SAB Biotherapeutics(SABS) - 2022 Q1 - Quarterly Report

Financial Performance - Total revenue for the three months ended March 31, 2022, was $11.8 million, a decrease of 30.2% from $16.9 million in the same period of 2021[136] - Net income for the three months ended March 31, 2022, was $985,863, down from $1,409,834 in the same period of 2021[164] - The company recognized approximately $11.7 million in grant income from the Department of Defense for the three months ended March 31, 2022, compared to $16.9 million in the same period of 2021[150] - Total revenue for the three months ended March 31, 2022, was $11,803,077, a decrease of $5,124,657 or 30.3% compared to $16,927,734 in the same period of 2021[164] Expenses - Research and development expenses for the three months ended March 31, 2022, were $13.3 million, an increase of 4% from $12.8 million in the same period of 2021[138] - General and administrative expenses for the three months ended March 31, 2022, were $5.2 million, up 57.6% from $3.3 million in the same period of 2021[138] - Research and development expenses increased by $542,340 or 4.2% to $13,324,344 for the three months ended March 31, 2022, compared to $12,782,004 in 2021[167] - General and administrative expenses rose by $1,854,266 or 55.7% to $5,186,072 for the three months ended March 31, 2022, compared to $3,331,806 in 2021[168] Funding and Financial Position - The company has approximately $78.2 million in funding remaining for current government grants, with an additional $1.6 million pending approval for extensions[136] - The company has raised approximately $82.5 million from equity financings since inception as of March 31, 2022[180] - The company had $22.4 million in cash and cash equivalents as of March 31, 2022, down from $33.2 million as of December 31, 2021[174] - Future capital requirements will depend on securing additional government grants and contracts for product development and commercialization[177] Workforce and Operations - The company has experienced workforce growth, increasing from 139 employees as of December 31, 2021, to 148 employees as of March 31, 2022[138] - The company plans to continue significant investments in research and development, particularly in infectious disease, autoimmune, and oncology indications[138] Tax and Compliance - Income tax expense increased by approximately $92,000 to $92,281 for the three months ended March 31, 2022, primarily due to changes in tax regulations[172] - The company had approximately $22.4 million of federal net operating loss carryforwards as of March 31, 2022, which are subject to review and potential adjustment by tax authorities[191] - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of reduced reporting requirements[218] - The company has elected to utilize reduced disclosure obligations, which may result in different information being provided to shareholders compared to other public companies[219] - The company has opted for an extended transition period for complying with new accounting standards, which may affect comparability with other public companies[220] Cash Flow and Activities - Net cash used in operating activities decreased by $19.7 million to $(10.3) million for the three months ended March 31, 2022, compared to $9.5 million in the same period of 2021, primarily due to a $5.1 million decrease in revenue and a $2.0 million increase in general and administrative expenses[186] - Net cash used in investing activities improved by $0.6 million, totaling $(1.3) million for the three months ended March 31, 2022, compared to $(1.9) million in the same period of 2021, mainly due to reduced equipment purchases and completion of HQ expansion[187] - Net cash used in financing activities increased by $5.5 million to $(5.6) million for the three months ended March 31, 2022, compared to $(45.5) thousand in the same period of 2021, primarily due to the settlement of the Forward Share Purchase Agreement[188] Market and Risk Factors - The company’s primary exposure to market risk is interest income volatility, which is not expected to be materially affected by a 10% change in market interest rates due to current low rates[223] - The company conducts its business in U.S. dollars, thus avoiding financial risks from exchange rate fluctuations[224] - The COVID-19 pandemic did not materially impact the company's business, operating results, or financial condition, although future uncertainties remain[216] - The company remains focused on maintaining operations, liquidity, and financial flexibility amid disruptions from the COVID-19 pandemic[217] Other Financial Metrics - The company recorded a gain on debt extinguishment of $665,596 related to the forgiveness of the Paycheck Protection Program Loan in the previous year[183] - Interest income increased by $2,427 or 44.1% to $7,933 for the three months ended March 31, 2022, compared to $5,506 in 2021[171] - Stock-based compensation expense for the three months ended March 31, 2022, was $0.9 million, up from $0.3 million in the same period of 2021, with $7.5 million of total unrecognized stock-based compensation cost related to non-vested options expected to be recognized over 2.27 years[204] - The fair value of Public Warrant liabilities changed by approximately $7.5 million for the three months ended March 31, 2022, with the initial measurement on the Closing Date being approximately $6.3 million[209] - The risk-free interest rate increased to 2.42% as of March 31, 2022, from 1.24% as of December 31, 2021, while implied volatility rose to 49.0% from 43.0%[210] - The company recorded a valuation allowance increase of approximately $1.6 million on its net deferred tax assets during the three months ended March 31, 2022[194] - There were no material changes outside of the ordinary course of business to the company's commitments and contractual obligations as of March 31, 2022[190] - Total contractual obligations and commitments as of March 31, 2022, amounted to $9.4 million, with $1.7 million due within one year and $2.2 million due in 1-3 years[189] - The company received 100% of its total revenue through grants from government organizations for the three months ended March 31, 2022, and 2021, with no receivables written off[222]