SAB Biotherapeutics, Inc 10-Q for FY2022 Q2

SAB Biotherapeutics, Inc. (SABS)

10-Q 2022-08-10 For: 2022-06-30

Added on April 10, 2026

About this 10-Q

SAB Biotherapeutics, Inc filed this 10-Q on August 10, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.35M; down 65.1% from $18.21M a year earlier
Net loss: $4.78M; compared with a net loss of $2.94M a year earlier
Diluted EPS: -$0.11; compared with -$0.11 a year earlier

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Delaware	85-3899721
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2100 East 54th Street North Sioux Falls, South Dakota	57104
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, 0.0001 par value per share	SABS	The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per share	SABSW	The Nasdaq Stock Market LLC


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


		Page

PART I.	FINANCIAL INFORMATION	2

Item 1.	Consolidated Financial Statements (Unaudited)	2
	Consolidated Balance Sheets	2
	Consolidated Statements of Operations	3
	Consolidated Statements of Changes In Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION	41

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
Signatures		45


	June 30, 2022			December 31, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	16,616,493		$	33,206,712
Restricted cash		—			6,338,306
Accounts receivable, net		9,612,672			8,010,708
Prepaid expenses		1,521,376			864,513
Total current assets		27,750,541			48,420,239
Long-term prepaid insurance		535,082			—
Operating lease right-of-use assets		2,085,923			2,615,204
Financing lease right-of-use assets		3,946,306			4,019,322
Property, plant and equipment, net		24,837,073			24,314,455
Total assets	$	59,154,925		$	79,369,220
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,943,581		$	4,458,525
Forward share purchase liability		—			6,338,306
Notes payable		25,013			25,013
Operating lease liabilities, current portion		1,169,139			1,142,413
Finance lease liabilities, current portion		140,767			161,050
Due to related party		—			2,367
Deferred grant income		—			100,000
Accrued expenses and other current liabilities		9,858,719			12,455,888
Total current liabilities		16,137,219			24,683,562
Operating lease liabilities, noncurrent		1,061,122			1,653,185
Finance lease liabilities, noncurrent		3,694,834			3,762,430
Warrant liabilities		1,140,478			10,720,130
Total liabilities		22,033,653			40,819,307
Commitments and contingencies (Note 17)
Stockholders’ equity
Preferred stock; $0.0001 par value; 10,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		—			—
Common stock; $0.0001 par value; 490,000,000 shares authorized at June 30, 2022 and December 31, 2021; 43,577,543 and 43,487,279 shares issued, respectively, and 43,030,885 and 43,487,279 outstanding at June 30, 2022 and December 31, 2021, respectively		4,358			4,349
Treasury stock, at cost; 546,658 and 0 shares held at June 30, 2022 and December 31, 2021, respectively		(5,521,246	)		—
Additional paid-in capital		75,557,244			67,674,515
Accumulated deficit		(32,919,084	)		(29,128,951	)
Total stockholders’ equity		37,121,272			38,549,913
Total liabilities and stockholders’ equity	$	59,154,925		$	79,369,220


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue
Grant revenue	$	6,350,525		$	18,209,502		$	18,153,601		$	35,137,236
Total revenue		6,350,525			18,209,502			18,153,601			35,137,236
Operating expenses
Research and development		8,584,427			18,683,402			21,947,692			31,465,406
General and administrative		4,309,042			2,398,641			9,456,191			5,730,447
Total operating expenses		12,893,469			21,082,043			31,403,883			37,195,853
Loss from operations		(6,542,944	)		(2,872,541	)		(13,250,282	)		(2,058,617	)
Changes in fair value of warrant liabilities		1,730,080			—			9,579,652			—
Gain on debt extinguishment of Paycheck Protection Program SBA Loan		—			—			—			665,596
Interest expense		(71,237	)		(74,434	)		(143,259	)		(149,626	)
Interest income		15,824			5,296			23,757			10,802
Total other income (expense)		1,674,667			(69,138	)		9,460,150			526,772
Loss before income taxes		(4,868,277	)		(2,941,679	)		(3,790,132	)		(1,531,845	)
Income tax expense (benefit)		(92,281	)		—			—			—
Net loss	$	(4,775,996	)	$	(2,941,679	)	$	(3,790,132	)	$	(1,531,845	)
Loss per common share attributable to the Company’s shareholders
Basic and diluted loss per common share	$	(0.11	)	$	(0.11	)	$	(0.09	)	$	(0.06	)
Weighted-average common shares outstanding – basic and diluted		42,999,413			25,973,406			43,048,254			25,973,406



	Common stock						Treasury Stock
	Shares		Amount		Additional Paid-In Capital		Shares			Amount			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2021		43,487,279	$	4,349	$	67,674,515		—		$	—		$	(29,128,951	)	$	38,549,913
Issuance of common stock for exercise of stock options		14,500		1		7,829		—			—			—			7,830
Forward Share Purchase Agreement, final settlement		—		—		817,060		—			—			—			817,060
Repurchase of common stock pursuant to the Forward Share Purchase Agreement		—		—		5,521,246		(546,658	)		(5,521,246	)		—			—
Stock-based compensation		—		—		897,600		—			—			—			897,600
Net income		—		—		—		—			—			985,863			985,863
Balance at March 31, 2022		43,501,779	$	4,350	$	74,918,250		(546,658	)	$	(5,521,246	)	$	(28,143,088	)	$	41,258,266
Issuance of common stock for exercise of stock options		75,764		8		69,133		—			—			—			69,141
Stock-based compensation		—		—		569,861		—			—			—			569,861
Net loss		—		—		—		—			—			(4,775,996	)		(4,775,996	)
Balance at June 30, 2022		43,577,543	$	4,358	$	75,557,244		(546,658	)	$	(5,521,246	)	$	(32,919,084	)	$	37,121,272


	June 30, 2022		June 30, 2021
Cash and cash equivalents	$	16,616,493	$	10,232,676
Restricted cash		—		—
Total cash, cash equivalents, and restricted cash	$	16,616,493	$	10,232,676


Animal facility equipment	7 years
Laboratory equipment	7 years
Leasehold improvements	Shorter of asset life or lease term
Office furniture & equipment	5 years
Vehicles	5 years


	June 30, 2022		December 31, 2021
New office space at Headquarters	$	525,626	$	11,183
Laboratory space at Headquarters		—		2,506,482
Laboratory equipment at Headquarters		189,249		246,801
IT equipment at Headquarters		63,538		212,209
Software		137,811		137,811
Bioreactors		—		1,280,728
Other		—		213,564
Total construction-in-progress	$	916,224	$	4,608,778


	Operating			Finance
Weighted-average remaining lease term	1.94 years			16.37 years
Weighted-average discount rate		4.75	%		7.72	%


	Operating			Finance
2022 - remaining	$	619,587		$	213,790
2023		1,169,559			406,339
2024		535,944			401,496
2025		—			401,496
2026		—			401,496
Thereafter		—			4,784,494
Undiscounted future minimum lease payments		2,325,090			6,609,111
Less: Amount representing interest payments		(94,829	)		(2,773,510	)
Total lease liabilities		2,230,261			3,835,601
Less current portion		(1,169,139	)		(140,767	)
Noncurrent lease liabilities	$	1,061,122		$	3,694,834


	June 30, 2022		December 31, 2021
Accrued vacation	$	626,039	$	552,629
Accrued payroll		479,526		674,858
Accrued construction-in-progress		38,959		548,988
Accrued supplies		155,560		709,027
Accrued consulting		94,060		179,082
Accrued clinical trial expense		389,779		423,634
Accrued outside laboratory services		251,963		128,752
Accrued bonus & severance		1,591,291		1,804,288
Accrued contract manufacturing		12,285		1,000,824
Accrued legal		720,154		833,646
Accrued financing fees payable		5,123,500		5,100,000
Accrued franchise tax payable		32,501		216,251
Other accrued expenses		343,102		283,909
	$	9,858,719	$	12,455,888


Animal Facility	40 years
Equipment	3 –7 years
Land	Indefinite


	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Outstanding options, December 31, 2021		5,107,672		$	2.44		5.78	$	28,948,535
Granted		528,711		$	2.84
Forfeited		(256,475	)	$	4.81
Exercised		(90,264	)	$	0.85
Outstanding options, June 30, 2022		5,289,644		$	2.64		4.88	$	2,146,863
Options vested and exercisable, June 30, 2022		3,950,063		$	1.34		3.69	$	2,146,863


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Expected volatility	85.4		%	75.9 - 104.3		%	78.0 - 85.4		%	75.9 - 104.3		%
Weighted-average volatility		85.4	%		96.7	%		79.0	%		98.1	%
Expected dividends	—		%	—		%	—		%	—		%
Expected term (in years)	5.89			6.25			5.50 - 6.08			6.25
Risk-free rate	3.03		%	0.14 - 0.59		%	1.38 - 3.03		%	0.14 - 0.59		%


	Number of shares		Weighted Average Grant Date Fair Value
Unvested as of December 31, 2021		—	$	—
Granted		300,000	$	1.89
Vested		—	$	—
Forfeited		—	$	—
Unvested as of June 30, 2022		300,000	$	1.89


	As of June 30, 2022
	Total		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Liabilities:
Public Warrant liability	$	1,092,500	$	1,092,500	$	—	$	—
Private Placement Warrant liability		47,978		—		—		47,978
Total	$	1,140,478	$	1,092,500	$	—	$	47,978


	As of December 31, 2021
	Total		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Liabilities:
Public Warrant liability	$	10,292,500	$	10,292,500	$	—	$	—
Private Placement Warrant liability		427,630		—		—		427,630
Total	$	10,720,130	$	10,292,500	$	—	$	427,630


	June 30, 2022
Balance, December 31, 2021	$	427,630
Change in fair value of Private Placement Warrant liability		(317,072	)
Balance, March 31, 2022	$	110,558
Change in fair value of Private Placement Warrant liability		(62,580	)
Balance, June 30, 2022	$	47,978


	June 30, 2022			December 31, 2021
Risk-free interest rate		3.00	%		1.24	%
Expected term remaining (years)		4.31			4.81
Implied volatility		73.0	%		43.0	%
Closing common stock price on the measurement date	$	1.45		$	7.81


	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		Over 5 years
Notes payable (1)	$	25,013	$	25,013	$	—	$	—	$	—
Operating lease liabilities (2)		2,325,090		619,587		1,705,503		—		—
Finance lease liabilities (2)		6,609,111		213,790		807,835		802,992		4,784,494
Total	$	8,959,214	$	858,390	$	2,513,338	$	802,992	$	4,784,494


Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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	SAB BIOTHERAPEUTICS, INC.

Date: August 9, 2022	By:	/s/ Eddie J. Sullivan
		Eddie J. Sullivan
		Chief Executive Officer

	By:	/s/ Russell Beyer
		Russell Beyer
		Chief Financial Officer


1.	I have reviewed this Quarterly Report on Form 10-Q of SAB Biotherapeutics, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and


	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 9, 2022	By:	/s/ Russell Beyer
		Russell Beyer Chief Financial Officer
		(Principal Financial and Accounting Officer)


	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.