10-Q
0001833214September 30, 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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

OR

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

 

i


 

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

2


 

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.

3


 

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.

 

4


 

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.

5


 

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

)