ADMA Biologics, Inc. and Subsidiary (A Development Stage Enterprise) Index Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets

ADMA Biologics, Inc. and Subsidiary

(A Development Stage Enterprise)

Report of Independent Registered Public Accounting Firm

ADMA Biologics, Inc.

We have audited the accompanying consolidated balance sheets of ADMA Biologics, Inc. and Subsidiary (A Development Stage Enterprise) as of December 31, 2010 and 2009, and the related consolidated statements of operations, changes in stockholders' equity (deficiency) and cash flows for the years then ended and the period from June 24, 2004 (date of inception) through December 31, 2010. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ADMA Biologics, Inc. and Subsidiary as of December 31, 2010 and 2009, and their results of operations and cash flows for the years then ended and for the period from June 24, 2004 (date of inception) to December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that ADMA Biologics, Inc. and Subsidiary will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses from operations, has no revenue, and has a working capital and stockholders' deficiency. These matters, among others, raise substantial doubt about its ability to continue as a going concern. Management's plans regarding these matters also are described in Note 1. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Roseland, New Jersey

December 9, 2011, except for the matters discussed in Note 11,

which are as of February 13, 2012

See notes to consolidated financial statements.

See notes to consolidated financial statements.

See notes to consolidated financial statements.

See notes to consolidated financial statements.

ADMA BIOLOGICS, INC. AND SUBSIDIARY

(a development stage enterprise)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2010 AND 2009

ADMA Biologics, Inc. (the "Company"), a development stage enterprise, was incorporated on July 9, 2007, in the State of Delaware. On July 16, 2007, the Company, formerly named ADMA Temp, Inc., entered into an agreement and plan of merger (the "Agreement") with ADMA Biologics, Inc. ("ADMA NJ"), which was incorporated on June 24, 2004 in the State of New Jersey. ADMA NJ was a development stage company engaged in developing and commercializing human plasma-derived products, with its first and second product being a human immunoglobulin. As of January 2008, one of these products has been cleared by the Food and Drug Administration (FDA) to commence Phase II clinical trials.

Pursuant to the Agreement, the Company acquired 100% of the outstanding capital stock of ADMA NJ. In connection with the merger, the Company subsequently changed its name to ADMA Biologics, Inc. and increased its authorized common stock to 6,500,000 shares and its authorized preferred stock to 3,400,000 shares. Under the terms of the Agreement, the stockholders of ADMA NJ exchanged all of their issued and outstanding shares of common stock for 351,535 shares of the Company's common stock (the "Exchange").

The 351,535 shares of common stock represented 100% of the ownership interests in the Company following the merger. The Exchange resulted in the stockholders of ADMA NJ having control of the Company, representing a recapitalization of the Company, or a "reverse merger" rather than a business combination.

In connection therewith, the Company's historical capital accounts were retroactively adjusted to reflect the equivalent number of shares issued by the Company in the Exchange while ADMA NJ's historical accumulated deficit was carried forward. The statement of operations reflects the activities of ADMA NJ from the commencement of its operations on June 24, 2004.

On April 3, 2008, the Company formed a wholly-owned subsidiary, ADMA Biologics Centers of Georgia, for the purpose of operating plasma collection centers. The subsidiary is a Delaware corporation operating in Georgia.

As a development stage enterprise, the Company's primary efforts are devoted to conducting research and development of human plasma-derived products for the treatment of specific disease states. As the Company has limited capital resources and has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future, the Company has needed to raise capital from the sales of its securities to sustain operations. As of December 31, 2010, the Company had approximately $.2 million in cash and cash equivalents. Management believes that cash and cash equivalents as of December 31, 2010 are not sufficient to fund operations for the next twelve months. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The Company will be required to obtain loans or raise additional funds to meet long-term obligations and continue operations. There can be no assurance that such funds, if available at all, can be obtained on terms acceptable to the Company.

In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's research and development will be successfully completed or that any product will be approved or commercially viable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements.

The following comprises the Company's significant accounting policies:

Basis of presentation

The accompanying consolidated financial statements include the accounts of ADMA Biologics, Inc. and its wholly-owned subsidiary ADMA Biologics Centers of Georgia. All significant intercompany transactions and balances have been eliminated in consolidation. The Company's financial statements are presented as statements of a development stage enterprise. The Company's primary operations since inception have been devoted to the research and development of human plasma-derived products. No operating revenue has been generated. As a result, the financial statements are presented in accordance with Accounting and Reporting by Development Stage Enterprises.

Cash and cash equivalents

The Company considers all highly-liquid instruments purchased with a maturity of three months or less to be cash equivalents.

Plasma inventories are carried at the lower of cost or market value determined on the first-in, first-out method. Physical inventories are conducted at the end of each year and perpetual records are adjusted accordingly. Once the plasma is processed to a finished good for ongoing trials it is then expensed to research and development. Inventory at December 31, 2010 and 2009 consists of raw materials.

Research and development costs

The Company expenses all research and development costs as incurred including plasma and equipment for which there is no alternative future use. Such expenses include licensing fees and costs associated with planning and conducting clinical trials.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include valuation of inventory, assumptions used in the fair value of stock-based compensation, and the allowance for the valuation of future tax benefits.

Concentration of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. At December 31, 2010, the Company maintained balances over the FDIC limit by approximately $230,000.

Property and equipment

Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset's estimated useful life, which is five to ten years. Leasehold improvements are amortized over the lesser of the lease term or their estimated useful lives.

From June 24, 2004 to July 16, 2007, the Company elected to be taxed as an S corporation for both Federal and State income tax reporting purposes. Accordingly, the taxable income or loss related to that period was includable in the personal income tax returns of the stockholders.

Effective July 16, 2007, the Company was merged into a C corporation and adopted guidance issued for Accounting for Income Taxes which requires that the Company recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts ("temporary differences") at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company records a valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized.

The Company adopted the new accounting guidance for uncertainty in income taxes on January 1, 2007. The adoption of that guidance did not result in the recognition of any unrecognized tax benefits and the Company has no unrecognized tax benefits at December 31, 2010 and 2009. The Company's U.S. Federal and state income tax returns prior to fiscal year 2007 are closed and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The Company will recognize interest and penalties associated with tax matters as income tax expense.

Earnings (Loss) Per Share

Net loss per share is determined in accordance with the two-class method. This method is used for computing basic net loss per share when companies have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the Company. Under the two-class method, net loss is allocated between common shares and other participating securities based on their participation rights in both distributed and undistributed earnings. The Company's Series A convertible preferred stock are participating securities, since the stockholders are entitled to share in dividends declared by the board of directors with the common stock based on their equivalent common shares.

Basic net loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Because the holders of the Series A convertible Preferred Stock are not contractually required to share in the Company's losses, in applying the two-class method to compute basic net loss per common share no allocation to preferred stock was made for the years ended December 31, 2010 and 2009.

Diluted net loss per share is calculated by dividing net loss applicable to common stockholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of common stock and dilutive common stock outstanding during the period. Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options and a warrant (using the treasury stock method) and the conversion of the shares of Series A convertible preferred stock (using the more dilutive of the (a) as converted method or (b) the two -class method). Potential common shares in the diluted net loss per share computation are excluded to the extent that they would be anti-dilutive. No potentially dilutive securities are included in the computation of any diluted per share amounts as the Company reported a net loss for all periods presented. Potentially dilutive securities that would be issued upon conversion of convertible notes, conversion of Series A convertible preferred stock, and the exercise of outstanding warrants and stock options were 1.8 million and 1.4 million as of December 31, 2010 and 2009, respectively.

Stock-based compensation

The Company follows recognized accounting guidance which requires all stock-based payments, including grants of stock options, to be recognized in the Statement of Operations as compensation expense, based on their fair values on the grant date. The estimated fair value of options granted under the Company's 2007 Employee Stock Option Plan ("Plan") are recognized as compensation expense over the option-vesting period.

During the years ended December 31, 2010 and 2009, the Company recorded stock-based compensation expense to employees and a consultant of $34,809.

The fair value of employee options granted was determined on the date of grant using the Black-Scholes model. The Black-Scholes option valuation 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 highly subjective assumptions including the expected stock price volatility. The Company's employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate. Because there is no public market for the Company's stock and very little historical experience with the Company's stock options, a small similar publicly traded company was used for comparison and expectations as to assumptions required for fair value computation using the Black-Scholes methodology. Accordingly, the Company's stock price volatility is expected to be 72% and the expected term of options outstanding is 6.25 years. For options granted in 2008, the Company used a risk-free interest rate of 3.364% which corresponded to the expected term on the date of grant for each option contract. The Company's dividend yield has been assumed at 0% as the Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.

Guidance for stock-based compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company currently estimates there will be no forfeitures of options.

Fair value of financial instruments

The carrying amounts of certain of the Company's financial instruments, including cash and cash equivalents, and accounts payable are shown at cost which approximates fair value due to the short-term nature of these instruments.

The Company evaluated subsequent events through December 9, 2011, the date the financial statements were available to be issued, except for the matters discussed in Note 11, which are as of February 13, 2012.

In February, May, June, and August 2011, the Company received an aggregate of $1,100,000 of additional funding for operations from stockholders under terms substantially similar to previous convertible loan agreements. In September and October 2011, the Company received an aggregate of $200,000 from the issuance of nonconvertible notes to stockholders with a stated interest rate of 18% and a December 31, 2011 maturity date; these notes were repaid in October 2011.

Property and equipment consist of the following at December 31:

The Company recorded depreciation and amortization expense of $220,201 and $201,094 for the years ended December 31, 2010 and 2009, respectively.

In connection with the lease of commercial real estate by the Company's wholly owned subsidiary for the operation of the plasma collection center, the Company borrowed $125,980 from the lessor to pay for leasehold improvement costs in excess of the allowance provided for in the lease agreement. The loan bears interest at 9% and is payable in 120 monthly installments of $1,596 maturing December 31, 2019. Principal maturities under the loan are as follows:

The Company has issued senior secured convertible promissory notes to significant stockholders pursuant to the terms of Note Purchase Agreements. The outstanding principal and interest under the notes are due and payable upon the earliest to occur of: (i) December 31, 2011 (as amended); (ii) the date on which the Company consummates a preferred stock financing in which the gross proceeds to the Company total at least $10,000,000 ("Qualified Financing" as defined in the Notes); and (iii) the occurrence of an Event of Default (as defined in the Notes), the first of these three events to occur referred to as the "Maturity Date". Interest accrues on the outstanding principal at the stated rate and is payable on the Maturity Date.

If all or any of the principal and accrued interest thereon remains outstanding prior to the date of a Qualified Financing, those amounts shall automatically convert into shares of the Company's preferred stock at the lower of (a) the price per share paid by investors in the Qualified Financing or (b) the stated Conversion Price.

Any principal and accrued interest thereon that remains outstanding will convert into preferred shares at the stated conversion price if immediately prior to the Maturity Date, a Qualified Financing has not occurred and the Company does not have sufficient cash on hand to repay the outstanding balance in full. The Series A-1 and A-2 Preferred Stock shall have the same rights and privileges as the Company's Series A Preferred Stock and shall be senior to the Series A Preferred Stock in liquidation preference.

If the principal amounts due under these notes are repaid on the Maturity Date, the payees have the option to convert all of the accrued interest into shares of Series A Preferred Stock determined by dividing the interest by the Conversion Price.

In the Event of a Default, the interest rate stated on the notes shall be increased by three percent (3%) per annum. The Notes are collateralized by all of the assets of the Company.

In connection with the issuance of these Notes, the Company issued stock purchase warrants expiring in June 2020 to existing common and preferred stockholders to purchase 52,730 shares of common stock at an exercise price of $.07 per share. Such warrants vested immediately and can be exercised at any time up to the expiration date. No warrants were exercised in 2010.

The following table summarizes information about warrants outstanding as of December 31, 2010 and 2009:

The Company was originally organized as an S corporation and issued 15 shares of stock at a par value of $.07 each. On July 16, 2007, the Company merged into a C corporation and, concurrent with this election, each of the shares of stock of the terminating S corporation converted into 23,435.67 shares of common stock of the C corporation, resulting in a total of 351,535 shares outstanding. Since the shareholders of the S corporation became the majority shareholders of the C corporation, this was accounted for as a reverse merger. Accordingly, the pre-merger financial statements of the S corporation have become the historical financial statements of the C corporation.

Upon conversion of the Company from an S corporation to a C corporation, the Company increased its authorized common stock to 6,500,000 shares with a par value of $.001 per share and authorized 3,400,000 shares of Series A preferred (Series A shares), with a par value of $.001 per share. On July 17, 2007, the Company completed a private placement and raised gross proceeds of $17,000,000 from the sale of 3,386,454 Series A convertible preferred shares at a sale price of $5.02 per share.

The Series A Preferred Shares have the following rights and preferences:

From and after the date of their issuance, dividends at the rate per annum of $0.3514 per share shall accrue on Series A Preferred shares. The Company is under no obligation to pay such accruing dividends. However, dividends on the Preferred Shares shall be cumulative from the date of issuance and shall be paid before any dividends on shares of any other class of stock of the Company. No such dividends were declared prior to December 31, 2010. As of December 31, 2010 and 2009, $4,117,726 and $2,927,726, respectively, in dividends had accumulated on the Series A shares.

The holders of the Series A Preferred Shares have the right to convert their shares to common stock at any time at an initial conversion price of $34.14 per share. In certain situations, the Preferred Shares are protected from dilution by future issuances of common stock at less than the Series A Preferred Share conversion price. At December 31, 2010, the conversion price was $25.30 per share under these anti-dilution provisions.

The Company is required, at all times, to reserve a sufficient number of shares of common stock to effect the conversion of all outstanding shares of preferred stock.

Liquidation preference

Upon liquidation or dissolution of the Company, the holders of the Series A shares are entitled to be paid an amount per share equal to the Series A Original Issue Price ($5.02 per share) plus the cumulative unpaid dividends and any other dividends declared but unpaid.

The stockholders of the Series A Preferred Shares vote together with all other classes of stock as a single class on matters presented to the stockholders of the Company. Each holder of Series A Preferred Shares is entitled to a number of votes (one vote) equal to the number of whole shares of common stock into which the Series A Preferred Shares of such holder are convertible as of the record date for determining stockholders to vote on such matters, except with respect to certain corporate actions, which require a fifty percent (50%) approval of the then outstanding Series A Preferred Shares. The holders of record of the Series A shares, as a separate class, are entitled to elect two directors of the five-member Board of the Company. One of the two "Series A Directors" shall serve as Chairman of the Board. The holders of record of the common stock are also entitled to elect two directors.

The Company leases an office building and equipment from an entity owned by related parties on a month-to-month basis. Rent expense amounted to $96,539 and $82,104 for the years ended December 31, 2010 and 2009, respectively.

The Company maintains deposits and other accounts at a bank which is less than 5%-owned by related parties and where a stockholder is a member of the Board of Directors of the bank.

The Company owes $7,300,000 to existing common and preferred stockholders under senior secured convertible promissory notes and nonconvertible promissory notes at December 31, 2010. Interest in the amount of $650,301 and $87,534 has been accrued on these notes as of December 31, 2010 and 2009, respectively. Subsequent to the year end, there were additional borrowings of $1,300,000 from the Company's existing common and preferred stockholders.

Effective June 1, 2008, the Company entered into a 10-year lease for commercial space in a Georgia office building, commencing October 1, 2008. The lease provides for annual rent increases and renewal options at market rent. Rent expense under this lease was approximately $140,000 in both 2010 and 2009.

Future minimum lease payments for each of the five years ending December 31 and thereafter are as follows:

Irrevocable letter of credit

On May 27, 2008, the Company established a $426,963 Standby Letter of Credit in favor of a landlord to guarantee payment under the Georgia office building lease. The entire amount under this letter of credit is maintained in a restricted cash account as of December 31, 2010 and 2009. The letter of credit expires on September 30, 2018.

Purchase commitments

In 2008, the Company entered into an agreement with Biotest Pharmaceuticals for the purchase of plasma pursuant to which the Company will purchase plasma to be utilized in its clinical trials. In 2010 and 2009, the Company purchased $244,937 and $676,763, respectively, of plasma under this agreement. The amount of plasma the Company is committed to purchase is equal to the amount of plasma collected before the cancellation of the agreement. The agreement expired on March 31, 2011.

On July 16, 2007 (the "Effective Date"), the Company's Board and stockholders adopted the 2007 Employee Stock Option Plan (the "Plan"). The Plan has been adopted as a means of attracting, motivating, and retaining the best available personnel for positions of substantial responsibility within the Company. Under the Plan, the initial maximum number of options to acquire shares of the Company's common stock that were available for issuance to Optionees was 94,853.

The Plan provides for the Board or a Committee of the Board (the "Committee") to grant Awards to Optionees and to determine the exercise price, vesting term, expiration date and all other terms and conditions of the Awards, including acceleration of the vesting of an Award at any time. All options granted under the Plan are intended to be non-qualified options ("NQO") unless specified by the Committee to be incentive stock options ("ISO"), as defined by the Internal Revenue Code. NQOs may be granted to employees, consultants or Board members at an option price not less than the fair market value of the common stock subject to the Stock Option Agreement.

As of December 31, 2010 and 2009, there were 11,471 options available for grant under the Plan.

The following table summarizes information about stock options outstanding as of December 31, 2010 and 2009:

The total remaining unrecognized compensation cost related to vested awards amounts to $27,776 and is expected to be recognized in 2011 and 2012.