12.

LEASE OBLIGATIONS

The Company leases certain properties and equipment for its ADMA BioCenters and ADMA BioManufacturing subsidiaries, 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 2033. 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 as of the lease commencement date. For the lease liabilities recognized during the years ended December 31, 2022 and 2021, the Company used discount rates of 13% to 14% to determine the present value of its lease obligations. 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 in the accompanying consolidated statements of operations. Aggregate lease expense for the Company’s operating leases for the years ended December 31, 2022 and 2021 was $2.1 million and $1.4 million, respectively. Aggregate cash paid on these leases for the years ended December 31, 2022 and 2021 was $1.8 million and $1.4 million, respectively.

During the year ended December 31, 2022, the Company recognized additional right-to-use assets and corresponding lease liabilities aggregating to approximately $4.0 million in connection with two new property leases where the Company has opened additional plasma collection facilities, a property lease for the storage of raw materials inventory and a property lease for the building that the Company utilizes as its corporate headquarters (see Note 9). During the year ended December 31, 2021, the Company recognized additional right-to-use assets and corresponding lease liabilities of $3.6 million in connection with four new property leases where the Company has opened additional plasma collection facilities. Including a finance lease the Company entered into in June 2018, the Company has aggregate lease liabilities of $11.6 million and $8.1 million as of December 31, 2022 and 2021, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers. The Company’s operating leases have a weighted average remaining term of 8.4 years. Scheduled payments under the Company’s lease obligations are as follows:

One of the Company’s operating leases, pertaining to the administrative offices for its Plasma Collection Centers business segment, is scheduled to expire in November of 2023. The current monthly payment for this lease is approximately $10,000. The Company intends to renew the lease for an additional five years in accordance with the terms of the lease, however no renewal agreement has been finalized.