LEASE OBLIGATIONS

3 Months Ended

Mar. 31, 2023

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. For all of its leases, the Company has elected and applies the practical expedient available to lessees to combine non-lease components with their related lease components and account for them as a single combined lease component. 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. The Company’s 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 for the Company’s leases for the three months ended March 31, 2023 and 2022 was approximately $0.6 million and $0.4 million, respectively. Cash paid for the Company’s leases for the three months ended March 31, 2023 and 2022 was approximately $0.6 million and $0.4 million, respectively.

Including a finance lease the Company entered into in June 2018, the Company has aggregate lease liabilities of $11.4 million and $11.6 million as of March 31, 2023 and December 31, 2022, respectively, which are comprised primarily of the leases for the Company’s plasma collection centers and a warehouse lease for raw material storage related to the Company’s immunoglobulin manufacturing operations. The Company’s operating leases have a weighted average remaining term of 8.3 years. Scheduled payments under the Company’s lease obligations are as follows:

Remainder of 2023	$	1,805,644
Year ended December 31, 2024		2,343,314
2025		2,366,432
2026		2,116,036
2027		2,040,690
2028		2,087,825
Thereafter		6,150,746
Total payments		18,910,687
Less: imputed interest		(7,486,533	)
Current portion		(956,045	)
Balance at March 31, 2023	$	10,468,109