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 September 30, 2022
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 November 4, 2022, there were 196,777,308 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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23
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Item 3.
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36
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Item 4.
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36
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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 Immune Deficiency Disease, Primary Humoral
Immunodeficiency Disease (“PIDD” or “PI”) 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 or other 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
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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,
2021 and in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022. 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
| September 30, | December 31, | |||||||
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2022
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2021
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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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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 September 30,
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Nine Months Ended September 30,
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2022
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2021
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2022
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2021
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REVENUES:
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Product revenue
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$
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$
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$
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$
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License revenue
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Total revenues
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| Cost of product revenue | ||||||||||||||||
| Gross profit (loss) | ( |
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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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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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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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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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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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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
STOCKHOLDERS’ EQUITY (Unaudited)
For the Three and Nine Months Ended September 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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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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Stock-based compensation
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-
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| Warrants issued in connection with notes payable | - | |||||||||||||||||||
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Vesting of Restricted Stock Units, net of shares withheld for taxes and retired
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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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Balance at March 31, 2022
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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 and retired
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Net loss
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-
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(
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(
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| Balance at June 30, 2022 | ( |
) | ||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Vesting of Restricted Stock Units, net of shares withheld for taxes |
( |
) | ( |
) | ||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance at September 30, 2022 | $ |
$ |
$ |
( |
) | $ |
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For the Three and Nine Months Ended September 30, 2021
| 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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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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Balance at December 31, 2020
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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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Issuance of common stock, net of offering expenses
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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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Balance at March 31, 2021
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(
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Stock-based compensation
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-
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Issuance of common stock, net of offering expenses
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Net loss
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-
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(
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(
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| Balance at June 30, 2021 | ( |
) | ||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Vesting of Restricted Stock Units, net of shares withheld for taxes and retired | ( |
) | ( |
) | ||||||||||||||||
| Issuance of common stock, net of offering expenses | ||||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance at September 30, 2021 | $ |
$ |
$ |
( |
) | $ |
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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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Nine Months Ended September 30,
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2022
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2021
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CASH FLOWS FROM OPERATING ACTIVITIES:
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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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Changes in operating assets and liabilities:
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Accounts receivable
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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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)
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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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Deposits and other assets
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(
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)
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|||||
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Accounts payable
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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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Net cash used in operating activities
|
(
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)
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(
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)
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of property and equipment
|
(
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)
|
(
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)
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Net cash used in investing activities
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(
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)
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(
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)
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Principal payments on notes payable
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( |
) | ||||||
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Proceeds from issuance of common stock, net of offering expenses
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Payment of debt refinancing fees
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(
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)
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Proceeds from issuance of note payable
|
||||||||
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Taxes paid on vested Restricted Stock Units
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(
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)
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(
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)
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||||
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Payments on finance lease obligations
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(
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)
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(
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)
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||||
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Payment of deferred financing fees
|
( |
) | ||||||
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Net cash provided by financing activities
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|
||||||
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Net decrease in cash and cash equivalents
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(
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)
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(
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)
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||||
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Cash and cash equivalents - beginning of period
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|
|
||||||
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Cash and cash equivalents - end of period
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 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 in
various stages of approval and development located throughout the U.S., seven of which hold an approved license with the FDA, with two additional collection facilities in operation and collecting plasma presently under FDA licensing preparation and review and another facility under construction.
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 September 30, 2022, the Company had working capital of $179.7 million, including $34.9 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, the Company’s management currently
believes that its cash, cash equivalents, projected revenue and accounts receivable, together with the remaining available funds under the distribution agreement entered into in September of 2021 (see Note 8) and the additional proceeds
available from the refinancing of the Company’s senior debt on March 23, 2022 (see Note 7), will be sufficient to fund ADMA’s operations, as currently conducted, into the first quarter of 2024, at which time the Company believes it will begin
to generate 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 acceptability of ADMA’s immune globulin products by physicians, patients or payers. Depending on the cost of capital, the Company may decide to raise capital through
public or private equity offerings or debt financings, or may enter into a corporate collaboration or licensing arrangement. The sale of additional or equity or debt securities, if convertible, could result in dilution to the Company’s
stockholders and, in such event, the value and potential future market price of its common stock may decline. There can be no assurance that the Company’s approved products will be commercially viable, or that plant capacity expansion, plasma
center buildouts 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.
The
Company continues to evaluate a variety of strategic alternatives through its ongoing engagement with Morgan Stanley. The exploration of value-creating opportunities remains a top corporate priority for ADMA.
5
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, 2021 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 24, 2022. The accompanying consolidated balance sheet as of December 31,
2021 was derived from the audited financial statements as of and for the year ended December 31, 2021. 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 September 30, 2022, its results of operations and changes in stockholders’ equity for the three and nine months
ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021.
During the three and nine months ended September 30, 2022 and 2021, 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 $0.1 million and $0.2
million at September 30, 2022 and December 31, 2021, 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 and associated credit risk of customers are performed on an ongoing basis. Based on these evaluations, the Company has concluded that its credit risk is minimal. At September 30, 2022, four customers accounted for an aggregate of 93 % of the Company’s total
accounts receivable, and at December 31, 2021, three customers accounted for approximately 94 % of the Company’s total accounts receivable.
6
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 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 September 30, 2022 and December 31, 2021 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
nine months ended September 30, 2022 and 2021, the
Company determined that there was no
7
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenue Recognition
Revenues for the three and nine months ended September 30, 2022 and 2021 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 nine months ended September 30, 2022, two
customers represented an aggregate of 72 % of the Company’s consolidated revenues. For the nine months ended September
30, 2021, four customers represented an aggregate of 74 % 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 nine months ended September
30 , 2022 and 2021, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects:
8
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
For the Nine Months Ended September 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Stock options
|
|
|
||||||
|
Restricted Stock Units
|
|
|
||||||
|
Warrants
|
|
|
||||||
|
|
|
|||||||
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. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2017 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 not incurred any liability for unrecognized tax benefits as of September 30, 2022 and December
31, 2021, and during the three and nine months ended September 30, 2022 and 2021, the Company recognized no
| 3. |
INVENTORIES
|
The following table provides the components of inventories:
|
September 30,
2022
|
December 31,
2021
|
|||||||
|
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. All other activities and materials associated with the production of
inventories used in research and development activities are expensed as incurred.
9
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 which is expected to be sold to third-party customers.
| 4. |
INTANGIBLE ASSETS
|
Intangible assets at September 30, 2022 and December 31, 2021 consist of the following:
|
September 30, 2022
|
December 31, 2021
|
|||||||||||||||||||||||
| 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 $0.5 0.2
|
Remainder of 2022
|
$
|
|
||
|
2023
|
|
|||
|
2024
|
|
| 5. |
PROPERTY AND EQUIPMENT
|
Property and equipment and related accumulated depreciation are summarized as
follows:
|
September 30, 2022
|
December 31, 2021
|
|||||||
|
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.
10
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company recorded depreciation expense on property and equipment for the three
months ended September 30, 2022 and 2021 of $1.7 million and $1.2 million, respectively, and for the nine months
ended September 30, 2022 and 2021 of $4.6 million and $3.4 million, respectively.
| 6. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
Accrued expenses and other current liabilities at September 30, 2022 and December 31, 2021 are as follows:
|
September 30, 2022
|
December 31, 2021
|
|||||||
|
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:
|
September 30, 2022
|
December 31, 2021
|
|||||||
|
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 expires 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 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.
Borrowings under the Hayfin Credit Agreement bear 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 shall increase 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 will pay accrued interest to Hayfin. The rate of interest in effect as of the
Hayfin Closing Date and as of September 30, 2022 was 10.75 % and approximately 12.1 %, 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.
From the Hayfin Closing
Date through September 30, 2022, approximately $2.0 million of interest was paid in kind and added to the balance of the
outstanding Hayfin Loans.
11
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 condensed consolidated balance sheet as of September 30, 2022. Prior to the Hayfin Maturity Date, there are no scheduled principal payments on the Hayfin Loans. The Company may prepay outstanding principal on the Hayfin Loans at any time and from time to time upon business days’ prior written notice, subject to the payment to Hayfin of, (A) any accrued but unpaid interest on the prepaid principal
amount plus (B) 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 Closing Date, (ii) 3.0 % of the prepaid principal amount, if prepaid after the first
anniversary of the Hayfin Closing Date and on or prior to the second anniversary of the Hayfin Closing Date, or (iii) 1.0 % of
the prepaid principal amount, if prepaid after the second anniversary of the Hayfin Closing Date and on or prior to the third anniversary of the Hayfin Closing Date. In addition, for any prepayments of principal or payment of principal on
the Hayfin Maturity Date, the Company is also required to pay the exit fee.
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 September
30, 2022, 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 .
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, the Company recognized an aggregate discount on the Hayfin Loans in the amount of $13.9 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 the Hayfin Closing Date and as of September 30, 2022 was approximately 13.0 % and 14.3 %, respectively.
12
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 September 30, 2022 and December 31, 2021, the Company was authorized to issue 300,000,000 0.0001 196,776,871 and 195,813,817 shares of common stock were outstanding as of September 30, 2022 and December 31, 2021, respectively. After giving effect to the 49,951,243 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of September 30, 2022
there were 53,271,886 shares of common stock available for issuance.
On September 3, 2021, the Company
entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which the Company may offer and sell, from time to time, at its option, through or
to the Agent, up to an aggregate of $50 million of
shares of the Company’s common stock (the “Distribution Agreement”). The Company intends to use any net proceeds from the sale of common stock under the Distribution Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, funding expansion of plasma collection centers, working capital,
capital expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities. The Company currently has approximately $42.8 million of shares
available to sell under the Distribution Agreement. There were no sales under the Distribution Agreement during the nine months ended September 30, 2022.
During the nine months ended September 30, 2021, the Company issued 5,540,831 shares of
its common stock under the Distribution Agreement and received net proceeds of $6.9 million.
On August 5, 2020, the Company entered into an open market sale agreement (as amended from time to time, 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. On November 5, 2020 and February 3, 2021, the Company and Jefferies amended the Sale Agreement to provide for increases in the aggregate offering amount under the Sale Agreement such that the Company could sell
shares having an aggregate offering price of up to $105.4 million under the Sale Agreement, as amended. The Sale Agreement was
terminated on August 31, 2021. During the nine months ended September 30, 2021, the Company issued and sold 27,805,198 shares of
common stock under the Sale Agreement and received net proceeds of $60.4 million.
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 %.
During the nine months ended September 30, 2022, outstanding warrants to purchase 74,309 shares of the Company’s common stock
expired in accordance with the terms of the warrants. At September 30, 2022, the Company had outstanding warrants to purchase an aggregate of 13,556,898
shares of common stock, with a weighted-average exercise price of $2.00 per share. At December 31, 2021, 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.
13
ADMA BIOLOGICS, INC. AND SUBSIDIARIES
NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Equity Incentive Plans
The fair value of stock options granted under the ADMA Biologics, Inc. 2014 Omnibus Incentive Compensation
Plan, as amended and restated (the “2014 Plan”), 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 nine months ended September 30, 2022 and 2021:
|
Nine Months Ended September 30,
|
||||||
|
2022
|
2021
|
|||||
|
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”). Approval of the 2022 Equity Plan resulted in approximately 18 million additional shares of the Company’s common stock being
reserved for future awards. During the nine months ended September 30, 2022 and 2021, the Company granted options to purchase an aggregate of 1,194,032
and 1,757,050 shares of common stock, respectively, to its directors and employees. The weighted average remaining contractual life
of stock options outstanding and expected to vest at September 30, 2022 is 6.3 5.4 years.
A summary of the Company’s option activity under the Company’s equity incentive plans and related information is as
follows:
| Weighted | ||||||||
| Average | ||||||||
|
Shares
|
Exercise Price
|
|||||||
|
Options outstanding, vested and expected to vest at December 31, 2021
|
|
$
|
|
|||||
|
Forfeited
|
(
|
)
|
$
|
|
||||
|
Expired
|
(
|
)
|
$
|
|
||||
|
Granted
|
|
$
|
|
|||||
|
Options outstanding, vested and expected to vest at September 30, 2022
|
|
$
|
|
|||||
|
Options exercisable
|
|
$
|
|
|||||
As of September 30, 2022, the Company had $2.8 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 2.3 years.
During the nine months ended September 30, 2022 and 2021, the Company granted RSUs representing an aggregate of 1,119,266 and 4,332,244 shares, respectively, to certain management employees of the Company and to members of its Board of Directors. Except for the RSUs granted
under the Company’s retention incentive program discussed below, these RSUs generally vest annually over a period of four years for
employees and semi-annually over a period of one year for directors. On September 28, 2021, the Company implemented a retention
incentive program for the Company’s executive management and certain employees (see Note 10), whereby the Company issued an aggregate of 3,780,000
RSUs, of which 2,632,500 are time-based RSUs and 1,147,500 are milestone-based RSUs. percent of the time-based RSUs
granted under the retention bonus program will vest on December 31, 2022, with the remainder vesting in quarterly installments through December 31, 2024. The milestone-based RSUs vest upon achievement of the applicable milestone, and all of the
milestone-based RSUs vested during the nine months ended September 30, 2022. During the nine months ended September 30, 2022, an aggregate of