered into an amendment to the Hayfin Credit Agreement whereby the lenders’ obligation to
make the Hayfin Delayed Draw Loan was extended to June 30, 2023.
On the Hayfin Closing Date, the Company used $100.0 million of
the Hayfin Closing Date Loan to terminate and pay in full all of the outstanding obligations under the Company’s previously existing credit facility (the “Perceptive Credit Facility”) with Perceptive Credit Holdings II, LP (“Perceptive”).
The Company also used $2.0 million of the Hayfin Closing Date Loan proceeds to pay a redemption premium to Perceptive and used
approximately $1.0 million of the Hayfin Closing Date Loan proceeds to pay certain fees and expenses incurred in connection with
this transaction. In addition, a $1.8 million upfront fee payable to Hayfin was paid “in kind” and was added to the outstanding
principal balance in accordance with the terms of the Hayfin Credit Agreement. In connection with the retirement of the Perceptive Credit Facility and all of the obligations thereunder, the Company recorded a loss on extinguishment of debt
in the amount of $6.7 million, consisting of the write-off of unamortized discount related to the Perceptive indebtedness and the
redemption premium paid to Perceptive.
From the time of the Hayfin Closing Date through May 1, 2023, borrowings under the Hayfin Credit Agreement bore interest, at the Company’s election, at either (a) a base rate
(equal to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate in effect on such day plus 0.50 % and (iii) adjusted Term Secured Overnight Financing Rate (“SOFR”) for a one-month tenor in effect on such day plus 1.00 %), plus an applicable margin of 8.5 %, or (b) adjusted Term SOFR for either a one-month
or three-month tenor, as elected by the Company, and subject to a floor of 1.25 %, plus an applicable margin of 9.5 % (the
“Applicable Margin”); provided, however, that upon, and during the continuance of, an Event of Default, the Applicable Margin increases by an additional 3 % per annum. On the last day of each calendar month or quarter during the term of the Hayfin Credit Facility, the Company pays accrued interest to Hayfin. The rate of interest in effect as of June 30,2023
and December 31, 2022 was 13.7 % and 13.9 %, respectively. The Company is also permitted to pay “in kind” a portion of the interest on the Hayfin Loans for each monthly or quarterly interest period in an amount equal to
2.5 % per annum, which is added to the principal amount of the outstanding debt under the Hayfin Credit Facility. For the six months ending June
30,2023, approximately $2.0 million of interest was paid in kind and added to the balance of the outstanding Hayfin Loans.
11
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On the Hayfin Maturity Date, the Company will pay Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any accrued and unpaid interest thereon, as
well as an exit fee of 1.0 % of the outstanding principal amount being paid. This exit fee is recorded separately as a
non-current liability on the accompanying consolidated balance sheets as of June 30,2023 and December 31,2022. Prior to the Hayfin Maturity Date, there are no scheduled principal payments on the Hayfin Loans.
All of the Company’s obligations under the Hayfin Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible
and intangible assets, including intellectual property and all of the equity interests in the Company’s subsidiaries. The Hayfin Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and
conditions that are customarily required for similar financings. The negative covenants restrict or limit the ability of the Company and its subsidiaries to, among other things and subject to certain exceptions contained in the Hayfin
Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s or its subsidiaries’ business activities; make certain
Investments or Restricted Payments (each as defined in the Hayfin Credit Agreement); change its fiscal year; pay dividends; repay certain other indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that
have the impact of restricting the Company’s ability to make loan repayments under the Hayfin Credit Agreement. In addition, the Company is required (i) at all times prior to the Maturity Date to maintain a minimum cash balance of $6.0 million; and (ii) as of the last day of each fiscal quarter, report IVIG product and related revenues for the trailing 12-month period that
exceed the amounts set forth in the Hayfin Credit Agreement, which range from $75.0 million for the fiscal quarter ended June
30, 2022 to $250.0 million for the fiscal quarter ended December 31, 2026. As of June 30, 2023, the Company was in compliance
with all of the covenants contained in the Hayfin Credit Agreement.
As consideration for the Hayfin Credit Agreement, the Company issued to various entities affiliated with Hayfin, on the Hayfin Closing Date, warrants to purchase an aggregate
of 9,103,047 shares of the Company’s common stock (the “Hayfin Warrants”). The Hayfin Warrants have an exercise price equal to $1.6478 per share, which is equal to the trailing 30 -day
Volume Weighted-average Price of the Company’s common stock on the business day immediately prior to the Hayfin Closing Date. The Hayfin Warrants were valued by the Company at approximately $9.6 million as of the Hayfin Closing Date and have an expiration date of March 23, 2029 .
On May
1, 2023, the Company entered into a second amendment to the Hayfin Credit Agreement (the “Hayfin Second Amendment”) whereby the Applicable Margin for adjusted Term SOFR Loans was reduced from 9.5 % to 8.5 %. The Hayfin Second Amendment also
extended the obligation of the lenders to make the Hayfin Delayed Draw Loan from June 30, 2023 to December 31, 2023.
Under
the terms of the Hayfin Second Amendment, in the event the Company elects to prepay all or any portion of the outstanding principal on the Hayfin Loans, the Company will be subject to an early prepayment fee in the amount equal to (i) 7.0 % of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Hayfin Second Amendment, (ii) 3.0 % of the prepaid principal amount, if prepaid after the first anniversary of the Hayfin Second Amendment and on or prior to the second
anniversary of the Hayfin Second Amendment, or (iii) 1.0 % of the prepaid principal amount, if prepaid after the second
anniversary of the Hayfin Second Amendment and on or prior to the third anniversary of the Hayfin Second Amendment. For any prepayments of principal or payment of principal on the Hayfin Maturity Date, the Company is also required to
pay the exit fee. In addition, the Hayfin Second Amendment provides for a 50 % reduction to the foregoing early prepayment
fees if the Hayfin Loans are prepaid in connection with a change in control of the Company or other strategic transactions as further described in the Hayfin Second Amendment.
In connection with the Hayfin Second Amendment, the Company issued additional warrants to the lenders to purchase 2,391,244
shares of the Company’s common stock at an exercise price of $3.2619 per share (the “Hayfin Second Amendment Warrants”). The Hayfin
Second Amendment Warrants were valued at approximately $5.6 million and have an expiration date of May 1, 2030.
As a result of the upfront fee and exit fee paid or payable to Hayfin, the expenses incurred by the Company in connection with this transaction and the value of the Hayfin
Warrants and Hayfin Second Amendment Warrants, the Company recognized an aggregate discount on the Hayfin Loans in the amount of $19.5
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 Hayfin
Warrants and the aggregate amount of fees and expenses associated with obtaining the Hayfin Credit Facility, the effective interest rate on the Hayfin Loans as of June 30,2023 and December 31, 2022 was approximately 17.4 % and 16.1 %, respectively.
12
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 8. |
STOCKHOLDERS’ EQUITY
|
Preferred Stock
The Company is currently authorized to issue up to 10 0.0001 no
Common Stock
As of June 30, 2023 and December 31, 2022, the Company was authorized to issue 300,000,000 0.0001 224,526,748 and 221,816,930
shares of common stock were outstanding as of June 30, 2023 and December 31, 2022, respectively. After giving effect to the 46,940,501
shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of June 30, 2023 there were 28,532,751 shares of common stock available for issuance.
Warrants
In connection with the Hayfin Credit Agreement that the Company entered into on March 23, 2022 (see Note 7), the Company
issued the Hayfin Warrants to purchase 9,103,047 shares of the Company’s common stock. The Hayfin Warrants were valued at $9.6 million using the Black-Scholes option-pricing model assuming an expected term of seven years , a volatility of 68.1 %, a dividend yield of 0 % and a risk-free rate of interest of 2.36 %.
On May 1, 2023 the Company issued the Hayfin Second Amendment Warrants, which were valued at $5.6
million using the Black-Scholes option-pricing model assuming an expected term of seven years , a volatility of 67.8 %, a dividend yield of 0 %
and a risk-free rate of interest of 3.62 %.
On May 13, 2023, warrants to purchase 24,800 shares of
the Company’s common stock held by a former noteholder of the Company expired in accordance with their terms. On June 16, 2023, various entities affiliated with Hayfin exercised 3,388,686 Hayfin Warrants in a cashless exercise transaction resulting in the Company issuing 1,967,847 shares of its common stock to such entities. At June 30, 2023 and December 31, 2022, the Company had outstanding warrants to purchase an aggregate of 12,502,906 and 13,525,148 shares,
respectively, of common stock, with weighted-average exercise prices of $2.32 and $1.99 per share, respectively, with expiration dates ranging between December 2024 and December 2030.
Equity Incentive Plans
The fair value of stock options granted under the Company’s equity incentive plans was determined on the date of grant using the Black-Scholes option valuation model. The Black-Scholes model was
developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of certain subjective assumptions including the
expected stock price volatility. The stock options granted to employees and directors have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair
value estimate. The following assumptions were used to determine the fair value of options granted during the six months ended June 30, 2023 and 2022:
13
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Six Months Ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Expected term
|
|
|
||||||
|
Volatility
|
|
%
|
|
%
|
||||
|
Dividend yield
|
|
|
||||||
|
Risk-free interest rate
|
|
%
|
|
%
|
||||
On June 21, 2022, the Company’s stockholders approved the ADMA Biologics, Inc. 2022 Compensation Plan (the “2022 Equity
Plan”), which replaced the ADMA Biologics, Inc. 2014 Omnibus Incentive Compensation Plan. Approval of the 2022 Equity Plan resulted in approximately 18 million additional shares of the Company’s common stock being reserved for future awards. During the six months ended June 30, 2023 and 2022, the
Company granted options to purchase an aggregate of 1,727,510 and 1,194,032 shares of common stock, respectively, to its directors and employees. The weighted average remaining contractual life of stock options outstanding and expected to vest at June
30, 2023 is 6.2 5.0 years. During the six months ended June 30, 2023, options to purchase 178,829 shares of common stock were exercised and the Company received aggregate exercise proceeds of $0.5 million. Also during the six months ended June 30, 2023, options to purchase 5,416
shares of common stock were exercised in a cashless transaction resulting in the issuance of 2,443 shares of common stock.
A summary of the Company’s option activity under the Company’s equity incentive plans and related information is as
follows:
|
Shares
|
Weighted
Average
Exercise Price
|
|||||||
|
Options outstanding, vested and expected to vest at December 31, 2022
|
|
$
|
|
|||||
|
Forfeited
|
(
|
)
|
$
|
|
||||
|
Expired
|
(
|
)
|
$
|
|
||||
|
Granted
|
|
$
|
|
|||||
| Exercised | ( |
) | $ | |||||
|
Options outstanding, vested and expected to vest at June 30, 2023
|
|
$
|
|
|||||
|
Options exercisable
|
|
$
|
|
|||||
As of June 30, 2023, the Company had $4.9 million of unrecognized compensation expense related to options granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period
of 2.9 years.
During the six months ended June 30, 2023 and 2022, the Company granted RSUs representing an aggregate of 2,976,260 and 1,109,266 shares,
respectively, to certain employees of the Company and to members of its Board of Directors. These RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors. During the six months ended
June 30, 2023, an aggregate of 806,781 shares of common stock vested in connection with grants of RSUs. With respect to these
vested RSUs, 246,082 shares valued at approximately $0.9 million were withheld by the Company to cover employees’ tax liabilities. These shares were no longer outstanding as of June 30, 2023. A summary of the
Company’s unvested RSU activity and related information is as follows:
14
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Shares
|
Weighted
Average Grant
Date Fair Value
|
|||||||
|
Balance at December 31, 2022
|
|
$
|
|
|||||
|
Granted
|
|
$
|
|
|||||
|
Vested
|
(
|
)
|
$
|
|
||||
|
Forfeited
|
(
|
)
|
$
|
|
||||
|
Balance at June 30, 2023
|
|
$
|
|
|||||
As of June 30, 2023, the Company had $11.6 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average
period of 3.2 years.
Total stock-based compensation expense for all awards granted under the Company’s equity incentive plans for the three
and six months ended June 30, 2023 and 2022 is as follows:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
Research and development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Plasma center operating expenses
|
|
|
|
|
||||||||||||
|
Selling, general and administrative
|
|
|
|
|
||||||||||||
|
Cost of product revenue
|
|
|
|
|
||||||||||||
|
Total stock-based compensation expense
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
| 9. |
RELATED PARTY TRANSACTIONS
|
The Company leases an office building and equipment from Areth, LLC (“Areth”)
pursuant to an agreement for services
effective as of January 1, 2016, as amended from time to time, and pays monthly rent on this facility in the amount of $10,000 through December 31, 2026. Rent expense for the three and six months ended June 30, 2023 and 2022 amounted to $30,000 60,000
During the six months ended June 30, 2023 and 2022, the Company purchased certain specialized medical equipment and
services primarily related to the Company’s plasma collection centers, as well as personal protective equipment, from GenesisBPS and its affiliates (“Genesis”), aggregating to $0.2 million and $0.1 million, respectively. Genesis is owned by Dr. Grossman
and Adam Grossman.
See Note 7 for a discussion of the Company’s former credit facility and related
transactions with Perceptive, a holder of more than 5 % of the Company’s common stock during the six months ended June 30, 2022. There were no transactions with Perceptive
during the six months ended June 30, 2023.
| 10. |
COMMITMENTS AND CONTINGENCIES
|
General Legal Matters
From time to time, the Company is or may become subject to certain legal proceedings and claims arising in connection
with the normal course of its business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s liquidity, results of operations or financial condition.
15
Index
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IT Systems Disruption