Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Sep. 30, 2017

On June 6, 2017, ADMA completed the acquisition of the Biotest Assets from BPC. As a result of this transaction, the Company acquired Nabi-HB, Bivigam, the Boca Facility and certain other assets of BTBU. The acquisition of the Biotest Assets expands the Company’s product offering with two FDA-approved products and provides direct control over the manufacturing and regulatory processes impacting the Company’s RI-002 product candidate, including remediation of the Warning Letter as well as certain other remediation items affecting the Boca Facility. Pursuant to the acquisition, the Company issued to Biotest 4,295,580 voting shares of its common stock and 8,591,160 non-voting shares of common stock. The Company will also transfer ownership of two of its plasma centers to Biotest on January 1, 2019 as additional consideration.


The purchase price was calculated as follows:


Issuance of 12,886,740 shares of common stock (voting and non-voting) valued at $3.66 per share   $ 47,165,468  
Transfer of two plasma collection centers     12,621,844  
Total purchase price   $ 59,787,312  


The following table summarizes the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values:


Cash   $ 12,500,000  
Inventory     8,197,354  
Land and buildings     20,000,000  
Property and equipment     8,209,800  
Assets held for sale     845,389  
Other current assets     795,553  
Trademark and other intangible rights to Nabi-HB     4,100,046  
Right to intermediates     907,421  
Customer contract     1,076,557  
Goodwill     3,529,509  
Liabilities assumed     (374,317 )
Total purchase price   $ 59,787,312  


The Company engaged various third party valuation specialists to determine the fair value of the land and buildings, property and equipment, right to intermediates, customer contract and Nabi-HB intangible assets, as well as the assets held for sale. Some of the valuations and underlying analyses that were performed are preliminary and are subject to change upon finalization of more detailed analyses of the facts and circumstances that existed at the date of the transaction. Any such changes would change the allocation of the purchase price. Therefore, the foregoing purchase price allocation is preliminary and subject to change within the measurement period.


Assets held for sale reflects certain manufacturing equipment acquired in the transaction that will not be utilized in the manufacture or development of any of the Company’s current products or product candidates. The Company expects that the sale of these assets will be completed within one year from the date of the acquisition transaction. Goodwill is expected to be deductible for tax purposes.


As a result of the foregoing transaction, BPC became a principal stockholder and Biotest became a related party of the Company. Therefore, all transactions with Biotest subsequent to June 6, 2017, including product and license revenues attributable to Biotest (see Note 2), are related party transactions. The results from BTBU’s operations are included in the Company’s consolidated financial statements from the date of acquisition. The Company incurred a total of approximately $5.8 million in transaction closing costs, which were expensed as incurred as selling, general and administrative expenses in the consolidated statement of operations. For the three and nine months ended September 30, 2017, transaction closing costs amounted to approximately $0.1 million and $3.9 million, respectively.  


The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2016. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition been consummated as of that time or that may result in the future.


    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
       As reported   $ 4,729,411     $ 2,937,863     $ 10,757,683     $ 7,333,493  
       Proforma   $ 4,729,411     $ 19,608,202     $ 29,021,453     $ 63,484,513  
Net loss                                
       As reported   $ (15,202,715 )   $ (4,331,239 )   $ (30,776,173 )   $ (14,956,043 )
       Proforma   $ (15,202,715 )   $ (21,484,499 )   $ (40,029,464 )   $ (51,967,975 )
Basic and diluted net loss per share:                                
       As reported   $ (0.59 )   $ (0.34 )   $ (1.67 )   $ (1.26 )
       Proforma   $ (0.59 )   $ (0.83 )   $ (1.55 )   $ (2.10 )