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STOCKHOLDERS' EQUITY | 6 Months Ended
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Jun. 30, 2020
STOCKHOLDERS' EQUITY |
7. 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 June 30, 2020 and December 31, 2019. Common Stock As of June 30, 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 86,349,981 and 59,318,355 shares of common stock were outstanding as of June 30, 2020 and December 31, 2019, respectively. After giving effect to the 9,265,939 shares reserved for outstanding warrants and awards issued under the Company’s equity incentive plans, as of June 30, 2020 there were 54,384,080 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 June 30, 2020 and December 31, 2019, 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 six months ended June 30, 2020 and 2019:
|  | Six Months Ended June 30, |
|  | 2020 |  |  | 2019 |
Expected term |  | 5.5 - 6.3 years |  |  | 5.8 - 6.3 years |
Volatility |  | 62%-67% |  |  | 54%-62% |
Dividend yield |  | 0.0 |  |  | 0.0 |
Risk-free interest rate |  | 0.38-1.68% |  |  | 1.80-2.92% |
During the six months ended June 30, 2020 and 2019, the Company granted options to purchase an aggregate of 1,232,500 and 1,429,100 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 June 30, 2020 is 6.9 years. The weighted average remaining contractual life of stock options exercisable at June 30, 2020 is 5.6 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 |  |  | (47,683 | ) |  | $ | 3.51 |
Expired |  |  | (6,763 | ) |  | $ | 4.34 |
Granted |  |  | 1,232,500 |  |  | $ | 2.96 |
Exercised |  |  | (6,626 | ) |  | $ | 2.03 |
Balance at June 30, 2020 |  |  | 6,801,779 |  |  | $ | 4.45 |
Options exercisable |  |  | 4,030,098 |  |  | $ | 5.19 |
As of June 30, 2020, the Company had $5.1 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 2.6 years. During the six months ended June 30, 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. The RSUs vest semi-annually over a period of one year for directors and annually over a period of four years for employees. Total compensation expense related to unvested RSUs for the three and six months ended June 30, 2020 was $0.1 million. 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, 2019 |  |  | - |  |  | $ | - |
Granted |  |  | 341,000 |  |  | $ | 2.80 |
Vested |  |  | - |  |  | $ | - |
Forfeited |  |  | (15,000 | ) |  | $ | 2.92 |
Balance at June 30, 2020 |  |  | 326,000 |  |  | $ | 2.80 |
As of June 30, 2020, the Company had $0.8 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 and six months ended June 30, 2020 and 2019 is as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Research and development |  | $ | 105,029 |  |  | $ | 89,543 |  |  | $ | 198,603 |  |  | $ | 176,066 |
Plasma centers |  |  | 8,510 |  |  |  | 13,213 |  |  |  | 15,754 |  |  |  | 24,753 |
Selling, general and administrative |  |  | 539,256 |  |  |  | 569,349 |  |  |  | 1,063,145 |  |  |  | 1,067,820 |
Cost of product revenue |  |  | 62,813 |  |  |  | 54,631 |  |  |  | 114,654 |  |  |  | 95,360 |
Total stock-based compensation expense |  | $ | 715,608 |  |  | $ | 726,736 |  |  | $ | 1,392,156 |  |  | $ | 1,363,999 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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