STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2021

STOCKHOLDERS' EQUITY

8. 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 March 31, 2021 and December 31, 2020.

Common Stock

As of March 31, 2021 and December 31, 2020, the Company was authorized to issue 150,000,000 shares of its common stock, $0.0001 par value per share, and 123,044,981 and 104,902,888 shares of common stock were outstanding as of March 31, 2021 and December 31, 2020, respectively. After giving effect to the 17,080,606 shares reserved for outstanding warrants and awards issued or reserved for future issuance under the Company’s equity incentive plans, as of March 31, 2021 there were 9,874,413 shares of common stock available for issuance. 

On August 5, 2020, the Company entered into the Sale Agreement with Jefferies (see Note 1), 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 an increase in the aggregate offering amount under the Sale Agreement such that, as of February 3, 2021, the Company could sell shares having an aggregate offering price of up to $105.4 million. During the three months ended March 31, 2021, the Company issued and sold 18,080,708 shares of common under the Sale Agreement and received net proceeds of $41.9 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 March 31, 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 three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021		2020
Expected term		5.5 - 6.3 years		5.8 - 6.3 years
Volatility		69%		62%
Dividend yield		0.0		0.0
Risk-free interest rate		0.80-% 1.04%		0.47-1.68%

During the three months ended March 31, 2021 and 2020, the Company granted options to purchase an aggregate of 1,441,050 and 1,158,900 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, 2021 is 7.0 years. The weighted average remaining contractual life of stock options exercisable at March 31, 2021 is 4.8 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		(57,420	)	$	3.40
Expired		(203,396	)	$	5.12
Granted		1,441,050		$	2.35
Exercised		-		$	-
Options outstanding, vested and expected to vest at March 31, 2021		8,103,165		$	4.02
Options exercisable		4,855,296		$	4.81

As of March 31, 2021, the Company had $5.3 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.

During the three months ended March 31, 2021 and 2020, the Company granted Restricted Stock Units (“RSUs”) representing an aggregate of 492,744 and 341,000 shares, respectively, to certain management employees of the Company and to members of its Board of Directors. The RSUs vest annually over a period of four years for employees and semi-annually over a period of one year for directors. Total compensation expense related to unvested RSUs for the three months ended March 31, 2021 and 2020 was $0.1 million and $28,000, respectively. During the three months ended March 31, 2021, 87,750 shares vested in connection with grants of RSUs. With respect to these vested RSUs, 26,365 shares valued at approximately $59,000 were withheld by the Company to cover employees’ tax liabilities. On March 25, 2021, these shares were retired by the Company and were no longer outstanding as of March 31, 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		492,744		$	2.35
Vested		(87,750	)	$	2.81
Forfeited		-		$	-
Balance at March 31, 2021		730,994		$	2.50

As of March 31, 2021, the Company had $1.8 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 3.5 years.

Total stock-based compensation expense for all awards granted under the Company’s equity incentive plans for the three months ended March 31, 2021 and 2020 is as follows:  

	2021		2020
Research and development	$	105,227	$	93,574
Plasma center operating expenses		10,818		7,244
Selling, general and administrative		588,491		523,889
Cost of product revenue		76,861		51,841
Total stock-based compensation expense	$	781,397	$	676,548