SAB Biotherapeutics, Inc 10-Q for FY2022 Q1

SAB Biotherapeutics, Inc. (SABS)

10-Q 2022-05-12 For: 2022-03-31

Added on April 10, 2026

About this 10-Q

SAB Biotherapeutics, Inc filed this 10-Q on May 12, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.8M; down 30.3% from $16.93M a year earlier
Net income: $985.86K; down 30.1% from net income of $1.41M a year earlier
Diluted EPS: $0.02; down 60.0% from $0.05 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	1

Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Changes In Stockholders’ Equity	3
	Consolidated Statements of Cash Flows	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42


	March 31, 2022			December 31, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	22,408,409		$	33,206,712
Restricted cash		—			6,338,306
Accounts receivable, net		11,786,420			8,010,708
Prepaid expenses		1,974,908			864,513
Total current assets		36,169,737			48,420,239
Operating lease right-of-use assets		2,351,193			2,615,204
Financing lease right-of-use assets		3,978,116			4,019,322
Property, plant and equipment, net		24,973,432			24,314,455
Total assets	$	67,472,478		$	79,369,220
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,981,385		$	4,458,525
Forward share purchase liability		—			6,338,306
Notes payable		25,013			25,013
Operating lease liabilities, current portion		1,154,680			1,142,413
Finance lease liabilities, current portion		145,898			161,050
Due to related party		—			2,367
Deferred grant income		—			100,000
Income tax payable		92,281			—
Accrued expenses and other current liabilities		11,856,627			12,455,888
Total current liabilities		18,255,884			24,683,562
Operating lease liabilities, noncurrent		1,358,829			1,653,185
Finance lease liabilities, noncurrent		3,728,941			3,762,430
Warrant liabilities		2,870,558			10,720,130
Total liabilities		26,214,212			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 and outstanding at March 31, 2022 and December 31, 2021, respectively		—			—
Common stock; $0.0001 par value; 490,000,000 shares authorized at March 31, 2022 and December 31, 2021; 43,501,779 and 43,487,279 shares issued, respectively, and 42,955,121 and 43,487,279 outstanding at March 31, 2022 and December 31, 2021, respectively		4,350			4,349
Treasury stock, at cost; 546,658 and 0 shares held at March 31, 2022 and December 31, 2021, respectively		(5,521,246	)		—
Additional paid-in capital		74,918,250			67,674,515
Accumulated deficit		(28,143,088	)		(29,128,951	)
Total stockholders’ equity		41,258,266			38,549,913
Total liabilities and stockholders’ equity	$	67,472,478		$	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 March 31,
	2022			2021
Revenue
Grant revenue	$	11,803,077		$	16,927,734
Total revenue		11,803,077			16,927,734
Operating expenses
Research and development		13,324,344			12,782,004
General and administrative		5,186,072			3,331,806
Total operating expenses		18,510,416			16,113,810
Income (loss) from operations		(6,707,339	)		813,924
Changes in fair value of warrant liabilities		7,849,572			—
Gain on debt extinguishment of Paycheck Protection Program SBA Loan		—			665,596
Interest expense		(72,022	)		(75,192	)
Interest income		7,933			5,506
Total other income		7,785,483			595,910
Income before income taxes		1,078,144			1,409,834
Income tax expense		92,281			—
Net income	$	985,863		$	1,409,834
Earnings per common share attributable to the Company’s shareholders
Basic earnings per common share	$	0.02		$	0.05
Diluted earnings per common share	$	0.02		$	0.05
Weighted-average common shares outstanding – basic		43,113,353			25,973,406
Weighted-average common shares outstanding – diluted		45,816,651			28,072,567



	Common stock						Treasury Stock
	Shares		Amount		Additional Paid-In Capital		Shares			Amount			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2020		25,973,406	$	2,598	$	50,989,657		—		$	—		$	(11,984,420	)	$	39,007,835
Stock-based compensation		—		—		349,115		—			—			—			349,115
Net income		—		—		—		—			—			1,409,834			1,409,834
Balance at March 31, 2021		25,973,406	$	2,598	$	51,338,772		—		$	—		$	(10,574,586	)	$	40,766,784
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


	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	22,408,409	$	20,128,251
Restricted cash		—		—
Total cash, cash equivalents, and restricted cash	$	22,408,409	$	20,128,251


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


	March 31, 2022		December 31, 2021
New office space at Headquarters	$	339,939	$	11,183
Laboratory space at Headquarters		—		2,506,482
Laboratory equipment at Headquarters		89,009		246,801
IT equipment at Headquarters		103,831		212,209
Software		137,811		137,811
Bioreactors		1,295,651		1,280,728
Other		164,193		213,564
Total construction-in-progress	$	2,130,434	$	4,608,778


	Operating			Finance
Weighted-average remaining lease term	2.18 years			16.60 years
Weighted-average discount rate		4.75	%		7.71	%


	Operating			Finance
2022 - remaining	$	928,943		$	324,265
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		2,634,446			6,719,586
Less: Amount representing interest payments		(120,937	)		(2,844,747	)
Total lease liabilities		2,513,509			3,874,839
Less current portion		(1,154,680	)		(145,898	)
Noncurrent lease liabilities	$	1,358,829		$	3,728,941


	March 31, 2022		December 31, 2021
Accrued vacation	$	678,855	$	552,629
Accrued payroll		274,104		674,858
Accrued construction-in-progress		291,132		548,988
Accrued supplies		61,253		709,027
Accrued consulting		122,618		179,082
Accrued clinical trial expense		455,786		423,634
Accrued outside laboratory services		222,291		128,752
Accrued bonus & severance		748,412		1,804,288
Accrued contract manufacturing		2,795,405		1,000,824
Accrued legal		720,152		833,646
Accrued financing fees payable		5,100,000		5,100,000
Accrued franchise tax payable		50,000		216,251
Other accrued expenses		336,619		283,909
	$	11,856,627	$	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		487,433		$	5.64
Forfeited		(24,713	)	$	4.66
Exercised		(14,500	)	$	0.54
Outstanding options, March 31, 2022		5,555,892		$	2.72		5.84	$	10,504,111
Options vested and exercisable, March 31, 2022		3,902,858		$	1.27		4.36	$	9,770,506


	Three Months Ended March 31,
	2022			2021
Expected volatility	78.0 - 80.8		%	104.3 - 104.3		%
Weighted-average volatility		79.0	%		104.3	%
Expected dividends	—		%	—		%
Expected term (in years)	5.50 - 6.08			6.25
Risk-free rate	1.38 - 2.41		%	0.14		%


	As of March 31, 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	$	2,760,000	$	2,760,000	$	—	$	—
Private Placement Warrant liability		110,558		—		—		110,558
Total	$	2,870,558	$	2,760,000	$	—	$	110,558


	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


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


	March 31, 2022			December 31, 2021
Risk-free interest rate		2.42	%		1.24	%
Expected term remaining (years)		4.56			4.81
Implied volatility		49.0	%		43.0	%
Closing common stock price on the measurement date	$	3.76		$	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)		2,634,446		1,239,615		1,394,831		—		—
Finance lease liabilities (2)		6,719,586		427,061		805,413		802,992		4,684,120
Total	$	9,379,045	$	1,691,689	$	2,200,244	$	802,992	$	4,684,120


Exhibit Number	Description	Schedule/ Form	File No.	Exhibit	Filing Date
10.1¥	Executive Employment Agreement, dated November 17, 2021, by and between SAB Biotherapeutics, Inc. and Samuel J. Reich	8-K	001-39871	10.1	November 19, 2021
10.2¥	Employment Agreement, dated June 6, 2021 by and between SAB Biotherapeutics, Inc. and Melissa Ullerich.	10-K	001-39871	10.4	March 29, 2022
10.3¥*	Employment Agreement, dated March 1, 2021 by and between SAB Biotherapeutics, Inc. And Rick Finnegan
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.
99.1*	Press Release dated May 12, 2022
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
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101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)


	SAB BIOTHERAPEUTICS, INC.

Date: May 12, 2022	By:	/s/ Eddie J. Sullivan
		Eddie J. Sullivan
		Chief Executive Officer

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


SAB Biotherapeutics, Inc.:		EXECUTIVE:

BY:	/s/ Eddie J. Sullivan	BY:	/s/ Frederick J. Finnegan
Name:	Eddie J. Sullivan	Name:	Frederick J. Finnegan
Title:	President and CEO

Date:	June 15, 2021	Date:	June 11, 2021


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: May 12, 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.