Quarterly report pursuant to Section 13 or 15(d)

7. STOCKHOLDERS' EQUITY

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7. STOCKHOLDERS' EQUITY
3 Months Ended
Mar. 31, 2020
STOCKHOLDERS' EQUITY  
7. 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 March 31, 2020 and December 31, 2019.

 

Common Stock

As of March 31, 2020 and December 31, 2019, the Company was authorized to issue 150,000,000 shares of its common stock, $0.0001 par value per share, and 86,345,313 and 59,318,355 shares of common stock were outstanding as of March 31, 2020 and December 31, 2019, respectively. After giving effect to shares reserved for outstanding warrants and awards issued under the Company’s equity incentive plans, as of March 31, 2020, there were 54,429,673 shares of common stock available for issuance.

 

On February 11, 2020, the Company completed an underwritten public offering of 23,500,000 shares of its common stock for gross proceeds of $82.3 million. On February 21, 2020, the Company sold an additional 3,525,000 shares pursuant to the underwriters’ exercise of their option to purchase additional shares of the Company’s common stock for additional gross proceeds of $12.3 million. The Company received net proceeds, after underwriting discounts and other expenses associated with the offering, of approximately $88.7 million.

 

Warrants

At March 31, 2020, the Company had outstanding warrants to purchase an aggregate of 2,138,160 shares of common stock, with a weighted average exercise price of $3.81 per share and expiration dates ranging between June 2022 and May 2029.

 

Equity Incentive Plans

The fair value of stock options granted under the Company’s 2007 Employee Stock Option Plan (the “2007 Plan”) and 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 three months ended March 31, 2020 and 2019:

    Three Months Ended March 31,
    2020   2019
Expected term   5.8 - 6.3 years   5.8 - 6.3 years
Volatility     62%     61%
Dividend yield     0.0       0.0  
Risk-free interest rate     0.47-1.68%       2.25-2.63%  

 

During the three months ended March 31, 2020, the Company granted Restricted Stock Units (“RSUs”) to members of the Company’s Board of Directors and to certain management employees of the Company. The total RSUs granted during the period represent an aggregate of 341,000 shares of the Company’s common stock, 7,500 of which were forfeited during the period. The RSUs vest semi-annually over a period of one year for directors and annually over a period of 4 years for employees. The market price of the Company’s common stock as of the date the awards were granted ranged from $2.59 to $2.92 per share. At March 31, 2020, there were 333,500 RSUs outstanding.

 

During the three months ended March 31, 2020 and 2019, the Company granted options to purchase an aggregate of 1,158,900 and 1,335,850 shares of common stock, respectively, to its directors, employees and certain third party service providers. The weighted average remaining contractual life of stock options outstanding and expected to vest at March 31, 2020 is 7.2 years. The weighted average remaining contractual life of stock options exercisable at March 31, 2020 is 5.9 years.

 

A summary of the Company’s option activity under the 2007 Plan and 2014 Plan and related information is as follows:

 

    Shares   Weighted Average Exercise Price
Balance at December 31, 2019     5,630,351     $ 4.76  
Forfeited     (29,087 )   $ 3.65  
Expired     (4,852 )   $ 4.60  
Granted     1,158,900     $ 2.96  
Exercised     (1,958 )   $ 3.67  
Balance at March 31, 2020     6,753,354     $ 4.46  
                 
Options exercisable     3,780,306     $ 5.29  

  

Stock-based compensation expense for the three months ended March 31, 2020 and 2019 is as follows:

 

    2020   2019
Research and development   $ 93,574     $ 86,523  
Plasma centers     7,244       11,540  
Selling, general and administrative     523,889       498,471  
Cost of product revenue     51,841       40,729  
Total stock-based compensation expense   $ 676,548     $ 637,263  

 

As of March 31, 2020, the Company had $5.7 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 2.7 years.