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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SAB Biotherapeutics Inc | NASDAQ:SABS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.02 | 0.70% | 2.87 | 2.70 | 2.95 | 2.90 | 2.80 | 2.80 | 1,965 | 00:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2021
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 |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the closing price of the shares of common stock on The Nasdaq Stock Market on June 30, 2021, was $114,540,000.
The number of shares of the registrant’s common stock outstanding as of March 25, 2022 was 42,955,121.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement for the 2022 annual meeting of stockholders to be filed pursuant to Regulation 14A within 120 days after the registrant’s fiscal year ended December 31, 2021, are incorporated by reference in Part III of this Form 10-K.
Auditor Firm Id: | 199 | Auditor Name: | Mayer Hoffman McCann P.C. | Auditor Location: | San Diego, California, United States |
Explanatory Note
SAB Biotherapeutics, Inc., a Delaware corporation (“SAB” or the “Company”, “we”, “our” or “us”) is filing this Amendment No. 1 to the Annual Report on Form 10-K (the “Form 10-K/A” or “Amended Annual Report”) to amend our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities Exchange Commission (the “SEC”) on March 29, 2022 (the “Original Form 10-K”), to restate the financial statements as of and for the year ended December 31, 2021.
In March 2023, the Audit Committee of the Company’s Board of Directors and the Company’s management concluded that the Company’s Original Form 10-K should no longer be relied upon as a result of the following accounting errors:
● | The Company concluded that it did not correctly account for a financed insurance premium whereby a third-party lender prepaid the Company's annual insurance premiums to our insurance companies in exchange for a short-term interest bearing note (the “Insurance Financing Agreement”). The Company previously recognized, on its consolidated balance sheet, a current prepaid asset for the amount paid by the Company under the Insurance Financing Agreement in excess of the total amortized value of the prepaid insurance policy. The Company reassessed its accounting for the Insurance Financing Agreement and determined that the Insurance Financing Agreement should be classified as a current note payable with the full amount of the insurance premium recognized as current prepaid asset at the time the Company entered into the Insurance Financing Agreement. |
● | The Company concluded that the Insurance Financing Agreement and corresponding payment to the third-party lender constitutes a constructive receipt and disbursement of cash. As a result, the Company determined the cash flows from financing activities contained within the Prior Year Financial Statements is understated—this error is accompanied by a corresponding overstatement in cash flows from operating activities due to an understated prepaid asset. |
● | Similar to the above assessment, the Company concluded that the cash payments to the third-party lender should be presented within cash flows from financing activities. As a result, the Company determined the cash flows from financing activities contained within the Prior Period Interim Financial Statements are overstated—this error is accompanied by a corresponding understatement in cash flows from operating activities due to the derecognition of the previously unrecognized prepaid asset. |
Accordingly, the Company is filing this 10-K/A to amend Part II, Item 7 and to restate Part II, Item 8 and Part IV, Item 15 of the Original Form 10-K.
In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Form 10-K/A also contains new certifications by the principal executive officer and the principal financial officer in Exhibits 31.1, 31.2, 32.1 and 32.2 as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. This Form 10-K/A also contains an updated consent of the Company’s independent registered public accounting firm, included as Exhibit 23.1.
Except as set forth in this Form 10-K/A, this Form 10-K/A does not amend or otherwise update any other information in the Original Form 10-K. Other than the information specifically amended and restated herein, this Form 10-K/A does not reflect events occurring after March 29, 2022, the date of the Original Form 10-K, or modify or update those disclosures that may have been affected by subsequent events. Accordingly, this Form 10- K/A should be read in conjunction with the Original Form 10-K and with our filings with the SEC after the Original Form 10-K.
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes included in Part II, Item 8 of this Form 10-K. Some of the information contained in this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors.” Please also refer to the section titled “Special Note Regarding Forward Looking Statements.”
Notes payable
As of December 31, 2021 and December 31, 2020, we had a notes payable balance of $1,796,724 and $710,768, respectively.
Note payable, related party
On February 24, 2016, we entered into a loan agreement with Christiansen Land and Cattle, Ltd., a related party, for a $3.0 million revolving line of credit secured by a blanket security interest in our assets.
We borrowed $2.5 million from the line of credit in 2016, and $350,000 in 2017. The line of credit had a fixed rate per annum of 6% compounded annually. The initial agreement was based upon repayment following a significant capital event – closing of equity or debt financing with total proceeds to us of $15 million or more or one year from the agreement date, whichever occurred first. The agreement was amended in August 2018 to extend the repayment timeframe to August 31, 2019. The first payment to repay this loan was made on August 31, 2018 ($1.0 million payment). Additional voluntary payments were being made at the rate of $30,000 per month. In August 2019, the agreement was amended to extend the maturity date to the earlier of August 31, 2020 or the occurrence of a significant capital event. The note payable balance as of December 31, 2019 was $1,364,644, which included accrued interest of $3,580. In July 2020, the note payable was paid in full and the line of credit was terminated.
Notes payable
On November 15, 2017, we entered into a loan agreement with a bank, for the financing of an ultrasound machine for $18,997. The agreement was for a four-year term, with monthly payments of $440. The note payable had a balance as of December 31, 2019 of $9,203 and was paid off in full in September 2020.
In December 2017, we entered into two loan agreements with a financial institution. One agreement was for the purchase of a tractor for $116,661 at a 3.6% interest rate, and a second agreement for the purchase of a trailer, truck, scale, and chute for $47,721 at a 5.9% interest rate. The loan for the tractor included annual payments of $25,913 for the next five years starting in December 2018. The loan for the trailer, truck, scale, and chute included monthly payments of $920 for five years starting in January 2018 through December 2022. During 2019, the trailer, truck, scale, and chute loan was paid in full. As of December 31, 2021 and December 31, 2020, the tractor loan balance was $25,013 and $49,156, respectively.
On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). In April 2020, we entered into the PPP Loan with First Premier Bank under the PPP, which is part of the CARES Act administered by the SBA. As part of the application for these funds, we, in good faith, certified that the current economic uncertainty made the loan request necessary to support our ongoing operations. The certification further requires us to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. Under the PPP, we received proceeds of approximately $661,612. In accordance with the requirements of the PPP, we utilized the proceeds from the PPP Loan primarily for payroll costs. The PPP Loan has a 1.00% interest rate per annum, matures in April 2022 and is subject to the terms and conditions applicable to loans administered by the SBA under the PPP. Under the terms of PPP, all or certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses, as described in the CARES Act. We recorded the entire amount of the PPP Loan as debt. Under the terms of the PPP Loan, monthly payments of principal and interest were due to commence November 1, 2020, however, the SBA is deferring loan payments for borrowers who apply for loan forgiveness until the SBA remits the borrower’s loan forgiveness amount to the lender. No payments were made in 2020 and, as of December 31, 2020, the PPP Loan balance was $661,612 with accrued interest of $3,984. An application for forgiveness of the PPP Loan was completed in February 2021. In March 2021, the SBA approved the forgiveness of the PPP Loan, plus accrued interest. We recorded a gain on extinguishment of PPP Loan of $665,596 for the forgiveness of the PPP Loan and accrued interest within gain on debt extinguishment of Paycheck Protection Program SBA Loan on the consolidated statement of operations for the year ended December 31, 2021.
Insurance Funding
We obtained financing for certain Director & Officer liability insurance policy premiums. The agreement assigns First Insurance Funding (Lender) a first priority lien on and security interest in the financed policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums. If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy.
The total premiums, taxes and fees financed is approximately $2,841,000 with an annual interest rate of 2.85%. In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker, we unconditionally promise to pay Lender the amount Financed plus interest and other charges permitted under the Agreement. At December 31, 2021 we recognized approximately $1,772,000, respectively, as insurance financing note payable in its consolidated balance sheet. We will pay the insurance financing through installment payments with the last payment being on September 22, 2022.
Please refer to Note 10 to the Company's consolidated financial statements, Notes Payable, for additional information on our debt.
Cash Flows
The following table summarizes our cash flows for the years ended December 31, 2021 and 2020:
2021 (Restated) |
2020 |
|||||||
Net cash provided by operating activities |
$ | 1,986,873 | $ | 10,004,795 | ||||
Net cash used in investing activities |
(10,943,657 | ) | (12,722,702 | ) | ||||
Net cash provided by financing activities |
35,891,419 | 8,982,321 | ||||||
Net decrease in cash, cash equivalents, and restricted cash |
$ | 26,934,635 | $ | 6,264,414 |
Operating Activities
Net cash provided by operating activities decreased by $8.0 million in 2021, primarily due to a $10.3 million increase in general and administrative expenses. Other main drivers include an increase in salaries and benefits of $4.6 million (added positions, higher stock compensation and bonus), an increase in business consulting of $2.0 million, and an increase in prepaid insurance of $1.4 million due to the Insurance Financing Agreement.
Investing Activities
Net cash used in investing activities decreased by $1.8 million in 2021, primarily due to a decrease in purchases of equipment. Net cash used in investing activities increased by $12.1 million in 2020, primarily due to investments in our manufacturing capabilities and equipment.
Financing Activities
Net cash provided by financing activities increased by $26.9 million in 2021, primarily due to a $24.4 million increase in cash flows from stock issuances and an increase of $2.5 million increase in net note issuances.
Contractual Obligations and Commitments
The following table summarizes our (restated) contractual obligations and commitments as of December 31, 2021:
Payments Due by Period |
||||||||||||||||||||
Total |
Less than |
1-3 years |
3-5 years |
Over |
||||||||||||||||
Notes payable (1) |
$ | 1,796,724 | $ | 1,796,724 | $ | — | $ | — | $ | — | ||||||||||
Forward share purchase liability (2) |
6,338,306 | 6,338,306 | — | — | — | |||||||||||||||
Operating lease liabilities (3) |
2,945,835 | 1,240,333 | 1,705,502 | — | — | |||||||||||||||
Finance lease liabilities (3) |
6,840,249 | 444,928 | 807,835 | 802,992 | 4,784,494 | |||||||||||||||
Total |
$ | 17,921,114 | $ | 9,820,291 | $ | 2,513,337 | $ | 802,992 | $ | 4,784,494 |
(1) | One remaining annual payment on the purchase of a tractor ($25,013) and insurance funding ($1,771,711). | |
(2) | Pursuant to the Forward Share Purchase Agreement, the Company may be required to purchase up to 627,555 shares of its issued and outstanding common stock at a price of $10.10 per share. Please refer to Note 4 to the Company's consolidated financial statements, Reverse Recapitalization and Business Combination, and Note 18 to the Company's consolidated financial statements, Subsequent Events, for additional information. | |
(3) | We are party to certain contractual arrangements for equipment, lab space, and an animal facility, which meet the definition of leases under FASB ASC Topic 842, Leases (“ASC 842”). |
We enter into contracts in the normal course of business with third parties, including CROs. These payments are not included in the table above, as the amount and timing of such payments are not known.
As of December 31, 2021, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements required pursuant to this item are included in Part IV, Item 15 of this Annual Report, and are presented beginning on page F-1.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(1) |
For a list of the financial statements included herein, see Index to the Consolidated Financial Statements on page F-1 of this Annual Report, incorporated into this Item by reference. |
(2) |
Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto. |
(3) |
Exhibits: |
Exhibit Number |
Description |
Schedule/ Form |
File No. |
Exhibit |
Filing Date |
23.1* | Consent of Independent Registered Public Accounting Firm, Mayer Hoffman McCann P.C. | ||||
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
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. | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
SAB BIOTHERAPEUTICS, INC. |
||
Date: April 28, 2023 |
By: |
/s/ Eddie J. Sullivan |
Eddie J. Sullivan |
||
Chief Executive Officer |
||
(Principal Executive Officer) |
SAB BIOTHERAPEUTICS, INC. |
||
Date: April 28, 2023 |
By: |
/s/ Russell Beyer |
Russell Beyer |
||
Chief Financial Officer |
||
(Principal Financial and Accounting Officer) |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
SAB Biotherapeutics, Inc. and Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of SAB Biotherapeutics, Inc. and Subsidiaries (“Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, consolidated statements of changes in redeemable preferred stock and stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Restatement of 2021 Financial Statements
As discussed in Note 2 to the financial statements, the 2021 financial statements have been restated to correct certain misstatements.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company's auditor since 2019.
/s/ Mayer Hoffman McCann P.C.
San Diego, California
April 14, 2023
SAB Biotherapeutics, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, | ||||||||
2021 (Restated) | 2020 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 33,206,712 | $ | 12,610,383 | ||||
Restricted cash | 6,338,306 | — | ||||||
Accounts receivable, net | 8,010,708 | 20,569,497 | ||||||
Prepaid expenses | 2,636,224 | 1,275,134 | ||||||
Total current assets | 50,191,950 | 34,455,014 | ||||||
Operating lease right-of-use assets | 2,615,204 | 3,053,022 | ||||||
Financing lease right-of-use assets | 4,019,322 | 4,184,427 | ||||||
Equipment, net | 24,314,455 | 14,845,470 | ||||||
Total assets | $ | 81,140,931 | $ | 56,537,933 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 4,458,525 | $ | 7,382,361 | ||||
Forward share purchase liability | 6,338,306 | — | ||||||
Notes payable – current portion | 1,796,724 | 538,731 | ||||||
Operating lease liabilities, current portion | 1,142,413 | 924,265 | ||||||
Finance lease liabilities, current portion | 161,050 | 194,717 | ||||||
Due to related party | 2,367 | 16,778 | ||||||
Deferred grant income | 100,000 | 100,000 | ||||||
Accrued expenses and other current liabilities | 12,455,888 | 1,904,878 | ||||||
Total current liabilities | 26,455,273 | 11,061,730 | ||||||
Operating lease liabilities, noncurrent | 1,653,185 | 2,372,777 | ||||||
Finance lease liabilities, noncurrent | 3,762,430 | 3,923,554 | ||||||
Warrant liabilities | 10,720,130 | — | ||||||
Notes payable, noncurrent | — | 172,037 | ||||||
Total liabilities | 42,591,018 | 17,530,098 | ||||||
Commitments and contingencies (Note 17) | ||||||||
Stockholders’ equity | ||||||||
Preferred stock; $ par value; shares authorized, shares issued and outstanding at December 31, 2021 and 2020 | — | — | ||||||
Common stock; $ par value; shares authorized at December 31, 2021 and 2020; and shares issued and outstanding at December 31, 2021 and 2020, respectively | 4,349 | 2,598 | ||||||
Additional paid-in capital | 67,674,515 | 50,989,657 | ||||||
Accumulated deficit | (29,128,951 | ) | (11,984,420 | ) | ||||
Total stockholders’ equity | 38,549,913 | 39,007,835 | ||||||
Total liabilities and stockholders’ equity | $ | 81,140,931 | $ | 56,537,933 |
See accompanying notes to the consolidated financial statements
SAB Biotherapeutics, Inc. and Subsidiaries
Consolidated Statements of Operations
Year Ended December 31, 2021 |
Year Ended December 31, 2020 |
|||||||
Revenue |
||||||||
Grant revenue |
$ | 60,876,078 | $ | 55,237,759 | ||||
Total revenue |
60,876,078 | 55,237,759 | ||||||
Operating expenses |
||||||||
Research and development |
57,183,589 | 27,908,659 | ||||||
General and administrative |
17,085,692 | 6,772,303 | ||||||
Total operating expenses |
74,269,281 | 34,680,962 | ||||||
(Loss) income from operations |
(13,393,203 | ) | 20,556,797 | |||||
Changes in fair value of warrant liabilities |
(4,151,068 | ) | — | |||||
Gain on debt extinguishment of Paycheck Protection Program SBA Loan |
665,596 | — | ||||||
Other income |
5,488 | 3,996 | ||||||
Interest expense |
(294,459 | ) | (469,151 | ) | ||||
Interest income |
23,115 | 26,131 | ||||||
Net (loss) income |
$ | (17,144,531 | ) | $ | 20,117,773 | |||
Earnings (loss) per common share attributable to the Company’s shareholders |
||||||||
Basic (loss) earnings per common share |
$ | (0.63 | ) | $ | 0.79 | |||
Diluted (loss) earnings per common share |
$ | (0.63 | ) | $ | 0.74 | |||
Weighted-average common shares outstanding – basic |
27,339,180 | 25,391,084 | ||||||
Weighted-average common shares outstanding – diluted |
27,339,180 | 27,011,482 |
See accompanying notes to the consolidated financial statements.
SAB Biotherapeutics, Inc. and Subsidiaries
Consolidated Statements of Changes In Redeemable Preferred Stock and Stockholders’ Equity (Deficit)
For the years ended December 31, 2021 and 2020
Redeemable Preferred Stock | Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A-2A Redeemable Preferred Stock | Series A Preferred Stock | Series A-1 Preferred Stock | Series A-2 Preferred Stock | Series B Preferred Stock | Common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 (as previously reported) | 3,333,333 | $ | 9,999,999 | 6,615,000 | $ | 662 | 2,525,800 | $ | 253 | 4,039,963 | $ | 404 | 1,236,786 | $ | 124 | 35,216,000 | $ | 3,522 | $ | 29,791,662 | $ | (32,102,193 | ) | $ | (2,305,566 | ) | ||||||||||||||||||||||||||||||||||
Retrospective application of reverse recapitalization | (3,333,333 | ) | (9,999,999 | ) | (6,615,000 | ) | (662 | ) | (2,525,800 | ) | (253 | ) | (4,039,963 | ) | (404 | ) | (1,236,786 | ) | (124 | ) | (10,570,449 | ) | (1,057 | ) | 10,002,499 | — | 9,999,999 | |||||||||||||||||||||||||||||||||
Balance at December 31, 2019, after effect of Business Combination | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | 24,645,551 | $ | 2,465 | $ | 39,794,161 | $ | (32,102,193 | ) | $ | 7,694,433 | |||||||||||||||||||||||||||||||||||
Issuance of stock in private offerings, net of issuance cost of $ | — | — | — | — | — | — | — | — | — | — | 1,327,855 | 133 | 9,900,073 | — | 9,900,206 | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | — | 1,295,423 | — | 1,295,423 | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | — | — | — | — | 20,117,773 | 20,117,773 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | 25,973,406 | $ | 2,598 | $ | 50,989,657 | $ | (11,984,420 | ) | $ | 39,007,835 | |||||||||||||||||||||||||||||||||||
Effect of Business Combination and recapitalization, net of redemptions and issuance costs of $ | — | — | — | — | — | — | — | — | — | — | 7,009,436 | 701 | 7,603,133 | — | 7,603,834 | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock, subject to forfeiture | — | — | — | — | — | — | — | — | — | — | 10,491,937 | 1,049 | — | — | 1,049 | |||||||||||||||||||||||||||||||||||||||||||||
Forward Share Purchase Agreement, partial settlement | — | — | — | — | — | — | — | — | — | — | — | — | 6,760,294 | — | 6,760,294 | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | — | 2,314,682 | — | 2,314,682 | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for exercise of stock options | — | — | — | — | — | — | — | — | — | — | 12,500 | 1 | 6,749 | — | 6,750 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | — | — | (17,144,531 | ) | (17,144,531 | ) | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | 43,487,279 | $ | 4,349 | $ | 67,674,515 | $ | (29,128,951 | ) | $ | 38,549,913 |
See accompanying notes to the consolidated financial statements.
SAB Biotherapeutics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Year Ended December 31, |
||||||||
2021 (Restated) | 2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net (loss) income |
$ | (17,144,531 | ) | $ | 20,117,773 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
||||||||
Gain on debt extinguishment of Paycheck Protection Program SBA Loan |
(665,596 | ) | — | |||||
Depreciation and amortization |
1,488,614 | 383,142 | ||||||
Amortization of right-of-use assets |
164,983 | 165,036 | ||||||
Stock-based compensation expense |
2,314,682 | 1,295,423 | ||||||
Gain on sale of equipment |
(5,488 | ) | (2,252 | ) | ||||
Changes in fair value of warrant liabilities |
4,151,068 | — | ||||||
Changes in operating assets and liabilities |
||||||||
Accounts receivable |
12,558,790 | (17,750,762 | ) | |||||
Prepaid expenses |
(1,258,348 | ) | (1,151,130 | ) | ||||
Right-of-use assets – operating lease |
(63,626 | ) | 215,122 | |||||
Accounts payable |
(2,935,521 | ) | 5,211,593 | |||||
Deferred income |
— | 100,000 | ||||||
Due to related party |
(2,727 | ) | 10,528 | |||||
Accrued expense and other current liabilities |
3,384,573 | 1,410,322 | ||||||
Net cash provided by operating activities |
1,986,873 | 10,004,795 | ||||||
Cash flows from investing activities: |
||||||||
Proceeds from the sale of equipment |
— | 9,000 | ||||||
Purchases of equipment |
(10,943,657 | ) | (12,731,702 | ) | ||||
Net cash used in investing activities |
(10,943,657 | ) | (12,722,702 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from Business Combination, net of transaction costs |
34,340,225 | — | ||||||
Proceeds from the sale of stock, net of issuance costs |
— | 9,900,206 | ||||||
Proceeds from Paycheck Protection Program SBA Loan |
— | 661,612 | ||||||
Payments on related party notes payable |
— | (1,364,644 | ) | |||||
Proceeds from issuance of notes payable |
2,840,619 | — | ||||||
Payments of notes payable |
(1,093,051 | ) | (32,506 | ) | ||||
Principal payments on finance leases |
(203,124 | ) | (182,347 | ) | ||||
Proceeds from exercise of stock options |
6,750 | — | ||||||
Net cash provided by financing activities |
35,891,419 | 8,982,321 | ||||||
Net increase in cash, cash equivalents, and restricted cash |
26,934,635 | 6,264,414 | ||||||
Cash, cash equivalents, and restricted cash |
||||||||
Beginning of year |
12,610,383 | 6,345,969 | ||||||
End of year |
$ | 39,545,018 | $ | 12,610,383 | ||||
Supplemental information on non-cash investing and finance activities: |
||||||||
Right-of-use assets obtained in exchange for operating lease liabilities |
$ | 505,187 | $ | 1,773,135 | ||||
Warrant liabilities assumed related to the Business Combination |
$ | 6,569,062 | $ | — | ||||
Liabilities assumed related to the Forward Share Purchase Agreement |
$ | 6,338,306 | $ | — | ||||
Financing fee liabilities assumed related to the Business Combination included in accrued expense and other current liabilities |
$ | 3,100,000 | $ | — | ||||
Unpaid financing fees included in accrued expense and other current liabilities |
$ | 2,000,000 | $ | — | ||||
Reconciliation of cash, cash equivalents, and restricted cash: |
||||||||
Cash and cash equivalents |
$ | 33,206,712 | $ | 12,610,383 | ||||
Restricted cash |
6,338,306 | — | ||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |
$ | 39,545,018 | $ | 12,610,383 |
See accompanying notes to the consolidated financial statements.
SAB BIOTHERAPEUTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(2) Summary of Significant Accounting Policies
A summary of the significant accounting policies applied in preparation of the accompanying consolidated financial statements is set forth below.
Restatement of Previously issued Financial Statements
● | The Company concluded that it did not correctly account for a financed insurance premium whereby a third-party lender prepaid the Company's annual insurance premiums to our insurance companies in exchange for a short-term interest bearing note (the “Insurance Financing Agreement”). The Company previously recognized, on its consolidated balance sheet, a current prepaid asset for the amount paid by the Company under the Insurance Financing Agreement in excess of the total amortized value of the prepaid insurance policy. The Company reassessed its accounting for the Insurance Financing Agreement and determined that the Insurance Financing Agreement should be classified as a current note payable with the full amount of the insurance premium recognized as current prepaid asset at the time the Company entered into the Insurance Financing Agreement. |
● | The Company concluded that the Insurance Financing Agreement and corresponding payment to the third-party lender constitutes a constructive receipt and disbursement of cash. As a result, the Company determined the cash flows from financing activities contained within the Annual Report on Form 10-K for the year ended December 31, 2021 is understated—this error is accompanied by a corresponding overstatement in cash flows from operating activities due to an understated prepaid asset. |
The Company has restated herein its audited financial statements for the year ended December 31, 2021.
December 31, 2021 | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 33,206,712 | $ | — | $ | 33,206,712 | ||||||
Restricted cash | 6,338,306 | — | 6,338,306 | |||||||||
Accounts receivable, net | 8,010,708 | — | 8,010,708 | |||||||||
Prepaid expenses | 864,513 | 1,771,711 | 2,636,224 | |||||||||
Total current assets | 48,420,239 | 1,771,711 | 50,191,950 | |||||||||
Operating lease right-of-use assets | 2,615,204 | — | 2,615,204 | |||||||||
Financing lease right-of-use assets | 4,019,322 | — | 4,019,322 | |||||||||
Equipment, net | 24,314,455 | — | 24,314,455 | |||||||||
Total assets | $ | 79,369,220 | $ | 1,771,711 | $ | 81,140,931 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 4,458,525 | $ | — | $ | 4,458,525 | ||||||
Forward share purchase liability | 6,338,306 | — | 6,338,306 | |||||||||
Notes payable – current portion | 25,013 | 1,771,711 | 1,796,724 | |||||||||
Operating lease liabilities, current portion | 1,142,413 | — | 1,142,413 | |||||||||
Finance lease liabilities, current portion | 161,050 | — | 161,050 | |||||||||
Due to related party | 2,367 | — | 2,367 | |||||||||
Deferred grant income | 100,000 | — | 100,000 | |||||||||
Accrued expenses and other current liabilities | 12,455,888 | — | 12,455,888 | |||||||||
Total current liabilities | 24,683,562 | 1,771,711 | 26,455,273 | |||||||||
Operating lease liabilities, noncurrent | 1,653,185 | — | 1,653,185 | |||||||||
Finance lease liabilities, noncurrent | 3,762,430 | — | 3,762,430 | |||||||||
Warrant liabilities | 10,720,130 | — | 10,720,130 | |||||||||
Notes payable, noncurrent | — | — | — | |||||||||
Total liabilities | 40,819,307 | 1,771,711 | 42,591,018 | |||||||||
Commitments and contingencies (Note 17) | ||||||||||||
Stockholders’ equity | ||||||||||||
Preferred stock; $ par value; shares authorized, shares issued and outstanding at December 31, 2021 and 2020 | — | — | — | |||||||||
Common stock; $ par value; shares authorized at December 31, 2021 and 2020; and shares issued and outstanding at December 31, 2021 and 2020, respectively | 4,349 | — | 4,349 | |||||||||
Additional paid-in capital | 67,674,515 | — | 67,674,515 | |||||||||
Accumulated deficit | (29,128,951 | ) | — | (29,128,951 | ) | |||||||
Total stockholders’ equity | 38,549,913 | — | 38,549,913 | |||||||||
Total liabilities and stockholders’ equity | $ | 79,369,220 | $ | 1,771,711 | $ | 81,140,931 |
Year Ended December 31, 2021 | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net (loss) income | $ | (17,144,531 | ) | $ | — | $ | (17,144,531 | ) | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||
Gain on debt extinguishment of Paycheck Protection Program SBA Loan | (665,596 | ) | — | (665,596 | ) | |||||||
Depreciation and amortization | 1,488,614 | — | 1,488,614 | |||||||||
Amortization of right-of-use assets | 164,983 | — | 164,983 | |||||||||
Stock-based compensation expense | 2,314,682 | — | 2,314,682 | |||||||||
Gain on sale of equipment | (5,488 | ) | — | (5,488 | ) | |||||||
Changes in fair value of warrant liabilities | 4,151,068 | — | 4,151,068 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Accounts receivable | 12,558,790 | — | 12,558,790 | |||||||||
Prepaid expenses | 513,363 | (1,771,711 | ) | (1,258,348 | ) | |||||||
Right-of-use assets – operating lease | (63,626 | ) | — | (63,626 | ) | |||||||
Accounts payable | (2,935,521 | ) | — | (2,935,521 | ) | |||||||
Deferred income | — | — | — | |||||||||
Due to related party | (2,727 | ) | — | (2,727 | ) | |||||||
Accrued expense and other current liabilities | 3,384,573 | — | 3,384,573 | |||||||||
Net cash provided by operating activities | 3,758,584 | (1,771,711 | ) | 1,986,873 | ||||||||
Cash flows from investing activities: | ||||||||||||
Proceeds from the sale of equipment | — | — | — | |||||||||
Purchases of equipment | (10,943,657 | ) | — | (10,943,657 | ) | |||||||
Net cash used in investing activities | (10,943,657 | ) | — | (10,943,657 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from Business Combination, net of transaction costs | 34,340,225 | — | 34,340,225 | |||||||||
Proceeds from issuance of notes payable | — | 2,840,619 | 2,840,619 | |||||||||
Payments of notes payable | (24,143 | ) | (1,068,908 | ) | (1,093,051 | ) | ||||||
Principal payments on finance leases | (203,124 | ) | — | (203,124 | ) | |||||||
Proceeds from exercise of stock options | 6,750 | — | 6,750 | |||||||||
Net cash provided by financing activities | 34,119,708 | 1,771,711 | 35,891,419 | |||||||||
Net increase in cash, cash equivalents, and restricted cash | 26,934,635 | — | 26,934,635 | |||||||||
Cash, cash equivalents, and restricted cash | ||||||||||||
Beginning of year | 12,610,383 | — | 12,610,383 | |||||||||
End of year | $ | 39,545,018 | $ | — | $ | 39,545,018 |
● | SAB Biotherapeutics’ shareholders have the largest portion of voting rights in the Company |
● | the Board and Management are primarily composed of individuals associated with SAB Biotherapeutics; |
● | the operations of SAB comprise the ongoing operations of the Company. |
December 31, 2021 | December 31, 2020 | |||||||
Cash and cash equivalents | $ | 33,206,712 | $ | 12,610,383 | ||||
Restricted cash | 6,338,306 | — | ||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ | 39,545,018 | $ | 12,610,383 |
(in years) | ||||
Animal facility equipment | 7 | |||
Laboratory equipment | 7 | |||
Leasehold improvements | Shorter of asset life or lease term | |||
Office furniture & equipment | 5 | |||
Vehicles | 5 |
Repairs and maintenance expenses are expensed as incurred.
Impairment of long-lived assets
The Company reviews the recoverability of long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If necessary, the Company compares the estimated undiscounted future net cash flows to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value, which is based either on discounted cash flows or appraised values in the period the impairment becomes known. The Company believes that long-lived assets are recoverable, and no impairment was deemed necessary, during the years ended December 31, 2021 and 2020.
Comprehensive income (loss)
The Company had no items of comprehensive income (loss) other than its net income (loss).
(i) | 25% of the Earnout Shares shall be released if, at any time during the five (5)-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $15.00 for any twenty (20) trading days within a period of thirty (30) consecutive trading days (the “First Earnout”). | |
(ii) | 25% of the Earnout Shares shall be released if, at any time during the five (5)-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $20.00 for any twenty (20) trading days within a period of thirty (30) consecutive trading days (the “Second Earnout”). | |
(iii) | 25% of the Earnout Shares shall be released if, at any time during the five (5)-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $25.00 for any twenty (20) trading days within a period of thirty (30) consecutive trading days (the “Third Earnout”). | |
(iv) | 25% of the Earnout Shares shall be released if, at any time during the five (5)-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $30.00 for any twenty (20) trading days within a period of thirty (30) consecutive trading days (the “Fourth Earnout” and together with the First Earnout, the Second Earnout and the Third Earnout, the “Earnouts”). |
Recapitalization | ||||
Cash - BCYP trust and cash, net of redemptions | $ | 22,535,723 | ||
Plus: restricted cash - Forward Share Purchase Agreement | 13,098,599 | |||
Less: cash transaction costs allocated to the Company's equity | (1,294,097 | ) | ||
Total | $ | 34,340,225 |
Recapitalization | ||||
Cash - BCYP trust and cash, net of redemptions | $ | 22,535,723 | ||
Plus: restricted cash - Forward Share Purchase Agreement | 13,098,599 | |||
Less: non-cash net working capital assumed from BCYP | (5,067,682 | ) | ||
Less: forward share purchase liability assumed from BCYP | (13,098,599 | ) | ||
Less: fair value of redeemable warrants | (6,569,062 | ) | ||
Less: transaction costs allocated to the Company's equity | (3,294,096 | ) | ||
Total | $ | 7,604,883 |
Shares | ||||
Common stock, reedeemable and outstanding prior to Business Combination | 11,500,000 | |||
Less: redemption of BCYP shares | (8,030,289 | ) | ||
Common stock of BCYP | 3,469,711 | |||
BCYP Founder and private shares | 3,292,200 | |||
Shares issued for services | 247,525 | |||
Total BCYP shares | 7,009,436 | |||
SAB Biotherapeutics, Inc and subsidiaries shareholders | 36,465,343 | |||
Total shares of common stock immediately after Business Combination | 43,474,779 |
Assets Acquired | ||||
BCYP trust and cash, net of redemptions | $ | 22,535,723 | ||
Restricted cash - Forward Share Purchase Agreement | 13,098,599 | |||
Other assets | 102,742 | |||
Assets acquired | $ | 35,737,064 | ||
Liabilities Assumed | ||||
Forward share purchase liability | $ | 13,098,599 | ||
Fair value of redeemable warrants | 6,569,062 | |||
Other liabilities and accrued expenses | 5,170,424 | |||
Liabilities assumed | 24,838,085 | |||
Net Assets Acquired | $ | 10,898,979 |
Year Ended December 31, 2021 | ||||
Calculation of basic and diluted EPS attributable to the Company’s shareholders | ||||
Net loss attributable to the Company’s shareholders | $ | (17,144,531 | ) | |
Weighted-average common shares outstanding – basic and diluted | 27,339,180 | |||
Net loss per common share, basic and diluted | $ | (0.63 | ) |
Year Ended December 31, 2021 | ||||
Stock options | 3,724,957 | |||
Common stock warrants | 5,958,600 | |||
Earnout shares (1) | 10,491,937 | |||
Contingently issuable earnout shares from unexercised Rollover Options | 1,508,063 | |||
Total | 21,683,557 |
(1) | As the Earnout shares are subject to certain vesting requirements not satisfied as of the year ended December 31, 2021, the Earnout Shares held in escrow are excluded from calculating both basic and diluted earnings per share. |
Year Ended December 31, 2020 | ||||
Calculation of basic EPS attributable to the Company’s shareholders | ||||
Net income attributable to the Company’s shareholders | $ | 20,117,773 | ||
Weighted-average common shares outstanding – basic | 25,391,084 | |||
Net earnings per share, basic | $ | 0.79 | ||
Calculation of diluted EPS attributable to the Company’s shareholders | ||||
Net income attributable to the Company’s shareholders | $ | 20,117,773 | ||
Weighted-average common shares outstanding – diluted | 27,011,482 | |||
Net earnings per share, diluted | $ | 0.74 |
Year Ended December 31, 2020 | ||||
Weighted-average common shares outstanding – basic | 25,391,084 | |||
Stock options | 1,620,398 | |||
Total | 27,011,482 |
2021 | 2020 | |||||||
Laboratory equipment | $ | 7,431,988 | $ | 5,205,346 | ||||
Animal facility | 8,357,667 | 3,371,125 | ||||||
Animal facility equipment | 1,253,879 | 1,003,629 | ||||||
Construction-in-progress | 4,608,778 | 6,729,673 | ||||||
Leasehold improvements | 5,700,364 | 185,971 | ||||||
Vehicles | 135,593 | 96,693 | ||||||
Office furniture and equipment | 46,202 | 20,219 | ||||||
Less: accumulated depreciation and amortization | 3,220,016 | 1,767,186 | ||||||
Property, plant and equipment net | $ | 24,314,455 | $ | 14,845,470 |
2021 | 2020 | |||||||
200L commercial facility | $ | — | $ | 4,148,113 | ||||
200L commercial facility equipment | — | 486,381 | ||||||
New animal barn (#6) | — | 1,551,167 | ||||||
New office space (at Headquarters) | 11,183 | 477,907 | ||||||
Laboratory space at Headquarters | 2,506,482 | — | ||||||
Lab equipment at Headquarters | 246,801 | — | ||||||
IT equipment for new office space | 212,209 | — | ||||||
Software | 137,811 | — | ||||||
Bioreactors | 1,280,728 | — | ||||||
Other | 213,564 | 66,105 | ||||||
Total construction-in-progress | $ | 4,608,778 | $ | 6,729,673 |
● | In December 2018, the Company entered into a finance lease with Dakota Ag Properties for a new animal facility which includes the surrounding land. The facility and the land have been accounted for as separate lease components. The lease is based upon payback of $4,000,000 in construction costs, with a 20-year term at an interest rate of 8%. The monthly payment for this lease is $33,458. The Company has the option to purchase the asset at any time during the term of the lease for the balance of the unamortized lease payments. | |
● | In December 2018, the Company entered into an equipment lease for a 12,000-gallon propane tank that is located on the Company’s animal facility. The lease is for years, with an annual payment of $8,199. The Company has the option to purchase the asset at any time during the term of the lease for the balance of the unamortized lease payments. | |
● | In July 2018, the Company entered into a lease agreement with a bank, for a Ruby Cell Analyzer. The lease agreement is for a -year term. The monthly payment for this lease is $807. The Company has the option to purchase the asset at the end of the lease for $1. | |
● | In March 2019, the Company entered into lease agreements for laboratory equipment. The leases are each for a 3-year term and a combined monthly payment of $5,956. Both leases have a $1 purchase option at the end of the lease term. |
Animal Facility | 40 years |
Equipment |
|
Land |
|
Operating | Finance | |||||||
Weighted-average remaining lease term |
|
| ||||||
Weighted-average discount rate | 4.58% | 7.71% |
Operating | Finance | |||||||
2022 | $ | 1,240,333 | $ | 444,928 | ||||
2023 | 1,169,559 | 406,339 | ||||||
2024 | 535,943 | 401,496 | ||||||
2025 | — | 401,496 | ||||||
2026 | — | 401,496 | ||||||
Thereafter | — | 4,784,494 | ||||||
Undiscounted future minimum lease payments | 2,945,835 | 6,840,249 | ||||||
Less: Amount representing interest payments | (150,237 | ) | (2,916,769 | ) | ||||
Total lease liabilities | 2,795,598 | 3,923,480 | ||||||
Less current portion | (1,142,413 | ) | (161,050 | ) | ||||
Noncurrent lease liabilities | $ | 1,653,185 | $ | 3,762,430 |
(9) Accrued Expenses and Other Current Liabilities
2021 | 2020 | |||||||
Accrued vacation | $ | 552,629 | $ | 438,936 | ||||
Accrued payroll | 674,858 | 314,451 | ||||||
Accrued construction-in-progress | 548,988 | 637,776 | ||||||
Accrued supplies | 709,027 | 301,989 | ||||||
Accrued consulting | 179,082 | 120,744 | ||||||
Accrued clinical trial expense | 423,634 | — | ||||||
Accrued outside laboratory services | 128,752 | — | ||||||
Accrued bonus & severance | 1,804,288 | — | ||||||
Accrued contract manufacturing | 1,000,824 | — | ||||||
Accrued legal | 833,646 | — | ||||||
Accrued financing fees payable | 5,100,000 | — | ||||||
Accrued franchise tax payable | 216,251 | — | ||||||
Other accrued expenses | 283,909 | 90,982 | ||||||
12,455,888 | 1,904,878 |
2021 (Restated) | 2020 | |||||||
Tractor loan | $ | 25,013 | $ | 49,156 | ||||
PPP loan | — | 661,612 | ||||||
Insurance financing note payable | 1,771,711 | — | ||||||
Total notes payable | 1,796,724 | 710,768 | ||||||
Less: notes payable - current portion | 1,796,724 | 538,731 | ||||||
Notes payable, noncurrent | $ | — | $ | 172,037 |
The total premiums, taxes and fees financed is approximately $2,841,000 with an annual interest rate of 2.85%. In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker, the Company unconditionally promise to pay Lender the amount Financed plus interest and other charges permitted under the Agreement. At December 31, 2021 the Company recognized approximately $1,772,000 as insurance financing note payable in its consolidated balance sheet. The Company will pay the insurance financing through installment payments with the last payment being on September 22, 2022.
(11) Preferred Stock
Options | Weighted Average Fair Value | Weighted Average Exercise Price | ||||||||||
Balance, December 31, 2019 | 3,139,855 | $ | 0.82 | $ | 0.88 | |||||||
Granted | 962,088 | $ | 3.44 | $ | 2.69 | |||||||
Balance, December 31, 2020 | 4,101,943 | $ | 1.43 | $ | 1.30 | |||||||
Granted | 1,346,947 | $ | 5.36 | $ | 5.81 | |||||||
Forfeited | 328,718 | $ | 2.17 | $ | 2.06 | |||||||
Exercised | 12,500 | $ | 0.39 | $ | 0.54 | |||||||
Balance, December 31, 2021 | 5,107,672 | $ | 2.30 | $ | 2.44 | |||||||
Unvested at December 31, 2021 | 1,382,715 | $ | 5.41 | $ | 5.92 | |||||||
Vested and exercisable at December 31, 2021 | 3,724,957 | $ | 1.14 | $ | 1.16 |
2021 | 2020 | |||||||
Research and development | $ | 964,926 | $ | 635,824 | ||||
General and administrative | 1,349,756 | 659,599 | ||||||
Total | $ | 2,314,682 | $ | 1,295,423 |
Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities. | |
Level 2: | Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs that reflect the reporting entity’s own assumptions. |
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 |
● | in whole and not in part; | |
● | at a price of $0.01 per warrant; | |
● | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and | |
● | if, and only if, the reported last sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a | |
● | 30-trading day period ending three business days before the Company send the notice of redemption to the warrant holders. |
2021 | ||||
Balance, December 31, 2020 | $ | — | ||
Initial measurement on the Closing Date | 244,062 | |||
Change in fair value of Private Placement Warrant liability | 183,568 | |||
Balance, December 31, 2021 | $ | 427,630 |
(Initial Measurement) October 22, 2021 | December 31, 2021 | |||||||
Risk-free interest rate | 1.22 | % | 1.24 | % | ||||
Expected term remaining (years) | 5.00 | 4.81 | ||||||
Implied volatility | 25.5 | % | 43.0 | % | ||||
Closing common stock price on the measurement date | $ | 8.44 | $ | 7.81 |
2021 | 2020 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 5,078,429 | $ | 2,659,082 | ||||
Stock-based compensation | 1,156,235 | 600,592 | ||||||
Vacation accrual | 99,300 | 84,553 | ||||||
Lease liabilities | 623,286 | 727,587 | ||||||
Other accrued expenses | 1,119,721 | — | ||||||
Start-up costs | 297,136 | — | ||||||
Total deferred tax assets | $ | 8,374,107 | $ | 4,071,814 | ||||
Less valuation allowance | (5,300,689 | ) | (2,320,958 | ) | ||||
Total deferred tax assets after valuation allowance | 3,073,418 | 1,750,856 | ||||||
Deferred tax liabilities: | ||||||||
Operating lease right-of-use asset | 551,547 | 641,135 | ||||||
Depreciation and amortization | 2,521,871 | 1,109,721 | ||||||
Total deferred tax liabilities | 3,073,418 | 1,750,856 | ||||||
Net deferred tax asset (liability) | $ | — | $ | — |
2021 | 2020 | |||||||||||||||
Rate reconciliation: | ||||||||||||||||
Net (loss) income before tax | $ | (17,144,531 | ) | $ | 20,117,773 | |||||||||||
Federal income tax at statutory rate | (3,600,352 | ) | 21.00 | % | 4,224,732 | 21.00 | % | |||||||||
State income tax | (9,849 | ) | 0.06 | % | — | — | % | |||||||||
Permanent items | 1,029,874 | (6.01 | )% | 918 | (0.01 | )% | ||||||||||
Valuation allowance | 2,679,238 | (15.63 | )% | (4,225,651 | ) | (20.99 | )% | |||||||||
Other | (98,911 | ) | 0.58 | % | 1 | — | % | |||||||||
$ | — | — | % | $ | — | — | % |
(15) Related Party Transactions
1 Year SAB Biotherapeutics Chart |
1 Month SAB Biotherapeutics Chart |
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