SEC Filing | SAB Biotherapeutics

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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2022


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

For the transition period from ___________________ to ___________________

Commission File Number: 001-39871

SAB BIOTHERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)


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)

Registrant’s telephone number, including area code: (605) 679-6980

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 3, 2022, the registrant had 43,030,885 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		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	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION	43

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
Signatures		47

PART I—FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited).

SAB Biotherapeutics, Inc. and Subsidiaries

Consolidated Balance Sheets


	September 30, 2022			December 31, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	8,332,188		$	33,206,712
Restricted cash		—			6,338,306
Accounts receivable, net		12,942,037			8,010,708
Prepaid expenses		907,865			864,513
Total current assets		22,182,090			48,420,239
Long-term prepaid insurance		501,388			—
Operating lease right-of-use assets		1,870,518			2,615,204
Financing lease right-of-use assets		3,921,589			4,019,322
Property, plant and equipment, net		24,031,908			24,314,455
Total assets	$	52,507,493		$	79,369,220
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	5,484,276		$	4,458,525
Forward share purchase liability		—			6,338,306
Notes payable		25,013			25,013
Operating lease liabilities, current portion		1,212,862			1,142,413
Finance lease liabilities, current portion		140,891			161,050
Due to related party		—			2,367
Deferred grant income		—			100,000
Accrued expenses and other current liabilities		10,238,212			12,455,888
Total current liabilities		17,101,254			24,683,562
Operating lease liabilities, noncurrent		762,775			1,653,185
Finance lease liabilities, noncurrent		3,662,541			3,762,430
Warrant liabilities		357,516			10,720,130
Total liabilities		21,884,086			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 September 30, 2022 and December 31, 2021, respectively		—			—
Common stock; $0.0001 par value; 490,000,000 shares authorized at September 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 September 30, 2022 and December 31, 2021, respectively		4,358			4,349
Treasury stock, at cost; 546,658 and 0 shares held at September 30, 2022 and December 31, 2021, respectively		(5,521,246	)		—
Additional paid-in capital		76,135,447			67,674,515
Accumulated deficit		(39,995,152	)		(29,128,951	)
Total stockholders’ equity		30,623,407			38,549,913
Total liabilities and stockholders’ equity	$	52,507,493		$	79,369,220

See accompanying notes to the consolidated financial statements

SAB Biotherapeutics, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue
Grant revenue	$	3,589,708		$	14,680,589		$	21,743,309		$	49,817,825
Total revenue		3,589,708			14,680,589			21,743,309			49,817,825
Operating expenses
Research and development		7,352,978			15,070,265			29,300,405			46,535,671
General and administrative		4,044,046			3,600,678			13,500,512			9,331,125
Total operating expenses		11,397,024			18,670,943			42,800,917			55,866,796
Loss from operations		(7,807,316	)		(3,990,354	)		(21,057,608	)		(6,048,971	)
Changes in fair value of warrant liabilities		782,962			—			10,362,614			—
Gain on debt extinguishment of Paycheck Protection Program SBA Loan		—			—			—			665,596
Other income		1,527			3,953			1,527			3,953
Interest expense		(70,626	)		(78,558	)		(213,885	)		(228,184	)
Interest income		17,385			3,769			41,143			14,571
Total other income (expense)		731,248			(70,836	)		10,191,399			455,936
Loss before income taxes		(7,076,068	)		(4,061,190	)		(10,866,209	)		(5,593,035	)
Income tax expense (benefit)		—			—			—			—
Net loss	$	(7,076,068	)	$	(4,061,190	)	$	(10,866,209	)	$	(5,593,035	)
Loss per common share attributable to the Company’s shareholders
Basic and diluted loss per common share	$	(0.16	)	$	(0.16	)	$	(0.25	)	$	(0.22	)
Weighted-average common shares outstanding – basic and diluted		43,030,885			25,973,406			43,042,379			25,973,406

See accompanying notes to the consolidated financial statements.

SAB Biotherapeutics, Inc. and Subsidiaries

Consolidated Statements of Changes In Stockholders’ Equity

(Unaudited)



	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
Stock-based compensation		—		—		578,203		—			—			—			578,203
Net loss		—		—		—		—			—			(7,076,068	)		(7,076,068	)
Balance at September 30, 2022		43,577,543	$	4,358	$	76,135,447		(546,658	)	$	(5,521,246	)	$	(39,995,152	)	$	30,623,407

See accompanying notes to the consolidated financial statements.

SAB Biotherapeutics, Inc. and Subsidiaries

Consolidated Statements of Changes In Stockholders’ Equity

(Unaudited)



	Common stock
	Shares		Amount		Additional Paid-In Capital		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
Stock-based compensation		—		—		433,431		—			433,431
Net loss		—		—		—		(2,941,679	)		(2,941,679	)
Balance at June 30, 2021		25,973,406	$	2,598	$	51,772,203	$	(13,516,265	)	$	38,258,536
Stock-based compensation		—		—		880,664		—			880,664
Net loss		—		—		—		(4,061,190	)		(4,061,190	)
Balance at September 30, 2021		25,973,406	$	2,598	$	52,652,867	$	(17,577,455	)	$	35,078,010

See accompanying notes to the consolidated financial statements.

SAB Biotherapeutics, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(10,866,209	)	$	(5,593,035	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Gain on debt extinguishment of Paycheck Protection Program SBA Loan		—			(665,596	)
Depreciation and amortization		2,270,621			868,630
Amortization of right-of-use assets		97,733			123,777
Stock-based compensation expense		2,045,664			1,663,210
Gain on sale of equipment		(15,793	)		(5,488	)
Changes in fair value of warrant liabilities		(10,362,614	)		—
Changes in operating assets and liabilities
Accounts receivable		(4,931,330	)		10,356,280
Prepaid expenses		(544,737	)		331,559
Operating lease right-of-use assets		(75,276	)		(