STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2023

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, 2023 and December 31, 2022.

Common Stock

As of June 30, 2023 and December 31, 2022, the Company was authorized to issue 300,000,000 shares of its common stock, $0.0001 par value per share, and 224,526,748 and 221,816,930 shares of common stock were outstanding as of June 30, 2023 and December 31, 2022, respectively. After giving effect to the 46,940,501 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of June 30, 2023 there were 28,532,751 shares of common stock available for issuance.

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%. On May 1, 2023 the Company issued the Hayfin Second Amendment Warrants, which were valued at $5.6 million using the Black-Scholes option-pricing model assuming an expected term of seven years, a volatility of 67.8%, a dividend yield of 0% and a risk-free rate of interest of 3.62%.

On May 13, 2023, warrants to purchase 24,800 shares of the Company’s common stock held by a former noteholder of the Company expired in accordance with their terms. On June 16, 2023, various entities affiliated with Hayfin exercised 3,388,686 Hayfin Warrants in a cashless exercise transaction resulting in the Company issuing 1,967,847 shares of its common stock to such entities. At June 30, 2023 and December 31, 2022, the Company had outstanding warrants to purchase an aggregate of 12,502,906 and 13,525,148 shares, respectively, of common stock, with weighted-average exercise prices of $2.32 and $1.99 per share, respectively, with expiration dates ranging between December 2024 and December 2030.

Equity Incentive Plans

The fair value of stock options granted under the Company’s equity incentive plans 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, 2023 and 2022:

	Six Months Ended June 30,
	2023			2022
Expected term	5.5 - 6.3 years			5.5 - 6.3 years
Volatility		68	%		68	%
Dividend yield		0.0			0.0
Risk-free interest rate		4.20-4.24	%		1.72-1.73	%

On June 21, 2022, the Company’s stockholders approved the ADMA Biologics, Inc. 2022 Compensation Plan (the “2022 Equity Plan”), which replaced the ADMA Biologics, Inc. 2014 Omnibus Incentive Compensation 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, 2023 and 2022, the Company granted options to purchase an aggregate of 1,727,510 and 1,194,032 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, 2023 is 6.2 years. The weighted average remaining contractual life of stock options exercisable at June 30, 2023 is 5.0 years. During the six months ended June 30, 2023, options to purchase 178,829 shares of common stock were exercised and the Company received aggregate exercise proceeds of $0.5 million. Also during the six months ended June 30, 2023, options to purchase 5,416 shares of common stock were exercised in a cashless transaction resulting in the issuance of 2,443 shares of common stock.

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, 2022		8,256,211		$	3.37
Forfeited		(76,866	)	$	2.86
Expired		(81,298	)	$	5.72
Granted		1,727,510		$	3.35
Exercised		(184,245	)	$	2.62
Options outstanding, vested and expected to vest at June 30, 2023		9,641,312		$	3.36
Options exercisable		6,690,912		$	3.64

As of June 30, 2023, the Company had $4.9 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 2.9 years.

During the six months ended June 30, 2023 and 2022, the Company granted RSUs representing an aggregate of 2,976,260 and 1,109,266 shares, respectively, to certain 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, 2023, an aggregate of 806,781 shares of common stock vested in connection with grants of RSUs. With respect to these vested RSUs, 246,082 shares valued at approximately $0.9 million were withheld by the Company to cover employees’ tax liabilities. These shares were no longer outstanding as of June 30, 2023. 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, 2022		2,866,987		$	1.59
Granted		2,976,260		$	3.37
Vested		(806,781	)	$	1.64
Forfeited		(217,817	)	$	2.53
Balance at June 30, 2023		4,818,649		$	2.64

As of June 30, 2023, the Company had $11.6 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 3.2 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, 2023 and 2022 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	9,418	$	4,898	$	14,803	$	9,569
Plasma center operating expenses		39,707		19,615		62,762		40,667
Selling, general and administrative		1,410,073		1,068,215		2,388,197		2,585,817
Cost of product revenue		177,840		98,319		281,442		196,382
Total stock-based compensation expense	$	1,637,038	$	1,191,047	$	2,747,204	$	2,832,435