ADMA BIOLOGICS, INC. (NASDAQ:ADMA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

Overview

On May 3, 2019, ADMA Biologics, Inc., a Delaware corporation (the Company), announced that it drew down the full $27.5 million term loan (the Second Tranche) from its existing credit facility with Perceptive Credit Holdings II, LP, as the Companys lender and administrative agent (the Lender). Additionally, on May 3, 2019 (the Amendment Date), in connection with the Companys draw-down of the Second Tranche, the Company announced that it entered into an amendment (the Amendment) to that certain Credit Agreement and Guaranty (the Credit Agreement), dated as of February 11, 2019 (the Agreement Date), with ADMA Plasma Biologics, Inc. (ADMA Plasma Biologics), ADMA Bio Centers Georgia Inc. (ADMA Bio Centers), ADMA BioManufacturing, LLC (ADMA BioManufacturing and together with ADMA Plasma Biologics and ADMA Bio Centers, the Subsidiary Guarantors) and the Lender.

The Amendment provides for an additional term loan in the principal amount of up to $12.5 million (the Third Tranche), to be drawn-down at the Companys sole option and on the same terms as the existing term loans described in the Credit Agreement, which Third Tranche is subject to the satisfaction of certain conditions, including, but not limited to, the U.S. Food and Drug Administrations approval of the Prior Approval Supplement submission for BIVIGAM (Intravenous Immune Globulin [Human], 10%) drug substance and no Material Adverse Changes (as defined therein) having occurred since December 31, 2018; provided, that the Third Tranche may not be drawn-down later than March 31, 2020. The Credit Agreement, together with the Amendment, now provides for a senior secured term loan facility with an aggregate principal amount of up to $85.0 million (collectively, the Credit Facility), comprised of (i) an initial term loan made on the Agreement Date with an outstanding principal amount of $45.0 million, (ii) the Second Tranche made on the Amendment Date with an outstanding principal amount of $27.5 million, as evidenced by the Companys issuance of a promissory note (the Note) in favor of the Lender on the Amendment Date, and (iii) the Third Tranche with an available principal amount of up to $12.5 million. The Credit Facility has a maturity date of March 1, 2022, subject to acceleration to the Credit Agreement, including upon an Event of Default (as defined in the Credit Agreement). Prior to maturity, there will be no scheduled principal payments on the outstanding term loans made under the Credit Facility.

A copy of the press release announcing the Companys draw-down of the Second Tranche and entry into the Amendment is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Fees and Expenses

On the Amendment Date, the Company used certain proceeds of the Second Tranche to pay certain fees and expenses incurred in connection with the Amendment.

Interest Rate

As previously disclosed at the time of entry into the Credit Agreement, borrowings under the Credit Agreement bear interest at a rate per annum equal to 7.5% (the Applicable Margin) plus the greater of (i) one-month LIBOR and (ii) 3.5%; provided, however, that upon, and during the continuance of, an Event of Default, the Applicable Margin shall automatically increase by an additional 400 basis points. On the last day of each month during the term of the Credit Facility, the Company will pay accrued interest to the Lender.

Warrant

As consideration for the Amendment, the Company has issued, on the Amendment Date, a Warrant to Purchase Stock to the Lender (the Warrant). The Warrant has an exercise price equal to $4.64, which is equal to the trailing 10-day volume weighted average price (VWAP) of the Companys common stock, par value $0.0001 per share (the Common Stock), on the business day immediately prior to the Amendment Date. The Warrant is exercisable for 250,000 shares of Common Stock and has an expiration date of May 3, 2029. The Lender represented to the Company, among other things, that it was an accredited investor (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the Securities Act)), and the Company issued the Warrant in reliance upon an exemption from registration contained in Section 4(2) under the Securities Act. The Warrant and the shares of Common Stock issuable thereunder may not be offered, sold, pledged or otherwise transferred in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act.

Other Related Matters

The foregoing summaries of the Amendment, the Note and the Warrant (collectively, the Credit Facility Amendment Agreements) are not complete and are qualified in their entirety by reference to the Credit Facility Amendment Agreements, copies of each of which are filed as exhibits to this Current Report on Form 8-K.

The representations, warranties, and covenants contained in the Credit Facility Amendment Agreements were made solely for purposes of such documents and as of specific dates, were made solely for the benefit of the parties to the applicable documents, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Credit Agreement, as amended by the Amendment, and such other documents instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to stockholders. The Companys stockholders are not third-party beneficiaries under the Credit Facility Amendment Agreements and should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its Subsidiary Guarantors or other affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Credit Facility Amendment Agreements, which subsequent information may or may not be fully reflected in the Companys public disclosure.

To the extent applicable, the disclosures of the material terms and conditions of the Credit Facility Amendment Agreements in Item 1.01 above are incorporated into this Item 2.03 by reference.

To the extent applicable, the disclosure of the material terms and conditions of the Warrant in Item 1.01 above is incorporated into this Item 3.02 by reference.

(d) Exhibits

4.1	Note, dated May 3, 2019, issued by the Company to Perceptive Credit Holdings II, LP.

4.2	Warrant to Purchase Stock, dated May 3, 2019, issued by the Company to Perceptive Credit Holdings II, LP.

10.1	Amendment No. 1 to Credit Agreement and Guaranty, dated as of May 3, 2019, by and among the Company, ADMA Plasma Biologics, Inc., ADMA Bio Centers Georgia Inc., ADMA BioManufacturing, LLC and Perceptive Credit Holdings II, LP.

99.1	ADMA Biologics, Inc. Press Release, dated May 3, 2019.

ADMA BIOLOGICS, INC. Exhibit
EX-4.1 2 e618411_ex4-1.htm   Execution Version   NOTE   U.S. $27,…
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About ADMA BIOLOGICS, INC. (NASDAQ:ADMA)

ADMA Biologics, Inc. is a late-stage biopharmaceutical company that develops, manufactures and intends to market specialty plasma-based biologics for the treatment and prevention of infectious diseases. The Company is engaged in the development and commercialization of human plasma and plasma-derived therapeutics. Its segments include Plasma Collection Centers, which includes its operations in Georgia; Research and Development, which includes its plasma development operations in New Jersey, and Corporate. Its targeted patient populations are immune-compromised individuals suffering from an underlying immune deficiency disorder or may be immune-suppressed for medical reasons. Its product candidates are intended to be used by physician specialists focused on caring for immune-compromised patients at risk of contracting infectious diseases. Its intravenous immunoglobulin product candidate, RI-002, is intended for the treatment of primary immune deficiency disease.