SAB Biotherapeutics Inc

Previous wording

Total revenue recognized from government grants was approximately $945 thousand and $581 thousand for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Total revenue recognized from government grants was approximately $263 thousand and $1.2 million for the three and six months ended June 30, 2024, respectively, and $86 thousand and $667 thousand for the three and six months ended June 30, 2023, respectively.

Previous wording

National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”) (Federal Award #1R41AI131823-02) – this grant was for approximately $1.5 million and had an original term of April 2019 through March 2021. The grant was subsequently amended to extend the end date to March 2023. No grant income was recognized for this grant for the three months ended March 31, 2024 and approximately $192 thousand of grant income was recognized for the three months ended March 31, 2023. This grant was completed as of June 30, 2023.

Current wording

National Institute of Health - National Institute of Allergy and Infectious Disease (“NIH-NIAID”) (Federal Award #1R41AI131823-02) – this grant was for approximately $1.5 million and had an original term of April 2019 through March 2021. The grant was subsequently amended to extend the end date to March 2023. No grant income was recognized for this grant for the three and six months ended June 30, 2024. No grant income was recognized for this grant for the three months ended June 30, 2023 and approximately $192 thousand of grant income was recognized for the six months ended June 30, 2023. This grant was completed as of June 30, 2023.

Previous wording

NIH-NIAID through Geneva Foundation (Federal Award #1R01AI132313-01, Subaward #S-10511-01) – this grant was for approximately $2.7 million and had an original term of August 2017 through July 2021. The grant was subsequently amended to extend the end date to July 2023. No grant income was recognized for the three months ended March 31, 2024, and approximately $236 thousand of grant income was recognized for the three months ended March 31, 2023. This grant was completed as of June 30, 2023.

Current wording

NIH-NIAID through Geneva Foundation (Federal Award #1R01AI132313-01, Subaward #S-10511-01) – this grant was for approximately $2.7 million and had an original term of August 2017 through July 2021. The grant was subsequently amended to extend the end date to July 2023. No grant income was recognized for the three and six months ended June 30, 2024, and approximately $37 thousand and $273 thousand of grant income was recognized for the three and six months ended June 30, 2023, respectively. This grant was completed as of June 30, 2023.

Previous wording

US Department of Defense (“DoD”), Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) through Advanced Technology International – this grant was for a potential of $25 million, awarded in stages starting in August 2019 and with potential stages running through February 2023. Additional contract modifications were added to this contract in 2020 and 2021 for work on a COVID therapeutic, bringing the contract total to $203.6 million. Deferred grant income recognized was approximately $945 thousand and $153 thousand for the three months ended March 31, 2024 and 2023, respectively. This grant was terminated in 2022.

Current wording

US Department of Defense (“DoD”), Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) through Advanced Technology International – this grant was for a potential of $25 million, awarded in stages starting in August 2019 and with potential stages running through February 2023. Additional contract modifications were added to this contract in 2020 and 2021 for work on a COVID therapeutic, bringing the contract total to $203.6 million. Deferred grant income recognized was approximately $263 thousand and $1.2 million for the three and six months ended June 30, 2024, respectively and $44 thousand and $197 thousand for the three and six months ended June 30, 2023, respectively. This grant was terminated in 2022.

Previous wording

The grants for our Rapid Response contract with JPEO (the “JPEO Rapid Response Contract”) are cost reimbursement agreements, with reimbursement of qualified direct research and development expense (labor and consumables) with an overhead charge (based on actual, reviewed quarterly) and a fixed fee (9%).

Current wording

The grants for the Company’s Rapid Response contract with JPEO (the “JPEO Rapid Response Contact”) are cost reimbursement agreements, with reimbursement of qualified direct research and development expense (labor and consumables) with an overhead charge (based on actual, reviewed quarterly) and a fixed fee (9%).

Previous wording

On August 3, 2022, we received notice from the DoD terminating the JPEO Rapid Response contract (the “JPEO Rapid Response Contract Termination”). We engaged in negotiations with the DoD to compensate us for services provided prior to the JPEO Rapid Response Contract Termination and costs we would be expected to bear in future periods. A termination and settlement proposal was submitted the DoD on September 9, 2022; we submitted a final invoice on December 15, 2022; and received payment from the DoD on or about January 12, 2023. The terms of the arrangement provide for a cost-reimbursable structure, and state that the parties will work in good faith equitable reimbursement for work performed toward accomplishment of the tasks provided in the agreement. At this time, other than certain deferred obligations (presented within deferred grant income within our condensed consolidated unaudited balance sheet) potentially payable to the DoD solely due to subsequent negotiations with third-party vendors, we believe and have been advised there is a reasonable, good faith basis for the position that no present or future obligations exist. Revenue recognized subsequent to the JPEO Rapid Response Contract Termination relates to satisfaction of residual obligations under the termination and settlement agreement—see Note 2, Summary of Significant Accounting Policiesin our condensed consolidated financial statements for further information about our established revenue recognition process.

Current wording

On August 3, 2022, the Company received notice from the DoD terminating the JPEO Rapid Response contract (the “JPEO Rapid Response Contract Termination”). The Company engaged in negotiations with the DoD to compensate the Company for services provided prior to the JPEO Rapid Response Contract Termination and costs the Company would be expected to bear in future periods. A termination and settlement proposal was submitted to the DoD on September 9, 2022; the Company submitted a final invoice on December 15, 2022; and received payment from the DoD on or about January 12, 2023. The terms of the arrangement provide for a cost-reimbursable structure, and state that the parties will work in good faith equitable reimbursement for work performed toward accomplishment of the tasks provided in the agreement. At this time, other than certain deferred obligations (presented within deferred grant income within the Company’s condensed consolidated unaudited balance sheet) potentially payable to the DoD solely due to subsequent negotiations with third-party vendors, the Company believes and has been advised there is a reasonable, good faith basis for the position that no present or future obligations exist. Revenue recognized subsequent to the JPEO Rapid Response Contract Termination relates to satisfaction of residual obligations under the termination and settlement agreement—see Note 2, Summary of Significant Accounting Policies for further information about the Company’s established revenue recognition process.

Previous wording

We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications. We expect to hire additional employees and continue research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period as a percentage of revenue.

Current wording

Research and development activities consist of discovery research for our platform development and the indications we are working on. For SAB-142, Avance Clinical PTY, Ltd (“Avance”), acts as the CRO overseeing our Phase 1 safety study. This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current. For the three and six months ended June 30, 2024 and 2023, we continued to incur costs to advance our progress towards commercialization of SAB-142. We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications. We expect to hire additional employees and continue research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period as a percentage of revenue.

Previous wording

Research and development expenses by component for the three months ended March 31, 2024 and 2023:

Current wording

Research and development expenses by component for the three and six months ended June 30, 2024 and 2023:

Previous wording

General and administrative expenses primarily consist of salaries, benefits, and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs. We expect that our general and administrative expenses will continue to increase in future periods, primarily due to increased headcount to support anticipated growth in the business and due to incremental costs associated with operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC and stock exchange listing standards, public relations, insurance and professional services. We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue.

Current wording

General and administrative expenses primarily consist of salaries, benefits, and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs. We expect that our general and administrative expenses will continue to increase in future periods, primarily due to increased headcount to support anticipated growth in the business and due to incremental costs associated with operating as a public company. These costs include expenses related to compliance with rules and regulations applicable to companies listed on a securities exchange, reporting obligations pursuant to SEC and stock exchange listing standards, public relations, insurance, and professional services. Additionally, we anticipate incurring expenses related to the remediation of material weaknesses in our internal control over financial reporting, which involve implementing new processes and engaging with a third-party firm. We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue.

Previous wording

Interest expense consists primarily of interest related to borrowings under notes payable for equipment, abated rent, and insurance financing.

Current wording

Interest expense consists primarily of interest related to abated rent and insurance financing.

Previous wording

Comparison of the three months ended March 31, 2024 and 2023

Current wording

Comparison of the three and six months ended June 30, 2024 and 2023

Previous wording

Revenue increased by $363 thousand, or 62.5%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to the JPEO Rapid Response Contract Termination. Included in revenues for the three months ended March 31, 2024, are closeout activities and charges of $945 thousand due to outside services for laboratory supply disposal, as compared to $52 thousand for supplies, $151 thousand for labor, and $378 thousand for contract manufacturing for the three months ended March 31, 2023.

Current wording

Revenue increased by $178 thousand, or 207.7%, in the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to the JPEO Rapid Response Contract Termination. Included in revenues for the three months ended June 30, 2024, are closeout activities and charges of $263 thousand due to outside services for laboratory supply disposal, as compared to $25 thousand for supplies, $56 thousand for contract manufacturing, and $4 thousand for license fee income for the three months ended June 30, 2023.

Previous wording

Research and development expenses increased by $3.6 million, or 79.6%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to increases in outside lab services (year-over-year increase of $1.5 million, 919.1%), salaries and benefits (year-over-year increase of $0.6 million, 33.7%), an out-of-period adjustment of $0.9 million of amortization expense, overhead (year-over-year increase of $0.6 million, 29.4%), project consulting (year-over-year increase of $0.1 million, 22.8%) offset by a decrease in laboratory supplies (year-over-year decrease of $0.1 million, 13.7%).

Current wording

Research and development expenses increased by $6.6 million, or 80.2%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to increases in outside lab services (year-over-year increase of $2.7 million, 739.0%), salaries and benefits (year-over-year increase of $1.4 million, 41.5%), an out-of-period adjustment of $0.9 million of amortization expense, overhead (year-over-year increase of $0.3 million, 12.2%), project consulting (year-over-year increase of $0.2 million, 82.6%), clinical trial costs (year-over-year increase of $1.3 million, (814.2%), laboratory supplies (year-over-year increase of $0.1 million, 11.8%) offset by a decrease in animal care (year-over-year decrease of $0.4 million, 58.3%).

Previous wording

General and administrative expenses increased by $0.7 million, or 21.5%, in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to salaries and benefits (year-over-year increase of $0.9 million, 76.1%), project consulting (year-over-year increase of $0.1 million, 63.6%), offset by a decrease in other administrative support fees relating to IT, human resources, and legal (year-over-year decrease of $0.2 million, 14.5%) and insurance costs (year-over-year decrease of $0.1 million, 27.9%). We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance costs as well as investor and public relations expenses associated with being a public company.

Current wording

General and administrative expenses increased by $1.7 million, or 26.5%, in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to salaries and benefits (year-over-year increase of $1.7 million, 72.3%), project consulting (year-over-year increase of $0.1 million, 36.3%), offset by a decrease in other administrative support fees relating to IT, human resources, and insurance costs (year-over-year decrease of $0.2 million, 29.8%). We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance costs as well as investor and public relations expenses associated with being a public company. Additionally, we anticipate incurring expenses related to the remediation of material weaknesses in our internal control over financial reporting, which involve implementing new processes and engaging with a third-party firm.

Previous wording

Total non-operating income increased by $5.9 million, or 7096.6% in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to the change in fair value of warrant liabilities (year-over-year increase of $5.4 million, 6521.2%), and Australian research and development tax credit (year-over-year increase of $0.5 million).

Current wording

Total non-operating income increased by $8.8 million, or 3201.9% in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to the change in fair value of warrant liabilities (year-over-year increase of $8.0 million, 2895.3%), and Australian research and development tax credit (year-over-year increase of $0.8 million).

Previous wording

Interest income increased by $0.4 million, or 758.6%, during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.

Current wording

Interest income increased by $0.3 million, or 1211.1%, during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.

Previous wording

As of March 31, 2024 and December 31, 2023, we had $14.0 million and $56.6 million, respectively, of cash and cash equivalents.

Current wording

As of June 30, 2024 and December 31, 2023, we had $37.3 million and $56.6 million, respectively, of cash and cash equivalents and investments.

Previous wording

We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced level there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary. Based on our current level of operating expenses, existing resources will be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.

Current wording

We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced level there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary. Based on our current level of operating expenses, existing resources will not be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.

Previous wording

The total premiums, taxes and fees financed is approximately $765 thousand with an annual interest rate of 7.96%. In consideration of the premium payment by Lender to the insurance companies or the agent or broker, we unconditionally promises to pay Lender the amount financed plus interest and other charges permitted under the agreement. We paid the insurance financing through installment payments with the last payment for the current note being September 22, 2024. At March 31, 2024 and December 31, 2023, we recognized approximately $294 thousand and $509 thousand, respectively, as an insurance financing note payable in our condensed consolidated balance sheets.

Current wording

The total premiums, taxes and fees financed is approximately $765 thousand with an annual interest rate of 7.96%. 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. We paid the insurance financing through installment payments with the last payment for the current note being September 22, 2024. At June 30, 2024 and December 31, 2023, we recognized approximately $74 thousand and $509 thousand, respectively, as an insurance financing note payable in our condensed consolidated balance sheets.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Previous wording

Net cash used by operating activities increased by $9.1 million in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to a increase in cash used in operating activities related to change in our operating assets and liabilities of $7.0 million and a increase in our net loss adjusted for non-cash items of $2.2 million. Year-over-year changes in cash used by operating activities is explained by shifts in the non-cash working capital balances as we continue to invest in the development of our lead product candidate, SAB-142.

Current wording

Net cash used in operating activities increased by $12.0 million in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to an increase in cash used in operating activities related to change in our operating assets and liabilities of $6.8 million and an increase in our net loss adjusted for non-cash items of $5.2 million. Year-over-year changes in cash used by operating activities is explained by shifts in the non-cash working capital balances as we continue to invest in the development of our lead product candidate, SAB-142.

Previous wording

Net cash used by investing activities increased by $31.3 million in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to an increase in purchases of investment securities.

Current wording

Net cash used by investing activities increased by $20.1 million in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to an increase in purchases of investment securities.

Previous wording

Net cash used by financing activities remained steady in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due a decrease in payments on financing agreements for our insurance agreements offset by an increase in payment for deferred issuance costs.

Current wording

Net cash used by financing activities remained steady in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due a decrease in payments on financing agreements for our insurance agreements offset by an increase in payment for deferred issuance costs.

Previous wording

We continue to record a valuation allowance on its net deferred tax assets. The valuation increased by approximately $2.2 million during the three months ended March 31, 2024. We have not recognized any reserves for uncertain tax positions.

Current wording

We continue to record a valuation allowance on its net deferred tax assets. The valuation increased by approximately $4.6 million during the six months ended June 30, 2024. We have not recognized any reserves for uncertain tax positions.

Previous wording

Our accounts for short-term investments in accordance with Accounting Standard Codification (ASC) Topic 320, Investments - Debt and Equity Securities. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each reporting period.

Current wording

We account for our short-term investments in accordance with Accounting Standard Codification (ASC) Topic 320, Investments - Debt and Equity Securities. Our management determines the appropriate classification of our investments at the time of purchase and reevaluates such determinations at each reporting period.

Previous wording

At March 31, 2024, our short and long-term investments consisted of U.S. treasury securities with original maturity exceeding 90 days and investments in exchange traded mutual funds. We classify these securities as both current and non-current depending on their time to maturity.

Current wording

As of June 30, 2024, our short-term investments consisted of U.S. treasury securities with original maturity exceeding 90 days and investments in exchange-traded mutual funds. We classify these securities as both current and non-current depending on their time to maturity. We consider all of our securities for which there is a determinable fair market value, and there are no restrictions on our ability to sell within the next twelve months, as available-for-sale securities.

Previous wording

Trading securities are measured at fair value with unrealized gains and losses reported within other income in our condensed consolidated statement of operations. Available-for-sale debt securities are measured at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in our condensed consolidated statement of operations. We consider all of its securities for which there is a determinable fair market value, and there are no restrictions on our ability to sell within the next twelve months, as available-for-sale securities.

Current wording

We recognize the change in fair value of available-for-sale equity securities within other income in the condensed consolidated statement of operations and comprehensive loss, and available-for-sale debt securities are measured at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in the condensed consolidated statement of operations and comprehensive loss.

Previous wording

We review its investments at each reporting date to identify and evaluate whether a decline in fair value below the amortized cost basis of available-for-sale securities is due to credit-related factors and determines if such unrealized losses are the result of credit losses that require impairment. Factors considered in determining whether an unrealized loss is the result of a credit loss or other factors include the extent to which the fair value is less than the cost basis, any changes to the rating of the security by a rating agency, the financial condition and near-term prospects of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any adverse legal or regulatory events affecting the issuer or issuer’s industry, any significant deterioration in economic condition and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

Current wording

We review our investments at each reporting date to identify and evaluate whether a decline in fair value below the amortized cost basis of available-for-sale debt securities is due to credit-related factors and determine if such unrealized losses are the result of credit losses that require impairment. Factors considered in determining whether an unrealized loss is the result of a credit loss or other factors include the extent to which the fair value is less than the cost basis, any changes to the rating of the security by a rating agency, the financial condition and near-term prospects of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any adverse legal or regulatory events affecting the issuer or issuer’s industry, any significant deterioration in economic condition and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

Previous wording

We did not recognize any credit losses on its short-term or long-term investments during the three months ended March 31, 2024 and 2023.

Current wording

We did not recognize any credit losses on our short-term investments during the six months ended June 30, 2024 and 2023.

Previous wording

During the three months ended March 31, 2024 and 2023, we had contracts with multiple contract research organizations (“CRO”) to complete studies as part of research grant agreements. These costs include upfront, milestone and monthly expenses as well as reimbursement for pass through costs. All research and development costs are expensed as incurred except when we are accounting for nonrefundable advance payments for goods or services to be used in future research and development activities. In these cases, these payments are capitalized at the time of payment and expensed in the period the research and development activity is performed. As actual costs become known, we will adjust the accrual; such changes in estimate may be a material change in our clinical study accrual, which could also materially affect reported results of operations. For the three months ended March 31, 2024 and 2023, there were no material adjustments to our prior period estimates of accrued expenses for clinical trials.

Current wording

During the three and six months ended June 30, 2024 and 2023, we had contracts with multiple contract research organizations (“CRO”) to complete studies as part of research grant agreements. These costs include upfront, milestone and monthly expenses as well as reimbursement for pass through costs. All research and development costs are expensed as incurred except when we are accounting for nonrefundable advance payments for goods or services to be used in future research and development activities. In these cases, these payments are capitalized at the time of payment and expensed in the period the research and development activity is performed. As actual costs become known, we will adjust the accrual; such changes in estimate may be a material change in our clinical study accrual, which could also materially affect reported results of operations. For the three and six months ended June 30, 2024 and 2023, there were no material adjustments to our prior period estimates of accrued expenses for clinical trials.

Previous wording

Our revenue is primarily generated through grants from government and other (non-government) organizations.

Current wording

Our revenue is generated through grants from government and other (non-government) organizations.

Previous wording

See Note 11, Stock Option Plan, in our condensed consolidated financial statements for information concerning certain specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted for the three months ended March 31, 2024 and 2023.

Current wording

See Note 11, Stock Option Plans, in our condensed consolidated financial statements for information concerning certain specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted for the three and six months ended June 30, 2024 and 2023.

Previous wording

Assets and liabilities of the Company's foreign subsidiary are translated at the year-end exchange rate. Operating results of the Company's foreign subsidiary are translated at average exchange rates during the period. Translation adjustments have no effect on net loss and are included in “Accumulated other comprehensive loss, net” in the accompanying Consolidated Balance Sheets.

Current wording

Assets and liabilities of the Company's foreign subsidiary are translated at the year-end exchange rate. Operating results of the Company's foreign subsidiary are translated at average exchange rates during the period. Translation adjustments have no effect on net loss and are included in “Accumulated other comprehensive income (loss), net” in the accompanying Condensed Consolidated Balance Sheets.

Previous wording

The warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and were presented within warrant liabilities on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023. The initial fair value of the warrant liabilities were measured at fair value on the closing date of our business combination, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023.

Current wording

The warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and were presented within warrant liabilities on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. The initial fair value of the warrant liabilities were measured at fair value on the closing date of our business combination, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in the condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023.

Previous wording

The measurement as of March 31, 2024 and December 31, 2023 for the Private Placement Warrant liability was approximately $8 thousand and $6 thousand, respectively, and the change in fair value of the Private Placement Warrant liability was approximately $2 thousand the three months ended March 31, 2024.

Current wording

The measurement as of June 30, 2024 and December 31, 2023 for the Private Placement Warrant liability was approximately $11 thousand and $6 thousand, respectively, and the change in fair value of the Private Placement Warrant liability was approximately $5 thousand for the six months ended June 30, 2024.

Previous wording

The measurement as of March 31, 2024 and the measurement as of December 31, 2023 for the Preferred Warrant liability was approximately $6.1 million and $11.6 million, respectively. The change in fair value of the Preferred Warrant liability was approximately $5.5 million for three months ended March 31, 2024.

Current wording

The measurement as of June 30, 2024 and the measurement as of December 31, 2023 for the Preferred Warrant liability was approximately $3.8 million and $11.6 million, respectively. The change in fair value of the Preferred Warrant liability was approximately $7.8 million for the six months ended June 30, 2024.