Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
 9 Months Ended
Sep. 30, 2021
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 September 30, 2021 and December 31, 2020.
Common Stock

As of September 30, 2021 and December 31, 2020, the Company was authorized to issue 300,000,000 and 150,000,000 shares, respectively, of its common stock, $0.0001 par value per share, and 138,313,817 and 104,902,888 shares of common stock were outstanding as of September 30, 2021 and December 31, 2020, respectively. On May 27, 2021, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation which increased the number of shares of common stock that the Company is authorized to issue from 150,000,000 to 300,000,000. After giving effect to the 16,828,915 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of September 30, 2021 there were 144,641,489 shares of common stock available for issuance.

On August 5, 2020, the Company entered into an open market sale agreement (as amended from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which the Company could offer and sell, from time to time, at its option, through or to Jefferies, up to an aggregate of $50 million of shares of the Company’s common stock. On November 5, 2020 and February 3, 2021, the Company and Jefferies amended the Sale Agreement to provide for increases in the aggregate offering amount under the Sale Agreement such that the Company could sell shares having an aggregate offering price of up to $105.4 million under the Sale Agreement, as amended. During the nine months ended September 30, 2021, the Company issued and sold 27,805,198 shares of common stock under the 2020 Sale Agreement and received net proceeds of $60.4 million. The Sale Agreement was terminated on August 31, 2021.

On September 3, 2021, the Company entered into a distribution agreement with Raymond James & Associates, Inc., as agent (“Agent”), pursuant to which the Company may offer and sell, from time to time, at its option, through or to the Agent, up to an aggregate of $50 million of shares of the Company’s common stock (the “Distribution Agreement”). The Company currently intends to use any net proceeds from the sale of its common stock under the Distribution Agreement for general corporate purposes, including procurement of raw materials, source plasma, supply chain initiatives and production expenditures, funding expansion of plasma centers, working capital, capital expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities. During the nine months ended September 30, 2021, the Company issued 5,540,831 shares of its common stock under the Distribution Agreement and received net proceeds of $6.9 million.


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 September 30, 2021 and December 31, 2020, the Company had outstanding warrants to purchase an aggregate of 4,528,160 shares of common stock, with a weighted average exercise price of $2.82 per share and expiration dates ranging between June 2022 and December 2030.
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 nine months ended September 30, 2021 and 2020:

   
Nine Months Ended September 30,
  
   
2021
    
2020
  
Expected term
  
5.5 - 6.3 years
    
5.5 - 6.3 years
  
Volatility
    
69
%
    
62-69
%
Dividend yield
    
0.0
      
0.0
  
Risk-free interest rate
    
0.80-1.14
%
    
0.33-1.68
%


During the nine months ended September 30, 2021 and 2020, the Company granted options to purchase an aggregate of 1,757,050 and 1,398,412 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 September 30, 2021 is 6.3 years. The weighted average remaining contractual life of stock options exercisable at September 30, 2021 is 5.1 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
  
Options outstanding, vested and expected to vest at December 31, 2020
   
6,922,931
    
$
4.40
  
Forfeited
    
(433,492
)
  
$
2.96
  
Expired
    
(414,867
)
  
$
4.96
  
Granted
    
1,757,050
    
$
2.22
  
Exercised
    
-
    
$
-
  
Options outstanding, vested and expected to vest at September 30, 2021
   
7,831,622
    
$
3.96
  
                 
Options exercisable
    
5,261,720
    
$
4.62
  


As of September 30, 2021, the Company had $3.7 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 2.5 years.

During the nine months ended September 30, 2021 and 2020, the Company granted Restricted Stock Units (“RSUs”) representing an aggregate of 4,332,244 and 361,000 shares, respectively, to certain management employees of the Company and to members of its Board of Directors. Except for the RSUs granted under the Company’s retention incentive program discussed below, the RSUs generally vest annually over a period of four years for employees and semi-annually over a period of one year for directors. On September 28, 2021, the Company implemented a retention incentive program for the Company’s executive management and certain employees (see Note 10), whereby the Company issued an aggregate of 3,780,000 RSUs, of which 2,632,500 are time-based RSUs and 1,147,500 are milestone-based RSUs. Fifty percent of the time-based RSUs granted under the retention bonus program will vest on December 31, 2022, with the remainder vesting in quarterly installments through December 31, 2024. The milestone-based RSUs will vest upon achievement of the applicable milestone, with each milestone required to be achieved on or prior to December 31, 2022. The Company will periodically assess the probability of vesting for each milestone-based RSU and will adjust compensation expense based on its probability assessment.



During the nine months ended September 30, 2021, 92,750 shares vested in connection with grants of RSUs. With respect to these vested RSUs, 27,850 shares valued at approximately $62,000 were withheld by the Company to cover employees’ tax liabilities. These shares have been retired by the Company and were no longer outstanding as of September 30, 2021. 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, 2020
   
326,000
    
$
2.81
  
Granted
    
4,332,244
    
$
1.30
  
Vested
    
(92,750
)
  
$
2.82
  
Forfeited
    
(96,361
)
  
$
2.53
  
Balance at September 30, 2021
   
4,469,133
    
$
1.35
  


As of September 30, 2021, the Company had $5.8 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 2.8 years.

Total stock-based compensation expense for all awards granted under the Company’s equity incentive plans for the three months and nine months ended September 30, 2021 and 2020 is as follows:
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2021
   
2020
   
2021
   
2020
 
Research and development
  
$
1,526
    
$
166,610
    
$
149,232
    
$
365,213
  
Plasma center operating expenses
    
14,150
      
8,579
      
38,605
      
24,333
  
Selling, general and administrative
    
596,084
      
535,949
      
1,850,411
      
1,599,094
  
Cost of product revenue
    
76,514
      
63,646
      
236,612
      
178,300
  
Total stock-based compensation expense
  
$
688,274
    
$
774,784
    
$
2,274,860
    
$
2,166,940