Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | ADMA BIOLOGICS, INC. | |
Entity Central Index Key | 0001368514 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-36728 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 86,345,313 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 101,235,699 | $ 26,752,135 |
Accounts receivable, net | 7,107,834 | 3,469,919 |
Inventories | 52,288,803 | 53,064,734 |
Prepaid expenses and other current assets | 4,855,344 | 2,533,593 |
Total current assets | 165,487,680 | 85,820,381 |
Property and equipment, net | 35,060,795 | 31,741,317 |
Intangible assets, net | 2,980,636 | 3,159,474 |
Goodwill | 3,529,509 | 3,529,509 |
Deposits and other assets | 3,465,207 | 2,840,044 |
TOTAL ASSETS | 210,523,827 | 127,090,725 |
Current liabilities | ||
Accounts payable | 9,152,239 | 9,174,591 |
Accrued expenses and other current liabilities | 4,419,043 | 4,481,395 |
Current portion of deferred revenue | 142,834 | 142,834 |
Current portion of lease obligations | 193,987 | 229,073 |
Total current liabilities | 13,908,103 | 14,027,893 |
Senior notes payable, net of discount | 81,212,090 | 68,291,163 |
Deferred revenue, net of current portion | 2,225,823 | 2,261,532 |
Subordinated note payable, net of discount | 14,916,837 | 14,908,053 |
Lease obligations, net of current portion | 1,831,639 | 1,302,361 |
Other non-current liabilities | 93,652 | 106,574 |
TOTAL LIABILITIES | 114,188,144 | 100,897,576 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common Stock - voting, $0.0001 par value, 150,000,000 shares authorized, 86,345,313 and 59,318,355 shares issued and outstanding | 8,635 | 5,932 |
Additional Paid-In Capital | 380,288,833 | 290,903,772 |
Accumulated Deficit | (283,961,785) | (264,716,555) |
TOTAL STOCKHOLDERS' EQUITY | 96,335,683 | 26,193,149 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 210,523,827 | $ 127,090,725 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Stockholders Equity | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 86,345,313 | 59,318,355 |
Common stock, outstanding | 86,345,313 | 59,318,355 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
REVENUES: | ||
Product revenue | $ 10,164,036 | $ 3,492,881 |
License and other revenue | 35,708 | 35,708 |
Total Revenues | 10,199,744 | 3,528,589 |
OPERATING EXPENSES | ||
Cost of product revenue (exclusive of amortization expense shown below) | 16,829,226 | 9,405,179 |
Research and development | 1,528,738 | 870,635 |
Plasma center operating expenses | 500,644 | 654,486 |
Amortization of intangible assets | 178,838 | 211,235 |
Selling, general and administrative | 7,932,084 | 5,595,470 |
TOTAL OPERATING EXPENSES | 26,969,530 | 16,737,005 |
LOSS FROM OPERATIONS | (16,769,786) | (13,208,416) |
OTHER INCOME (EXPENSE): | ||
Interest and other income | 248,068 | 127,399 |
Interest expense | (2,717,091) | (1,540,507) |
Loss on extinguishment of debt | 0 | (9,962,495) |
Gain on transfer of plasma center assets | 0 | 11,527,421 |
Other expense | (6,421) | (11,357) |
Other (expense) income, net | (2,475,444) | 140,461 |
NET LOSS | $ (19,245,230) | $ (13,067,955) |
BASIC AND DILUTED LOSS PER COMMON SHARE | $ (0.26) | $ (0.28) |
WEIGHTED AVERAGE SHARES OUTSTANDING, Basic and Diluted | 73,781,507 | 46,353,068 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 46,353,068 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 4,635 | $ 236,203,041 | $ (216,437,238) | $ 19,770,438 |
Stock-based compensation | 637,263 | 637,263 | ||
Warrants issued in connection with note payable | 2,699,208 | 2,699,208 | ||
Net loss | (13,067,955) | (13,067,955) | ||
Ending balance, shares at Mar. 31, 2019 | 46,353,068 | |||
Ending balance, amount at Mar. 31, 2019 | $ 4,635 | 239,539,512 | (229,505,193) | 10,038,954 |
Beginning balance, shares at Dec. 31, 2019 | 59,318,355 | |||
Beginning balance, amount at Dec. 31, 2019 | $ 5,932 | 290,903,772 | (264,716,555) | 26,193,149 |
Stock-based compensation | 676,548 | 676,548 | ||
Stock options exercised, Shares | 1,958 | |||
Stock options exercised, Amount | 7,177 | 7,177 | ||
Issuance of common stock, net of offering expenses, Shares | 27,025,000 | |||
Issuance of common stock, net of offering expenses, Amount | $ 2,703 | 88,701,336 | 88,704,039 | |
Warrants issued in connection with note payable | 0 | |||
Net loss | (19,245,230) | (19,245,230) | ||
Ending balance, shares at Mar. 31, 2020 | 86,345,313 | |||
Ending balance, amount at Mar. 31, 2020 | $ 8,635 | $ 380,288,833 | $ (283,961,785) | $ 96,335,683 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (19,245,230) | $ (13,067,955) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 788,838 | 805,330 |
Loss on disposal of fixed assets | 976 | 391 |
Stock-based compensation | 676,548 | 637,263 |
Gain on transfer of plasma assets | 0 | (11,527,421) |
Amortization of debt discount | 429,711 | 244,767 |
Loss on extinguishment of debt | 0 | 9,962,495 |
Amortization of license revenue | (35,708) | (35,708) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,637,915) | 82,037 |
Inventories | 775,932 | (25,310) |
Prepaid expenses and other current assets | (2,321,751) | (289,134) |
Deposits and other assets | (79,532) | 179,644 |
Accounts payable | (22,356) | (420,601) |
Accrued expenses | (1,930,591) | (762,541) |
Other current and non-current liabilities | (45,882) | (70,442) |
Net cash used in operating activities | (24,646,960) | (14,287,184) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (2,074,876) | (110,453) |
Proceeds from the sale of property and equipment | 2,000 | 0 |
Net cash provided by (used in) investing activities | (2,072,876) | (110,453) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments on note payable | 0 | (30,000,000) |
Payment of end of term fee | 0 | (2,760,000) |
Payment of debt refinancing fees | 0 | (6,499,867) |
Proceeds from issuance of note payable | 12,500,000 | 45,000,000 |
Payment of debt issuance costs | 0 | (1,555,762) |
Proceeds from issuance of common stock, net of offering expenses | 88,704,039 | 0 |
Proceeds from the exercise of stock options | 7,177 | 0 |
Payments on finance lease obligations | (7,816) | (7,308) |
Net cash provided by financing activities | 101,203,400 | 4,177,063 |
Net (decrease) increase in cash and cash equivalents | 74,483,564 | (10,220,574) |
Cash and cash equivalents, including restricted cash - beginning of period | 26,752,135 | 26,754,852 |
Cash and cash equivalents, including restricted cash - end of period | $ 101,235,699 | $ 16,534,278 |
1. ORGANIZATION AND BUSINESS
1. ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 Bio Centers Georgia Inc. (“ADMA Bio Centers”). 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”) as more fully described below. BTBU had been the Company’s third-party manufacturer for its then-lead pipeline product candidate, ASCENIV, previously referred to as “RI-002.” ADMA Bio Centers is the Company’s source plasma collection business with a plasma collection facility located in the U.S., which holds an approved license with the U.S. Food and Drug Administration (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”), and for which we received FDA approval on May 9, 2019 for the commercial re-launch of the product and commenced the commercial re-launch in August 2019; (ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing Hepatitis B surface antigen (“HBsAg”) and other listed exposures to Hepatitis B. 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. On June 6, 2017, ADMA completed the acquisition of certain assets (the “Biotest Assets”) of BTBU, which included the FDA-licensed BIVIGAM and Nabi-HB immunoglobulin products, and an FDA-licensed plasma fractionation manufacturing facility located in Boca Raton, FL (the “Boca Facility”) (the “Biotest Transaction”). In addition to its commercially available immunoglobulin products, the Company provides contract manufacturing services for certain clients and generates revenues from the sale of intermediate by-products that result from the immunoglobulin production process. As of March 31, 2020, the Company had working capital of $151.6 million, including $101.2 million of cash and cash equivalents. Based upon the Company’s current projected revenue and expenditures, including capital expenditures and continued implementation of the Company’s commercialization and expansion activities, as well as certain other assumptions, the Company’s management currently believes that its cash, cash equivalents, projected revenue and accounts receivable will be sufficient to fund ADMA’s operations, as currently conducted, into the second quarter of 2021. In order to have sufficient cash to fund its operations thereafter, the Company anticipates it will need to raise additional capital before the end of the second quarter of 2021. These estimates may change based upon the success of the Company’s commercial sales of its products, manufacturing ramp-up activities, the acceptability of ADMA’s immune globulin products by physicians, patients or payers and the various financing options that may be available to the Company. The Company currently has no firm commitments for additional financing, and there can be no assurance that the Company will be able to secure additional financing on terms that are acceptable to the Company, or at all. Furthermore, if the Company’s assumptions underlying its estimated expenses and revenues are incorrect, it may have to raise additional capital sooner than currently anticipated. Due to numerous risks and uncertainties associated with FDA approvals related to the Company’s products or the labeled indications of such products, ongoing compliance requirements and capacity expansion efforts at the Company’s Boca Facility and future commercialization of the Company’s products, including the Company’s ability to obtain adequate quantities of FDA-approved plasma with proper specifications on acceptable terms for use in the Company’s manufacturing process, as well as the additional uncertainties surrounding the COVID-19 pandemic (see Note 9) the Company is unable to estimate with certainty the amounts of increased capital outlays and operating expenditures required to fund its commercial and development activities. The Company’s current estimates may be subject to change as circumstances regarding its business requirements evolve. Failure to secure any necessary financing in a timely manner and on commercially reasonable terms could have a material adverse effect on the Company’s business plan and financial performance and it could be forced to delay or discontinue its commercialization, product development or clinical activities or delay or discontinue the approval efforts for any of the Company’s products or product candidates. The Company has reported cumulative losses since inception in June 2004 through March 31, 2020 of $284.0 million. As such, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of asset carrying amounts and the classification of liabilities that might be necessary from the outcome of this uncertainty. The Company may decide to raise capital through public or private equity offerings or debt financings, or obtain a bank credit facility or enter into corporate collaboration and licensing arrangements. The sale of additional equity or debt securities, if convertible, could result in dilution to the Company’s existing stockholders and, in such event, the market value of its common stock may decline. The incurrence of additional indebtedness would result in increased fixed obligations and could also result in covenants that would restrict the Company’s operations or other financing alternatives. In addition, the Company is exploring additional contract manufacturing arrangements and other business development opportunities, which may provide additional liquidity to the Company. There can be no assurance that the Company’s approved products will be commercially viable, or that research and development, plant capacity expansion, plasma center build-outs or other capital improvements will be successfully completed or that any product developed in the future will be approved. The Company is subject to risks common to companies in the biotechnology and pharmaceutical manufacturing industries including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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, 2019 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2020. The accompanying consolidated balance sheet as of December 31, 2019 was derived from the audited financial statements for the year ended December 31, 2019. 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 March 31, 2020 and its results of operations, changes in equity and cash flows for the three months ended March 31, 2020. During the three months ended March 31, 2020 and 2019, 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 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 6) approximates fair value due to the variable interest rate on this debt. With respect to the subordinated note payable in the amount of $15.0 million as of March 31, 2020 and December 31, 2019, which is held by Biotest, a principal stockholder of the Company at the time the note was issued and was issued concurrent with an acquisition transaction with an affiliate of such stockholder (see Note 6), the Company has concluded that an estimation of fair value for this note is not practicable. Accounts receivable A ccounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. The Company extends credit to its customers based upon an evaluation of each customer's financial condition and credit history. Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis. Based on these evaluations, the Company has concluded that the credit risk is minimal. At March 31, 2020, three customers accounted for an aggregate of 84% of the Company’s total accounts receivable, and at December 31, 2019, two customers accounted for 89% of the Company’s total accounts receivable. Inventories 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. Due to previous uncertainties surrounding certain prior submissions made to the FDA, all costs related to the production of BIVIGAM and ASCENIV prior to their FDA approval dates of May 9, 2019 and April 1, 2019, respectively, have been charged to cost of product revenue in the accompanying consolidated statements of operations. Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired by the Company. Goodwill at March 31, 2020 and December 31, 2019 was $3.5 million. All of the Company’s goodwill is attributable to the acquisition of its ADMA BioManufacturing business segment. 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, 2019 did not result in a goodwill impairment charge, and the Company did not record any impairment charges related to goodwill for the three months ended March 31, 2020 and 2019. Impairment of long-lived assets The Company assesses the recoverability of its long-lived assets, which include property and equipment and definite-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 months ended March 31, 2020 and 2019, the Company determined that there was no impairment of its long-lived assets. Revenue recognition Revenues for the three months ended March 31, 2020 and 2019 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, ASCENIV, BIVIGAM and Nabi-HB, (ii) product revenues from the sale of human plasma collected from the Company’s Plasma Collection Centers business segment, (iii) contract manufacturing revenue, (iv) revenues from the sale of intermediate by-products; and (v) license and other revenues primarily attributable to the out-licensing of ASCENIV to Biotest in 2012 to market and sell this product in Europe and selected countries in North Africa and the Middle East. Biotest has provided the Company with certain services and financial payments in accordance with the related Biotest license agreement and is obligated to pay the Company certain amounts in the future if certain milestones are achieved. Deferred revenue is recognized over the term of the Biotest license. Deferred revenue is amortized into income for a period of approximately 22 years, the term of the Biotest license agreement. 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 three months ended March 31, 2020, three customers represented an aggregate of 82% of the Company’s consolidated revenues. For the three months ended March 31, 2019, two customers represented an aggregate of 81% of the Company’s consolidated revenues. Cost of product revenue Cost of product revenue includes expenses related to process development as well as 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. 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 as the Company reported a net loss for all periods presented. For the three months ended March 31, 2020 and 2019, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects: For the Three Months Ended March 31, 2020 2019 Stock options 6,753,354 5,599,435 Restricted stock units 333,500 — Warrants 2,138,160 1,888,160 9,225,014 7,487,595 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 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) 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 2015 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 fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of March 31, 2020 and December 31, 2019, and during the three months ended March 31, 2020 and 2019, the Company recognized no adjustments for uncertain tax positions. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) |
3. INVENTORIES
3. INVENTORIES | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
3. INVENTORIES | The following table provides the components of inventories: March 31, December 31, Raw materials $ 29,717,087 $ 33,381,806 Work-in-progress 17,139,411 14,455,665 Finished goods 5,432,305 5,227,263 Total inventories $ 52,288,803 $ 53,064,734 Raw materials includes plasma and other materials expected to be used in the production of ASCENIV, BIVIGAM and Nabi-HB, as there are alternative uses for these materials that provide a probable future benefit or will be consumed in the production of goods expected to be available for sale. All other activities and materials associated with the production of inventories used in research and development activities are expensed as incurred. Work-in-process inventory primarily consists of bulk drug substance and unlabeled filled vials of the Company’s immunoglobulin products. Finished goods inventory is comprised of immunoglobulin product inventory and related intermediates that are available for commercial sale, as well as plasma collected at the Company’s plasma collection center which is expected to be sold to third-party customers. |
4. INTANGIBLE ASSETS
4. INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
4. INTANGIBLE ASSETS | Intangible assets at March 31, 2020 and December 31, 2019 consist of the following: March 31, 2020 December 31, 2019 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Trademark and other intangible rights related to Nabi-HB $ 4,100,046 $ 1,659,542 $ 2,440,504 $ 4,100,046 $ 1,513,112 $ 2,586,934 Rights to intermediates 907,421 367,289 540,132 907,421 334,881 572,540 Customer contract 1,076,557 1,076,557 — 1,076,557 1,076,557 — $ 6,084,024 $ 3,103,388 $ 2,980,636 $ 6,084,024 $ 2,924,550 $ 3,159,474 All of the Company’s intangible assets were acquired in the Biotest Transaction. Amortization expense related to these intangible assets for the three months ended March 31, 2020 and 2019 was $0.2 million. Estimated aggregate future aggregate amortization expense for the next five years is expected to be as follows: Remainder of 2020 $ 536,514 2021 715,352 2022 715,352 2023 715,352 2024 298,066 |
5. PROPERTY AND EQUIPMENT
5. PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
5. PROPERTY AND EQUIPMENT | Property and equipment and related accumulated depreciation are summarized as follows: March 31, 2020 December 31, 2019 Manufacturing and laboratory equipment $ 9,524,749 $ 8,831,817 Office equipment and computer software 2,220,856 1,690,248 Furniture and fixtures 1,133,132 582,088 Construction in process 6,022,188 4,285,915 Leasehold improvements 1,673,084 1,673,084 Land 4,339,441 4,339,441 Buildings and building improvements 16,480,277 16,063,680 41,393,727 37,466,273 Less: Accumulated depreciation (6,332,932 ) (5,724,956 ) Total property and equipment, net $ 35,060,795 $ 31,741,317 Fixed assets 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 three 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 March 31, 2020 and 2019 of $0.6 million. |
6. DEBT
6. DEBT | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
6. DEBT | Senior Notes Payable A summary of outstanding senior notes payable is as follows: March 31, 2020 December 31, 2019 Notes payable $ 85,000,000 $ 72,500,000 Less: Debt discount (3,787,910 ) (4,208,837 ) Senior notes payable $ 81,212,090 $ 68,291,163 On February 11, 2019 (the “Perceptive Closing Date”), the Company and all of its subsidiaries entered into a Credit Agreement and Guaranty (the “Perceptive Credit Agreement”) with Perceptive Credit Holdings II, LP, as the lender and administrative agent (“Perceptive”). The Perceptive Credit Agreement, as amended, provides for a senior secured term loan facility in a principal amount of up to $85.0 million (the “Perceptive Credit Facility”), comprised of (i) a term loan made on the Perceptive Closing Date in the principal amount of $45.0 million, as evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche I Note”) in favor of Perceptive on the Perceptive Closing Date (the “Perceptive Tranche I Loan”), (ii) a term loan in the principal amount of up to $27.5 million (the “Perceptive Tranche II Loan”) evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche II Note”) in favor of Perceptive on May 3, 2019; and (iii) a term loan in the principal amount of up to $12.5 million evidenced by the Company’s issuance of a promissory note (the “Perceptive Tranche III Note”) in favor of Perceptive on March 20, 2020 (the “Perceptive Tranche III Loan,” and together with the Perceptive Tranche I Loan and the Perceptive Tranche II Loan, the “Perceptive Loans”). The Perceptive Tranche III Loan is the result of an amendment to the Perceptive Credit Agreement (the “Perceptive Amendment”) that the Company and Perceptive entered into on May 3, 2019, and the Perceptive Tranche III Loan became available to the Company upon the approval of BIVIGAM on May 9, 2019. On the Perceptive Closing Date, the Company used $30.0 million of the Perceptive Tranche I Loan to terminate and pay in full all of the outstanding obligations under its previously existing credit agreement with Marathon Healthcare Finance Fund, L.P. (“Marathon”) (the “Marathon Credit Facility”). The Company also used proceeds from the Perceptive Tranche I Loan to: (i) pay a deferred facility fee to Marathon in the amount of $2.8 million, (ii) pay a prepayment penalty to Marathon in the amount of $6.5 million, (iii) pay outstanding accrued interest to Marathon in the amount of $0.7 million, and (iv) pay certain fees and expenses incurred in connection with the Perceptive Credit Facility of approximately $1.5 million. In addition, Marathon released $4.0 million of cash to the Company that was held in a debt service reserve account per the terms of the Marathon Credit Facility. In connection with the Perceptive Amendment, the Company paid an additional facility fee to Perceptive in the amount of $0.1 million on May 3, 2019. As a result of the Company’s entering into the Perceptive Credit Agreement and terminating the Marathon Credit Facility, the Company recognized a loss on the extinguishment of debt for the three months ended March 31, 2019 in the amount of approximately $10.0 million, comprised of the $6.5 million prepayment penalty and the write-off of unamortized debt discount related to the Marathon Credit Facility in the amount of $3.5 million. Borrowings under the Perceptive Credit Agreement bear interest at a rate per annum equal to 7.5% plus the greater of (i) one-month LIBOR and (ii) 3.5%; provided, however, that upon, and during the continuance of, an Event of Default, the interest rate will automatically increase by an additional 400 basis points. Accrued interest is payable to Perceptive on the last day of each month during the term of the Perceptive Credit Facility. The rate of interest in effect as of the Perceptive Closing Date and at March 31, 2020 was 11.0%. On the Maturity Date, the Company will pay Perceptive the entire outstanding principal amount underlying the Perceptive Loans and any accrued and unpaid interest thereon. Prior to the Maturity Date, there will be no scheduled principal payments on the Perceptive Loans. The Company may prepay outstanding principal on the Perceptive Loans at any time and from time to time upon three business days’ prior written notice, subject to the payment to Perceptive of, (A) any accrued but unpaid interest on the prepaid principal amount plus (B) a redemption premium amount equal to (i) 5.0% of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Perceptive Closing Date, (ii) 4.0% of the prepaid principal amount, if prepaid after the first anniversary of the Perceptive Closing Date and on or prior to the second anniversary of the Perceptive Closing Date, or (iii) 3.0% of the prepaid principal amount, if prepaid after the second anniversary of the Perceptive Closing Date and on or prior to the third anniversary of the Perceptive Closing Date. All of the Company’s obligations under the Perceptive Credit Agreement are secured by a first-priority lien and security interest in substantially all of the Company’s tangible and intangible assets, including intellectual property and all of the equity interests in the Company’s subsidiaries. The Perceptive Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings. The negative covenants restrict or limit the ability of the Company and its subsidiaries to, among other things and subject to certain exceptions contained in the Perceptive Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s or subsidiaries’ business activities; make certain Investments or Restricted Payments (each as defined in the Perceptive Credit Agreement); change its fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting the Company’s ability to make loan repayments under the Perceptive Credit Agreement. In addition, the Company must (i) at all times prior to the Maturity Date maintain a minimum cash balance of $3.0 million; and (ii) as of the last day of each fiscal quarter commencing with the fiscal quarter ending June 30, 2019, report revenues for the trailing 12-month period that exceed the amounts set forth in the Perceptive Credit Agreement, which range from $7.0 million for the fiscal quarter ended June 30, 2019 to $55.0 million for the fiscal quarter ending December 31, 2021. At March 31, 2020, the Company was in compliance with all of the covenants contained in the Perceptive Credit Agreement. As consideration for the Perceptive Credit Agreement, the Company issued to Perceptive a warrant to purchase 1,360,000 shares of the Company’s common stock (the “Perceptive Warrant”) on the Perceptive Closing Date. The Perceptive Warrant has an exercise price equal to $3.28 per share, which is equal to the trailing 10-day volume weighted average price (“VWAP”) of the Company’s common stock on the business day immediately prior to the Perceptive Closing Date multiplied by 1.15. The Company valued the Perceptive Warrant at $2.7 million as of the Perceptive Closing Date and it has an expiration date of February 11, 2029. In connection with the Perceptive Amendment, the Company issued an additional warrant (the “Perceptive Tranche III Warrant” and, together with the Perceptive Warrant, the “Perceptive Warrants”) to purchase 250,000 shares of the Company’s common stock to Perceptive with an exercise price equal to $4.64 per share, which represents the trailing 10-day VWAP of the Company’s common stock as of May 2, 2019. The Perceptive Tranche III Warrant was valued by the Company at $0.9 million and has an expiration date of May 3, 2029. Perceptive has represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act) and the Company issued the Perceptive Warrants in reliance upon an exemption from registration contained in Section 4(2) under the Securities Act. The Perceptive Warrants and the shares of common stock issuable thereunder may not be offered, sold, pledged or otherwise transferred in the U.S. absent registration or an applicable exemption from the registration requirements under the Securities Act. As a result of the fees paid to Perceptive and the value of the Perceptive Warrants, the Company recognized an aggregate discount on the Perceptive Tranche I Note and Perceptive Tranche II Note in the amount of $5.3 million. The Company records debt discount as a reduction to the face amount of the debt, and the debt discount is amortized as interest expense over the life of the debt using the interest method. Based on the fair value of the Perceptive Warrants and the aggregate amount of fees and expenses associated with obtaining the Perceptive Credit Facility, the effective interest rate on the Perceptive Loans as of May 3, 2019 was approximately 14.1%. Subordinated Note Payable A summary of the outstanding subordinated note payable is as follows: March 31, 2020 December 31, 2019 Subordinated note payable to Biotest $ 15,000,000 $ 15,000,000 Less: Debt discount (83,163 ) (91,947 ) Subordinated note payable $ 14,916,837 $ 14,908,053 In connection with the acquisition of the Biotest Assets (see Note 1), ADMA BioManufacturing issued a subordinated note payable to BPC and in connection therewith received cash proceeds of $15.0 million. This note has since been assigned from BPC to Biotest AG. The note bears interest at a rate of 6.0% per annum and matures on June 6, 2022. The Company is obligated to make semi-annual interest payments, with all principal and unpaid interest due at maturity. The note is subordinate to all amounts outstanding under the Perceptive Credit Agreement. In the event of default, all principal and unpaid interest is due on demand. The subordinated note also contains several non-financial covenants with which the Company was in compliance as of March 31, 2020. |
7. STOCKHOLDERS' EQUITY
7. STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
7. STOCKHOLDERS' EQUITY | Preferred Stock The Company is currently authorized to issue up to 10 million shares of preferred stock, $0.0001, par value per share. There were no shares of preferred stock outstanding at March 31, 2020 and December 31, 2019. Common Stock As of March 31, 2020 and December 31, 2019, the Company was authorized to issue 150,000,000 shares of its common stock, $0.0001 par value per share, and 86,345,313 and 59,318,355 shares of common stock were outstanding as of March 31, 2020 and December 31, 2019, respectively. After giving effect to shares reserved for outstanding warrants and awards issued under the Company’s equity incentive plans, as of March 31, 2020, there were 54,429,673 shares of common stock available for issuance. On February 11, 2020, the Company completed an underwritten public offering of 23,500,000 shares of its common stock for gross proceeds of $82.3 million. On February 21, 2020, the Company sold an additional 3,525,000 shares pursuant to the underwriters’ exercise of their option to purchase additional shares of the Company’s common stock for additional gross proceeds of $12.3 million. The Company received net proceeds, after underwriting discounts and other expenses associated with the offering, of approximately $88.7 million. Warrants At March 31, 2020, the Company had outstanding warrants to purchase an aggregate of 2,138,160 shares of common stock, with a weighted average exercise price of $3.81 per share and expiration dates ranging between June 2022 and May 2029. Equity Incentive Plans The fair value of stock options granted under the Company’s 2007 Employee Stock Option Plan (the “2007 Plan”) and 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 three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Expected term 5.8 - 6.3 years 5.8 - 6.3 years Volatility 62 % 61% Dividend yield 0.0 0.0 Risk-free interest rate 0.47-1.68 % 2.25-2.63% During the three months ended March 31, 2020, the Company granted Restricted Stock Units (“RSUs”) to members of the Company’s Board of Directors and to certain management employees of the Company. The total RSUs granted during the period represent an aggregate of 341,000 shares of the Company’s common stock, 7,500 of which were forfeited during the period. The RSUs vest semi-annually over a period of one year for directors and annually over a period of 4 years for employees. The market price of the Company’s common stock as of the date the awards were granted ranged from $2.59 to $2.92 per share. At March 31, 2020, there were 333,500 RSUs outstanding. During the three months ended March 31, 2020 and 2019, the Company granted options to purchase an aggregate of 1,158,900 and 1,335,850 shares of common stock, respectively, to its directors, employees and certain third party service providers. The weighted average remaining contractual life of stock options outstanding and expected to vest at March 31, 2020 is 7.2 years. The weighted average remaining contractual life of stock options exercisable at March 31, 2020 is 5.9 years. A summary of the Company’s option activity under the 2007 Plan and 2014 Plan and related information is as follows: Shares Weighted Average Exercise Price Balance at December 31, 2019 5,630,351 $ 4.76 Forfeited (29,087 ) $ 3.65 Expired (4,852 ) $ 4.60 Granted 1,158,900 $ 2.96 Exercised (1,958 ) $ 3.67 Balance at March 31, 2020 6,753,354 $ 4.46 Options exercisable 3,780,306 $ 5.29 Stock-based compensation expense for the three months ended March 31, 2020 and 2019 is as follows: 2020 2019 Research and development $ 93,574 $ 86,523 Plasma centers 7,244 11,540 Selling, general and administrative 523,889 498,471 Cost of product revenue 51,841 40,729 Total stock-based compensation expense $ 676,548 $ 637,263 As of March 31, 2020, the Company had $5.7 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 2.7 years. |
8. RELATED PARTY TRANSACTIONS
8. RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
8. RELATED PARTY TRANSACTIONS | The Company leases an office building and equipment from Areth, LLC (“Areth”) pursuant to an agreement for services effective as of January 1, 2016, as amended from time to time. Effective October 1, 2017, monthly rent on this facility was set at $10,000. On November 7, 2019, an additional amendment was entered into between Areth and the Company to extend the term of this agreement through September 30, 2020, and to provide for automatic one-year renewals unless ADMA gives written notice of termination to Areth 60 days prior to the end of the term. Rent expense for the three months ended March 31, 2020 and 2019 amounted to $30,000. Areth is a company controlled by Dr. Jerrold B. Grossman, the Vice Chairman of the Company’s Board of Directors, and Adam S. Grossman, the Company’s President and Chief Executive Officer. The Company also reimburses Areth for office and building related (common area) expenses, equipment and certain other operational expenses, which were not material to the consolidated financial statements for the three months ended March 31, 2020 and 2019. See Note 6 for a discussion of the Company’s credit facility and related transactions with Perceptive, a holder of more than 10% of the Company’s common stock. In connection with the February 2020 public offering of the Company’s common stock (see Note 7), on February 11, 2020: (i) Lawrence P. Guiheen, a director of the Company, purchased 20,000 shares of the Company’s common stock, (ii) James Mond, the Company’s Chief Scientific Officer and Chief Medical Officer, purchased 4,285 shares of the Company’s common stock, (iii) Jerrold B. Grossman, the Company’s Vice Chairman of the Board, purchased 22,857 shares of the Company’s common stock directly and 22,857 shares of the Company’s common stock indirectly through an entity he controls, (iv) Brian Lenz, the Company’s Executive Vice President and Chief Financial Officer, purchased 7,142 shares of the Company’s common stock, (v) Adam S. Grossman, the Company’s President and Chief Executive Officer, purchased 28,571 shares of the Company’s common stock directly and 57,143 shares of the Company’s common stock indirectly through an entity he controls, and (vi) Perceptive Advisors, a principal stockholder of ADMA, purchased 4,563,700 shares of the Company’s common stock through one of its affiliates, all at the public offering price of $3.50 per share. |
9. COMMITMENT AND CONTINGENCIES
9. COMMITMENT AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
9. COMMITMENT AND CONTINGENCIES | General Legal Matters From time to time the Company is or may become subject to certain legal proceedings and claims arising in connection with the normal course of its business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s liquidity, results of operations or financial condition. COVID-19 Pandemic The Company is closely monitoring ongoing developments in connection with the COVID-19 global pandemic, which has the potential to adversely impact several aspects of the Company’s supply-chain operations, including procurement of raw materials and packaging materials, a portion of which are sourced internationally, and the testing of finished drug product that is required prior to its availability for commercial sale. Such testing has been performed to date by contract laboratories outside the United States. To date, the COVID-19 pandemic has not had a material impact on the Company’s financial condition and results of operations, and the Company does not believe that its production operations at the Boca Facility, the Company’s contract fill/finishers or its plasma collection facility have been significantly impacted by the COVID-19 pandemic. As a result, the Company does not anticipate any material impairments with respect to any of its long-lived assets, including the Company’s property and equipment, goodwill or intangible assets. Although the COVID-19 pandemic has not, to date, materially adversely impacted the Company’s capital and financial resources, because the Company is unable to determine the ultimate severity or duration of the outbreak or its long-term effects on, among other things, the global, national or local economies, the capital and credit markets or the Company’s workforce, customers or our suppliers, at this time the Company is unable to predict whether COVID-19 will have a material adverse impact on the Company’s business, financial condition, liquidity and results of operations. Vendor and Licensor Commitments Pursuant to the terms of a plasma purchase agreement with BPC dated as of November 17, 2011 (the “2011 Plasma Purchase Agreement”), the Company agreed to purchase from BPC an annual minimum volume of source plasma containing antibodies to RSV to be used in the manufacture of ASCENIV. The Company must purchase a to-be-determined and agreed upon annual minimum volume from BPC, but may also collect high-titer RSV plasma from up to five wholly-owned ADMA plasma collection facilities. During 2015, the Company and BPC amended the 2011 Plasma Purchase Agreement to allow the Company the ability to collect its raw material RSV high-titer plasma from other third-party collection organizations, thus allowing the Company to expand its reach for raw material supply as it approaches commercialization for ASCENIV. Unless terminated earlier, the 2011 Plasma Purchase Agreement expires in June 2027, after which it may be renewed for two additional five-year periods if agreed to by the parties. As part of the closing of the Biotest Transaction, the parties amended the 2011 Plasma Purchase Agreement to extend the initial term through the ten year anniversary of the closing date of the Biotest Transaction. On December 10, 2018, BPC assigned its rights and obligations under the 2011 Plasma Purchase Agreement to Grifols Worldwide Operations Limited (“Grifols”) as its successor-in-interest, effective January 1, 2019. On January 1, 2019, Grifols and the Company entered into an additional amendment to the 2011 Plasma Purchase Agreement for the purchase of source plasma containing antibodies to RSV from Grifols. Pursuant to this amendment, until January 1, 2022, the Company may purchase RSV plasma from Grifols from the two plasma collection centers that were transferred to BPC on January 1, 2019 at a price equal to cost plus five percent (5%) (without any additional increase due to inflation). On June 6, 2017, the Company and BPC entered into a Plasma Supply Agreement pursuant to which BPC supplies, on an exclusive basis subject to certain exceptions, to ADMA BioManufacturing an annual minimum volume of hyperimmune plasma that contain antibodies to the hepatitis B virus for the manufacture of Nabi-HB. The Plasma Supply Agreement has a 10-year term. On July 19, 2018, the Company and BPC entered into an amendment to the Plasma Supply Agreement to provide, among other things, that in the event BPC elects not to supply in excess of ADMA BioManufacturing’s specified amount of Hepatitis B plasma and ADMA BioManufacturing is unable to secure Hepatitis B plasma from a third party at a price that is within a low double digit percentage of the price that ADMA BioManufacturing pays to BPC, then BPC shall reimburse ADMA BioManufacturing for the difference in price ADMA BioManufacturing incurs. On December 10, 2018, BPC assigned its rights and obligations under the Plasma Supply Agreement to Grifols, effective January 1, 2019. On June 6, 2017, the Company and BPC entered into a Plasma Purchase Agreement (the “2017 Plasma Purchase Agreement”), pursuant to which ADMA BioManufacturing purchases normal source plasma from BPC at agreed upon annual quantities and prices. The 2017 Plasma Purchase Agreement has an initial term of five years after which the 2017 Plasma Purchase Agreement may be renewed for additional two terms of two years each upon the mutual written consent of the parties. On July 19, 2018, the Company and BPC entered into an amendment to the 2017 Plasma Purchase Agreement to, among other things, provide agreed upon amounts of normal source plasma to be supplied by BPC to ADMA BioManufacturing in calendar year 2019 at a specified price per liter, provided that ADMA BioManufacturing delivers a valid purchase order to BPC. Additionally, pursuant to the amendment to the 2017 Plasma Purchase Agreement, BPC agrees that, for calendar years 2020 and 2021, it shall supply no less than a high double digit percentage of ADMA BioManufacturing’s requested NSP amounts, provided that such requested normal source plasma amounts are within an agreed range, at a price per liter to be mutually determined. Furthermore, pursuant to the amendment to the 2017 Plasma Purchase Agreement, in the event BPC fails to supply ADMA BioManufacturing with at least a high double digit percentage of ADMA BioManufacturing’s requested normal source plasma amounts, BPC shall promptly reimburse ADMA BioManufacturing the difference in price ADMA BioManufacturing incurs due to BPC’s election not to supply NSP to ADMA BioManufacturing in such amounts as requested. On December 10, 2018, BPC assigned its rights and obligations under the Plasma Purchase Agreement to Grifols, effective January 1, 2019. The Company purchases substantially all of its raw material plasma from Grifols. For the three months ended March 31, 2020, plasma purchases from Grifols totaled approximately $2.0 million, representing approximately 46% of the Company’s total inventory purchases. For the three months ended March 31, 2019, plasma purchases from BPC totaled $0.2 million, or approximately 11% of the Company’s total inventory purchases. Post-marketing commitments In connection with the approval of the BLA for BIVIGAM, on December 19, 2012 Biotest committed to perform two additional post-marketing studies, a pediatric study to evaluate the efficacy and safety of BIVIGAM in children and adolescents, and a post-authorization safety study to further assess the potential risk of hypotension and hepatic and renal impairment in BIVIGAM-treated patients with primary humoral immunodeficiency. These studies are still pending completion, as such ADMA has assumed the remaining obligations, and the costs of the studies will be expensed as incurred as research and development expenses. The Company currently expects both studies to be completed by the end of 2021. In connection with the FDA’s approval of ASCENIV on April 1, 2019, the Company is required to perform a pediatric study to evaluate the safety and efficacy of ASCENIV in children and adolescents. This study is required to be completed by June of 2023. Employment contracts The Company has entered into employment agreements with its executive management team consisting of its President and Chief Executive Officer, its Executive Vice President, Chief Medical Officer and Chief Scientific Officer and its Executive Vice President and Chief Financial Officer. Other commitments In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of March 31, 2020. The Company does not anticipate recognizing any significant losses relating to these arrangements. |
10. SEGMENTS
10. SEGMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
10. SEGMENTS | The Company is engaged in the manufacture, marketing and development of specialty plasma-derived biologics. The Company’s ADMA BioManufacturing segment reflects the Company’s immune globulin manufacturing, commercial and development operations in Boca Raton, FL, acquired on June 6, 2017 (see Note 1). The Plasma Collection Centers segment consists of one FDA-licensed source plasma collection facility, with two additional plasma collection centers currently under construction. The Corporate segment includes general and administrative overhead expenses. The Company defines its segments as those business units whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to analyze performance and allocate resources. The Company’s CODM is its President and Chief Executive Officer. Summarized financial information concerning reportable segments is shown in the following tables: Three Months Ended March 31, 2020 ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 7,743,275 $ 2,420,761 $ 35,708 $ 10,199,744 Cost of product revenue 14,451,954 2,377,272 — 16,829,226 Loss from operations (12,476,144 ) (457,155 ) (3,836,487 ) (16,769,786 ) Interest and other expense, net (238,873 ) — (2,236,571 ) (2,475,444 ) Net loss (12,715,017 ) (457,155 ) (6,073,058 ) (19,245,230 ) Capital expenditures 1,914,614 160,262 — 2,074,876 Depreciation and amortization expense 674,973 111,289 2,576 788,838 Total assets 104,645,897 5,376,807 100,501,123 210,523,827 Three Months Ended March 31, 2019 ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 1,343,983 $ 2,148,898 $ 35,708 $ 3,528,589 Cost of product revenue 7,940,346 1,464,833 — 9,405,179 (Loss) income from operations (10,620,807 ) 29,579 (2,617,188 ) (13,208,416 ) Interest and other (expense) income, net (169,613 ) 13,620 (1,268,472 ) (1,424,465 ) Gain on transfer of plasma center assets — 11,527,421 — 11,527,421 Loss on extinguishment of debt — — (9,962,495 ) (9,962,495 ) Net (loss) income (10,790,420 ) 11,570,620 (13,848,155 ) (13,067,955 ) Capital expenditures 110,453 — — 110,453 Depreciation and amortization expense 687,393 114,241 3,696 805,330 Total assets 57,529,070 4,038,367 16,552,533 78,119,970 |
11. TRANSFER OF PLASMA CENTER A
11. TRANSFER OF PLASMA CENTER ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Transfer Of Plasma Center Assets | |
11. TRANSFER OF PLASMA CENTER ASSETS | As part of the purchase price for the Biotest Transaction (see Note 1), the Company transferred its Marietta, GA and Norcross, GA plasma collection centers to BPC effective January 1, 2019. The Company had estimated the combined fair value of the two facilities to be $12.6 million, and the Company recorded an obligation for this amount as of the date of the Biotest Transaction. On January 1, 2019, upon the transfer of the two plasma collection facilities to BPC, the Company recorded a gain in the amount of $11.5 million, which reflects the derecognition of the obligation to transfer ownership of the two facilities net of the carrying value of the assets associated with these facilities, primarily property and equipment and inventory, in the amount of $1.1 million. |
12. LEASE OBLIGATIONS
12. LEASE OBLIGATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
12. LEASE OBLIGATIONS | The Company leases certain properties and equipment for its ADMA Bio Centers subsidiary and certain equipment for its ADMA BioManufacturing subsidiary, which leases provide the right to use the underlying assets and require lease payments through the respective lease terms which expire at various dates through 2030. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other leases are recorded on the balance sheet with assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. Right-to-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of the lease payments is determined using the Company’s incremental borrowing rate of 13%. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is reflected in Plasma center operating expenses and Selling, general and administrative expenses. Aggregate lease expense and cash paid for the Company’s operating leases for the three months ended March 31, 2020 and 2019 was $0.1 million. In connection with the adoption of ASU 2016-02 on January 1, 2019 (see Note 2), the Company recognized right to use assets of $1.4 million and lease liabilities of approximately $1.6 million. On July 11, 2019, the Company entered into a new property lease where the Company intends to construct a new plasma collection facility, and the lease commencement date for this property was February 1, 2020. In connection with this lease the Company recognized a lease liability and corresponding right-to-use asset in the amount $0.5 million. The right-to-use assets are reflected in Deposits and other assets in the accompanying consolidated balance sheets. Including a finance lease the Company entered into in June 2018, the Company has aggregate lease liabilities of $2.0 million and $1.5 million as of March 31, 2020 and December 31, 2019, respectively, which are comprised primarily of the lease for the Company’s plasma collection centers and an administrative office lease in Roswell, GA related to the Company’s ADMA Bio Centers subsidiary. The Company’s operating leases have a weighted average remaining term of 7.5 years. Scheduled payments under the Company’s lease obligations are as follows: Remainder of 2020 $ 320,128 Year ended December 31, 2021 481,708 2022 480,982 2023 461,853 2024 417,721 Thereafter 978,007 Total payments 3,140,399 Less: imputed interest (1,114,773 ) Current portion (193,987 ) Balance at March 31, 2020 $ 1,831,639 As of April 15, 2020, the Company had entered into two additional property leases where the Company intends to construct new plasma collection facilities. The Company has not taken possession of these two leased properties and their lease commencement dates have not been determined. With the exception of advance deposits and initial months’ rent totaling approximately $63,000, no payments have been made under these leases. The initial terms of each lease are from 10 to 11 years with monthly rental payments varying between approximately $13,000 and $27,000, including common area maintenance charges. |
13. SUPPLEMENTAL DISCLOSURE OF
13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | Supplemental cash flow information for the three months ended March 31, 2020 and 2019 is as follows: 2020 2019 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 2,017,866 $ 1,369,939 Noncash Financing and Investing Activities: Equipment acquired reflected in accounts payable and accrued liabilities $ 2,340,337 $ 35,823 Right-to-use assets obtained in exchange for lease obligations $ 545,630 $ 1,404,281 Warrants issued in connection with notes payable $ — $ 2,699,208 |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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, 2019 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2020. The accompanying consolidated balance sheet as of December 31, 2019 was derived from the audited financial statements for the year ended December 31, 2019. 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 March 31, 2020 and its results of operations, changes in equity and cash flows for the three months ended March 31, 2020. During the three months ended March 31, 2020 and 2019, 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 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 6) approximates fair value due to the variable interest rate on this debt. With respect to the subordinated note payable in the amount of $15.0 million as of March 31, 2020 and December 31, 2019, which is held by Biotest, a principal stockholder of the Company at the time the note was issued and was issued concurrent with an acquisition transaction with an affiliate of such stockholder (see Note 6), the Company has concluded that an estimation of fair value for this note is not practicable. |
Accounts receivable | A ccounts receivable is reported at realizable value, net of allowances for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. The Company extends credit to its customers based upon an evaluation of each customer's financial condition and credit history. Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis. Based on these evaluations, the Company has concluded that the credit risk is minimal. At March 31, 2020, three customers accounted for an aggregate of 84% of the Company’s total accounts receivable, and at December 31, 2019, two customers accounted for 89% of the Company’s total accounts receivable. |
Inventories | 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. Due to previous uncertainties surrounding certain prior submissions made to the FDA, all costs related to the production of BIVIGAM and ASCENIV prior to their FDA approval dates of May 9, 2019 and April 1, 2019, respectively, have been charged to cost of product revenue in the accompanying consolidated statements of operations. |
Goodwill | Goodwill represents the excess of purchase price over the fair value of net assets acquired by the Company. Goodwill at March 31, 2020 and December 31, 2019 was $3.5 million. All of the Company’s goodwill is attributable to the acquisition of its ADMA BioManufacturing business segment. 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, 2019 did not result in a goodwill impairment charge, and the Company did not record any impairment charges related to goodwill for the three months ended March 31, 2020 and 2019. |
Impairment of long-lived assets | The Company assesses the recoverability of its long-lived assets, which include property and equipment and definite-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 months ended March 31, 2020 and 2019, the Company determined that there was no impairment of its long-lived assets. |
Revenue recognition | Revenues for the three months ended March 31, 2020 and 2019 are comprised of (i) revenues from the sale of the Company’s immunoglobulin products, ASCENIV, BIVIGAM and Nabi-HB, (ii) product revenues from the sale of human plasma collected from the Company’s Plasma Collection Centers business segment, (iii) contract manufacturing revenue, (iv) revenues from the sale of intermediate by-products; and (v) license and other revenues primarily attributable to the out-licensing of ASCENIV to Biotest in 2012 to market and sell this product in Europe and selected countries in North Africa and the Middle East. Biotest has provided the Company with certain services and financial payments in accordance with the related Biotest license agreement and is obligated to pay the Company certain amounts in the future if certain milestones are achieved. Deferred revenue is recognized over the term of the Biotest license. Deferred revenue is amortized into income for a period of approximately 22 years, the term of the Biotest license agreement. 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 three months ended March 31, 2020, three customers represented an aggregate of 82% of the Company’s consolidated revenues. For the three months ended March 31, 2019, two customers represented an aggregate of 81% of the Company’s consolidated revenues. |
Cost of product revenue | Cost of product revenue includes expenses related to process development as well as 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. 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 as the Company reported a net loss for all periods presented. For the three months ended March 31, 2020 and 2019, the following securities were excluded from the calculation of diluted loss per common share because of their anti-dilutive effects: For the Three Months Ended March 31, 2020 2019 Stock options 6,753,354 5,599,435 Restricted stock units 333,500 — Warrants 2,138,160 1,888,160 9,225,014 7,487,595 |
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 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) |
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 2015 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 fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of March 31, 2020 and December 31, 2019, and during the three months ended March 31, 2020 and 2019, the Company recognized no adjustments for uncertain tax positions. |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of dilutive securities | For the Three Months Ended March 31, 2020 2019 Stock options 6,753,354 5,599,435 Restricted stock units 333,500 — Warrants 2,138,160 1,888,160 9,225,014 7,487,595 |
3. INVENTORIES (Tables)
3. INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | March 31, December 31, Raw materials $ 29,717,087 $ 33,381,806 Work-in-progress 17,139,411 14,455,665 Finished goods 5,432,305 5,227,263 Total inventories $ 52,288,803 $ 53,064,734 |
4. INTANGIBLE ASSETS (Tables)
4. INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | March 31, 2020 December 31, 2019 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Trademark and other intangible rights related to Nabi-HB $ 4,100,046 $ 1,659,542 $ 2,440,504 $ 4,100,046 $ 1,513,112 $ 2,586,934 Rights to intermediates 907,421 367,289 540,132 907,421 334,881 572,540 Customer contract 1,076,557 1,076,557 — 1,076,557 1,076,557 — $ 6,084,024 $ 3,103,388 $ 2,980,636 $ 6,084,024 $ 2,924,550 $ 3,159,474 |
Intangible asset future aggregate amortization expense | Remainder of 2020 $ 536,514 2021 715,352 2022 715,352 2023 715,352 2024 298,066 |
5. PROPERTY AND EQUIPMENT (Tabl
5. PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, 2020 December 31, 2019 Manufacturing and laboratory equipment $ 9,524,749 $ 8,831,817 Office equipment and computer software 2,220,856 1,690,248 Furniture and fixtures 1,133,132 582,088 Construction in process 6,022,188 4,285,915 Leasehold improvements 1,673,084 1,673,084 Land 4,339,441 4,339,441 Buildings and building improvements 16,480,277 16,063,680 41,393,727 37,466,273 Less: Accumulated depreciation (6,332,932 ) (5,724,956 ) Total property and equipment, net $ 35,060,795 $ 31,741,317 |
6. DEBT (Tables)
6. DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of notes payable | March 31, 2020 December 31, 2019 Notes payable $ 85,000,000 $ 72,500,000 Less: Debt discount (3,787,910 ) (4,208,837 ) Senior notes payable $ 81,212,090 $ 68,291,163 |
Summary of subordinated note payable | March 31, 2020 December 31, 2019 Subordinated note payable to Biotest $ 15,000,000 $ 15,000,000 Less: Debt discount (83,163 ) (91,947 ) Subordinated note payable $ 14,916,837 $ 14,908,053 |
7. STOCKHOLDERS' EQUITY (Tables
7. STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
Schedule of assumptions | Three Months Ended March 31, 2020 2019 Expected term 5.8 - 6.3 years 5.8 - 6.3 years Volatility 62 % 61% Dividend yield 0.0 0.0 Risk-free interest rate 0.47-1.68 % 2.25-2.63% |
Schedule of stock option activity | Shares Weighted Average Exercise Price Balance at December 31, 2019 5,630,351 $ 4.76 Forfeited (29,087 ) $ 3.65 Expired (4,852 ) $ 4.60 Granted 1,158,900 $ 2.96 Exercised (1,958 ) $ 3.67 Balance at March 31, 2020 6,753,354 $ 4.46 Options exercisable 3,780,306 $ 5.29 |
Stock-based compensation expense | 2020 2019 Research and development $ 93,574 $ 86,523 Plasma centers 7,244 11,540 Selling, general and administrative 523,889 498,471 Cost of product revenue 51,841 40,729 Total stock-based compensation expense $ 676,548 $ 637,263 |
10. SEGMENTS (Tables)
10. SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summarized segment financial information | Three Months Ended March 31, 2020 ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 7,743,275 $ 2,420,761 $ 35,708 $ 10,199,744 Cost of product revenue 14,451,954 2,377,272 — 16,829,226 Loss from operations (12,476,144 ) (457,155 ) (3,836,487 ) (16,769,786 ) Interest and other expense, net (238,873 ) — (2,236,571 ) (2,475,444 ) Net loss (12,715,017 ) (457,155 ) (6,073,058 ) (19,245,230 ) Capital expenditures 1,914,614 160,262 — 2,074,876 Depreciation and amortization expense 674,973 111,289 2,576 788,838 Total assets 104,645,897 5,376,807 100,501,123 210,523,827 Three Months Ended March 31, 2019 ADMA BioManufacturing Plasma Collection Centers Corporate Consolidated Revenues $ 1,343,983 $ 2,148,898 $ 35,708 $ 3,528,589 Cost of product revenue 7,940,346 1,464,833 — 9,405,179 (Loss) income from operations (10,620,807 ) 29,579 (2,617,188 ) (13,208,416 ) Interest and other (expense) income, net (169,613 ) 13,620 (1,268,472 ) (1,424,465 ) Gain on transfer of plasma center assets — 11,527,421 — 11,527,421 Loss on extinguishment of debt — — (9,962,495 ) (9,962,495 ) Net (loss) income (10,790,420 ) 11,570,620 (13,848,155 ) (13,067,955 ) Capital expenditures 110,453 — — 110,453 Depreciation and amortization expense 687,393 114,241 3,696 805,330 Total assets 57,529,070 4,038,367 16,552,533 78,119,970 |
12. LEASE OBLIGATIONS (Tables)
12. LEASE OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of future minimum lease payments | Remainder of 2020 $ 320,128 Year ended December 31, 2021 481,708 2022 480,982 2023 461,853 2024 417,721 Thereafter 978,007 Total payments 3,140,399 Less: imputed interest (1,114,773 ) Current portion (193,987 ) Balance at March 31, 2020 $ 1,831,639 |
13. SUPPLEMENTAL DISCLOSURE O_2
13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information | 2020 2019 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 2,017,866 $ 1,369,939 Noncash Financing and Investing Activities: Equipment acquired reflected in accounts payable and accrued liabilities $ 2,340,337 $ 35,823 Right-to-use assets obtained in exchange for lease obligations $ 545,630 $ 1,404,281 Warrants issued in connection with notes payable $ — $ 2,699,208 |
1. ORGANIZATION AND BUSINESS (D
1. ORGANIZATION AND BUSINESS (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash and cash equivalents | $ 101,235,699 | $ 26,752,135 |
Accumulated deficit | $ (283,961,785) | $ (264,716,555) |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Potentially dilutive securities | 9,225,014 | 7,487,595 |
Stock Options | ||
Potentially dilutive securities | 6,753,354 | 5,599,435 |
Restricted stock units | ||
Potentially dilutive securities | 333,500 | 0 |
Warrants | ||
Potentially dilutive securities | 2,138,160 | 1,888,160 |
2. SUMMARY OF SIGNIFICANT ACC_5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Goodwill | $ 3,529,509 | $ 3,529,509 |
3. INVENTORIES (Details)
3. INVENTORIES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 29,717,087 | $ 33,381,806 |
Work-in-process | 17,139,411 | 14,455,665 |
Finished goods | 5,432,305 | 5,227,263 |
Total inventories | $ 52,288,803 | $ 53,064,734 |
4. INTANGIBLE ASSETS (Details)
4. INTANGIBLE ASSETS (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Cost | $ 6,084,024 | $ 6,084,024 |
Accumulated amortization | 3,103,388 | 2,924,550 |
Net | 2,980,636 | 3,159,474 |
Trademark and other intangible rights related to Nabi-HB | ||
Cost | 4,100,046 | 4,100,046 |
Accumulated amortization | 1,659,542 | 1,513,112 |
Net | 2,440,504 | 2,586,934 |
Right to intermediates | ||
Cost | 907,421 | 907,421 |
Accumulated amortization | 367,289 | 334,881 |
Net | 540,132 | 572,540 |
Customer contract | ||
Cost | 1,076,557 | 1,076,557 |
Accumulated amortization | 1,076,557 | 1,076,557 |
Net | $ 0 | $ 0 |
4. INTANGIBLE ASSETS (Details 1
4. INTANGIBLE ASSETS (Details 1) | Mar. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2020 | $ 536,514 |
2021 | 715,352 |
2022 | 715,352 |
2023 | 715,352 |
2024 | $ 298,066 |
5. PROPERTY AND EQUIPMENT (Deta
5. PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, plant and equipment, gross | $ 41,393,727 | $ 37,466,273 |
Less: accumulated depreciation and amortization | (6,332,932) | (5,724,956) |
Property, plant and equipment, net | 35,060,795 | 31,741,317 |
Manufacturing and laboratory equipment | ||
Property, plant and equipment, gross | 9,524,749 | 8,831,817 |
Office equipment and computer software | ||
Property, plant and equipment, gross | 2,220,856 | 1,690,248 |
Furniture and fixtures | ||
Property, plant and equipment, gross | 1,133,132 | 582,088 |
Construction in process | ||
Property, plant and equipment, gross | 6,022,188 | 4,285,915 |
Leasehold improvements | ||
Property, plant and equipment, gross | 1,673,084 | 1,673,084 |
Land | ||
Property, plant and equipment, gross | 4,339,441 | 4,339,441 |
Buildings | ||
Property, plant and equipment, gross | $ 16,480,277 | $ 16,063,680 |
5. PROPERTY AND EQUIPMENT (De_2
5. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 600,000 | $ 600,000 |
6. DEBT (Details)
6. DEBT (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Notes payable | $ 85,000,000 | $ 72,500,000 |
Less: | ||
Debt discount | (3,787,910) | (4,208,837) |
Senior notes payable | $ 81,212,090 | $ 68,291,163 |
6. DEBT (Details 1)
6. DEBT (Details 1) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Subordinated note payable to Biotest | $ 15,000,000 | $ 15,000,000 |
Less: | ||
Debt discount | (83,163) | (91,947) |
Subordinated note payable | $ 14,916,837 | $ 14,908,053 |
7. STOCKHOLDERS' EQUITY (Detail
7. STOCKHOLDERS' EQUITY (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
STOCKHOLDERS' EQUITY | ||
Expected term, minimum | 5 years 9 months 18 days | 5 years 9 months 18 days |
Expected term, maximum | 6 years 3 months 18 days | 6 years 3 months 18 days |
Volatility | 62.00% | 61.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate, minimum | 0.47% | 2.25% |
Risk-free interest rate, maximum | 1.68% | 2.63% |
7. STOCKHOLDERS' EQUITY (Deta_2
7. STOCKHOLDERS' EQUITY (Details 1) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Outstanding at beginning of period | shares | 5,630,351 |
Forfeited | shares | (29,087) |
Expired | shares | (4,852) |
Granted | shares | 1,158,900 |
Exercised | shares | (1,958) |
Outstanding at end of period | shares | 6,753,354 |
Options exercisable | shares | 3,780,306 |
Weighted Average Exercise Price | |
Outstanding at beginning of period | $ / shares | $ 4.76 |
Forfeited | $ / shares | 3.65 |
Expired | $ / shares | 4.60 |
Granted | $ / shares | 2.96 |
Exercised | $ / shares | 3.67 |
Outstanding at end of period | $ / shares | 4.46 |
Options exercisable | $ / shares | $ 5.29 |
7. STOCKHOLDERS' EQUITY (Deta_3
7. STOCKHOLDERS' EQUITY (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total stock-based compensation expense | $ 676,548 | $ 637,263 |
Research and development | ||
Total stock-based compensation expense | 93,574 | 86,523 |
Plasma centers | ||
Total stock-based compensation expense | 7,244 | 11,540 |
Selling, general and administrative | ||
Total stock-based compensation expense | 523,889 | 498,471 |
Cost of product revenue | ||
Total stock-based compensation expense | $ 51,841 | $ 40,729 |
7. STOCKHOLDERS' EQUITY (Deta_4
7. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 86,345,313 | 59,318,355 |
Common stock, outstanding | 86,345,313 | 59,318,355 |
Unrecognized compensation expense | $ 5,700,000 | |
Unrecognized compensation expense recognition period | 2 years 8 months 12 days |
10. SEGMENTS (Details)
10. SEGMENTS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues | $ 10,199,744 | $ 3,528,589 | |
Cost of product revenue | 16,829,226 | 9,405,179 | |
Loss from operations | (16,769,786) | (13,208,416) | |
Interest and other (expense) income, net | (2,475,444) | (1,424,465) | |
Gain on transfer of plasma center assets | 0 | 11,527,421 | |
Loss on extinguishment of debt | 0 | (9,962,495) | |
Net (loss) income | (19,245,230) | (13,067,955) | |
Purchase of property and equipment | 2,074,876 | 110,453 | |
Depreciation and amortization | 788,838 | 805,330 | |
Total assets | 210,523,827 | 78,119,970 | $ 127,090,725 |
ADMA BioManufacturing | |||
Revenues | 7,743,275 | 1,343,983 | |
Cost of product revenue | 14,451,954 | 7,940,346 | |
Loss from operations | (12,476,144) | (10,620,807) | |
Interest and other (expense) income, net | (238,873) | (169,613) | |
Gain on transfer of plasma center assets | 0 | 0 | |
Loss on extinguishment of debt | 0 | 0 | |
Net (loss) income | (12,715,017) | (10,790,420) | |
Purchase of property and equipment | 1,914,614 | 110,453 | |
Depreciation and amortization | 674,973 | 687,393 | |
Total assets | 104,645,897 | 57,529,070 | |
Plasma Collection Centers | |||
Revenues | 2,420,761 | 2,148,898 | |
Cost of product revenue | 2,377,272 | 1,464,833 | |
Loss from operations | (457,155) | 29,579 | |
Interest and other (expense) income, net | 0 | 13,620 | |
Gain on transfer of plasma center assets | 0 | 11,527,421 | |
Loss on extinguishment of debt | 0 | 0 | |
Net (loss) income | (457,155) | 11,570,620 | |
Purchase of property and equipment | 160,262 | 0 | |
Depreciation and amortization | 111,289 | 114,241 | |
Total assets | 5,376,807 | 4,038,367 | |
Corporate | |||
Revenues | 35,708 | 35,708 | |
Cost of product revenue | 0 | 0 | |
Loss from operations | (3,836,487) | (2,617,188) | |
Interest and other (expense) income, net | (2,236,571) | (1,268,472) | |
Gain on transfer of plasma center assets | 0 | 0 | |
Loss on extinguishment of debt | 0 | (9,962,495) | |
Net (loss) income | (6,073,058) | (13,848,155) | |
Purchase of property and equipment | 0 | 0 | |
Depreciation and amortization | 2,576 | 3,696 | |
Total assets | $ 100,501,123 | $ 16,552,533 |
12. LEASE OBLIGATIONS (Details)
12. LEASE OBLIGATIONS (Details) | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
Remainder of 2020 | $ 320,128 |
2021 | 481,708 |
2022 | 480,982 |
2023 | 461,853 |
2024 | 417,721 |
Thereafter | 978,007 |
Total payments | 3,140,399 |
Less: imputed interest | (1,114,773) |
Current portion | (193,987) |
Total | $ 1,831,639 |
13. SUPPLEMENTAL DISCLOSURE O_3
13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
SUPPLEMENTAL INFORMATION: | ||
Cash paid for interest | $ 2,017,866 | $ 1,369,939 |
Noncash Financing and Inesting Activities: | ||
Equipment acquired reflected in accounts payable and accrued liabilities | 2,340,337 | 35,823 |
Right-to-use assets obtained in exchange for lease obligations | 545,630 | 1,404,281 |
Warrants issued in connection with note payable | $ 0 | $ 2,699,208 |