STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2022

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

8. 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 June 30, 2022 and December 31, 2021.

Common Stock

As of June 30, 2022 and December 31, 2021, the Company was authorized to issue 300,000,000 shares of its common stock, $0.0001 par value per share, and 196,356,232 and 195,813,817 shares of common stock were outstanding as of June 30, 2022 and December 31, 2021, respectively. After giving effect to the 50,523,424 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of June 30, 2022 there were 53,120,344 shares of common stock available for issuance.

On September 3, 2021, the Company entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which the Company may offer and sell, from time to time, at its option, through or to the Agent, up to an aggregate of $50 million of shares of the Company’s common stock (the “Distribution Agreement”). The Company intends to use any net proceeds from the sale of common stock under the Distribution Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, funding expansion of plasma collection centers, working capital, capital expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities. The Company currently has approximately $42.8 million of shares available to sell under the Distribution Agreement. There were no sales under the Distribution Agreement during the six months ended June 30, 2022.

On August 5, 2020, the Company entered into an open market sale agreement (as amended from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which the Company could offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $50 million of shares of the Company’s common stock. On November 5, 2020 and February 3, 2021, the Company and Jefferies amended the Sale Agreement to provide for increases in the aggregate offering amount under the Sale Agreement such that the Company could sell shares having an aggregate offering price of up to $105.4 million under the Sale Agreement, as amended. During the six months ended June 30, 2021, the Company issued and sold 26,907,753 shares of common stock under the Sale Agreement and received net proceeds of $59.1 million.

Warrants

In connection with the Hayfin Credit Agreement that the Company entered into on March 23, 2022 (see Note 7), the Company issued the Hayfin Warrants to purchase 9,103,047 shares of the Company’s common stock. The Hayfin Warrants were valued at $9.6 million using the Black-Scholes option-pricing model assuming an expected term of seven years, a volatility of 68.1%, a dividend yield of 0% and a risk-free rate of interest of 2.36%. During the six months ended June 30, 2022, outstanding warrants to purchase 74,309 shares of the Company’s common stock expired in accordance with the terms of the warrants. At June 30, 2022, the Company had outstanding warrants to purchase an aggregate of 13,556,898 shares of common stock, with a weighted-average exercise price of $2.00 per share. At December 31, 2021, the Company had outstanding warrants to purchase an aggregate of 4,528,160 shares of common stock, with a weighted average exercise price of $2.82 per share and expiration dates ranging between June 2022 and December 2030.

Equity Incentive Plans

The fair value of stock options granted under the ADMA Biologics, Inc. 2014 Omnibus Incentive Compensation Plan, as amended and restated (the “2014 Plan”), was determined on the date of grant using the Black-Scholes option valuation model. The Black-Scholes model was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of certain subjective assumptions including the expected stock price volatility. The stock options granted to employees and directors have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate. The following assumptions were used to determine the fair value of options granted during the six months ended June 30, 2022 and 2021:

	Six Months Ended June 30,
	2022			2021
Expected term	5.5 - 6.3 years			5.5 - 6.3 years
Volatility		68	%		69	%
Dividend yield		0.0			0.0
Risk-free interest rate		1.72-1.73	%		0.80-1.14	%

On June 21, 2022, the Company’s stockholders approved the ADMA Biologics, Inc. 2022 Compensation Plan (the “2022 Equity Plan”).  Approval of the 2022 Equity Plan resulted in approximately 18 million additional shares of the Company’s common stock being reserved for future awards. During the six months ended June 30, 2022 and 2021, the Company granted options to purchase an aggregate of 1,194,032 and 1,658,050 shares of common stock, respectively, to its directors and employees.  The weighted average remaining contractual life of stock options outstanding and expected to vest at June 30, 2022 is 6.5 years. The weighted average remaining contractual life of stock options exercisable at June 30, 2022 is 5.4 years.

A summary of the Company’s option activity under the Company’s equity incentive plans and related information is as follows:

	Shares			Weighted Average Exercise Price
Options outstanding, vested and expected to vest at December 31, 2021		7,862,722		$	3.93
Forfeited		(19,371	)	$	2.24
Expired		(533,204	)	$	6.78
Granted		1,194,032		$	1.67
Options outstanding, vested and expected to vest at June 30, 2022		8,504,179		$	3.43
Options exercisable		5,825,013		$	4.04

As of June 30, 2022, the Company had $3.3 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 2.4 years.

During the six months ended June 30, 2022 and 2021, the Company granted RSUs representing an aggregate of 1,109,266 and 542,244 shares, respectively, to certain management employees of the Company and to members of its Board of Directors. These RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors. During the six months ended June 30, 2022, there were 812,016 shares of common stock which vested in connection with grants of RSUs, including 254,745 milestone-based RSUs that vested in connection with the refinancing of the Company’s senior credit facility (see Note 7) and 382,117 milestone-based RSUs that vested in connection with the Company achieving a targeted gross margin for its BIVIGAM product during the six months ended June 30, 2022.With respect to the vested RSUs, 269,601 shares valued at approximately $0.4 million were withheld by the Company to cover employees’ tax liabilities. These shares have been retired by the Company and were no longer outstanding as of June 30, 2022. A summary of the Company’s unvested RSU activity and related information is as follows:

	Shares			Weighted Average Grant Date Fair Value
Balance at December 31, 2021		4,485,133		$	1.34
Granted		1,109,266		$	1.68
Vested		(812,016	)	$	1.41
Forfeited		(40,000	)	$	1.22
Balance at June 30, 2022		4,742,383		$	1.41

As of June 30, 2022, the Company had $5.1 million of unrecognized compensation expense related to unvested RSUs granted under the Company’s equity incentive plans, which is expected to be recognized over a weighted-average period of 2.7 years.

Total stock-based compensation expense for all awards granted under the Company’s equity incentive plans for the three and six months ended June 30, 2022 and 2021 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	4,898	$	42,479	$	9,569	$	147,706
Plasma center operating expenses		19,615		13,637		40,667		24,455
Selling, general and administrative		1,068,215		665,836		2,585,817		1,254,327
Cost of product revenue		98,319		83,237		196,382		160,098
Total stock-based compensation expense	$	1,191,047	$	805,189	$	2,832,435	$	1,586,586