SAB Biotherapeutics, Inc.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
SABS$3.03+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0000950170-24-038219
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0000950170-25-046994
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 152 previous paragraphs and 114 current paragraphs.
56 unchanged; 29 reworded; 28 added; 63 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
Company Overview
Current report
We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or hIgG, to address immunology disorders. Our programs are based on mechanisms of action that have achieved proof-of-concept in clinical trials in indications with significant unmet medical needs. We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases, including T1D and other autoimmune disorders. Our internally discovered antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgG and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.
Current report
Our proprietary platform, referred to as holds the potential to generate additional novel therapeutic candidates to expand our pipeline. Our platform utilizes the human immune response to generate the optimal repertoire of hIgG for drug targets of interest. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors. We have optimized genetic engineering in the development of transchromosomic cattle, or Tc Bovine, which produce hIgG. Our engineering of our production platform drives IgG1 production across our pipeline. In addition, this differentiated approach using polyclonal antibodies has no biosimilar pathway which provides a significant barrier to competitive polyclonal approaches.
Current report
On January 28, 2025 we announced positive topline phase 1 clinical results with the Company’s potentially disease-modifying T1D therapy SAB-142. Based on the data, we plan to advance SAB-142 into a Phase 2b trial in 2025 to evaluate the therapeutic candidate in adult and pediatric patients with new-onset T1D.
Current report
The SAB-142 Phase 1 trial was designed as a randomized, double-blind, placebo-controlled, single-ascending dose, adaptive design clinical study among healthy volunteers and one cohort of participants with T1D. The objectives include establishing the safety, tolerability, pharmacokinetic, immunogenicity and pharmacodynamic profile for SAB-142. SAB-142 demonstrated a favorable safety profile with no reported serum sickness or anti-drug antibodies (ADA) across Phase 1 doses (0.03mg/kg to 2.5mg/kg), supporting chronic ambulatory dosing, while exhibiting sustained immunomodulation and a multi-target mechanism of action analogous to rabbit ATG, with correlations to C-peptide preservation.
Current report
Corporate Strategy
Current report
We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases with significant unmet medical needs, including immune and autoimmune disorders including T1D. Our business strategy is focused on SAB-142 as a first-in-class, human, multi-target antibody treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D.
Current report
Our proprietary platform, represents the first technology of its kind to produce large-scale human high-titer and high-avidity antibodies across multiple modalities.
Current report
Leveraging our proprietary production system will help us advance a robust pipeline of differentiated hIgG-based therapies for the treatment of immune system disorders and infectious diseases. Our hIgG have been safely demonstrated up through Phase 3 clinical trials with a patient safety database that includes over 700 patients who were safely administered our hIgG therapeutics.
Current report
We have a demonstrated regulatory pathway through each of the FDA, CBER, MHRA, and TGA. These organizations understand our science and are familiar with the multivalent and multitarget properties of our single vial drug products. This further streamlines our ability to develop new and novel drug products rapidly and efficiently where single target mAbs cannot replicate or duplicate our drug product attributes.
Current report
We had two grants from The National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”). The first grant, directly from NIH-NIAID, totaled approximately $1.5 million, and the second grant through Geneva Foundation, totaling approximately $2.7 million. Both of these grants were completed as of June 30, 2023. No grant income was recognized for these grants for the year ended December 31, 2024 and for the year ended December 31, 2023, we recognized approximately $0.4 million in total grant income, $0.2 million from each grant, respectively. The Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) Rapid Response Contract (the “JPEO Rapid Response Contract”), initially awarded for up to $25 million and later expanded to $203.6 million, was terminated in 2022 (the “JPEO Rapid Response Contract Termination”). A final settlement was reached with the US Department of Defense (the “DoD”) in January 2023. Approximately $1.3 million and $1.8 million in deferred grant income was recognized for the JPEO Rapid Response Contract for the years ended December 31, 2024 and December 31, 2023, respectively.
Current report
See Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements for further information about our established revenue recognition process and Note 4, Revenue, to our consolidated financial statements for further information about revenue recognized from government grants for the years ended December 31, 2024 and 2023.
Current report
Nonoperating Income (Expense)
Current report
Other income (expense)
Current report
General and administrative expenses decreased by $9.8 million, or 41.3%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year decrease of $1.5 million, 25.3%); non-capitalized financing costs (year-over-year decrease of $7.5 million, 100.0%); salaries and benefits (year-over-year decrease of $0.2 million, 2.6%); insurance costs (year-over-year decrease of $0.5 million, 31.7%); and forgiveness of a trade payable of $0.7 million; offset by project consulting (year-over-year increase of $0.6 million, 131.5%).
Current report
While administrative support and non-capitalized financing costs declined substantially in the year ended December 31, 2024, we anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.
Current report
Interest expense for the year ended December 31, 2024 remained consistent with interest expense for the year ended December 31, 2023, primarily due to the stability of our finance lease portfolio year-over-year.
Current report
Future interest income will be largely dependent on our total liquid cash and investment balances, which are in turn influenced by our capital resources and future fundraising activities.
Current report
We repaid the Principal of $542 thousand and total accrued interest of $87 thousand during the year ended December 31, 2024.
Current report
For the year ended December 31, 2023, we entered into a similar agreement with First Insurance Funding. This agreement also assigned First Insurance Funding a first priority lien on the security interest in the financed policies and associated rights.
Current report
During the year ended December 31, 2024, we also made payments on a prior insurance financing agreement, which had an original principal balance of $765 thousand with an annual interest rate of 7.96%. This prior agreement was fully repaid, with the final installment made on September 22, 2024.
Current report
Net cash used by investing activities increased by $11.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increased purchases of short-term investments following the completion of the Company’s 2023 PIPE. Capital expenditures were minimal in 2024, as major asset purchases in prior years were primarily related to leasehold improvements at our Corporate Headquarters. We do not anticipate a significant increase in capital asset purchases in the near term, as our investment focus remains on advancing our lead therapeutic candidate through Phase 2 clinical trials.
Current report
Net cash provided by (used in) financing activities decreased by $67.9 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to the absence of any material equity financing activities in 2024.
Current report
Warrants
Current report
Equity Classified Warrants
Current report
We determined the Ladenburg Warrants, PIPE Warrants, PIPE Placement Agent Warrants, and Preferred PIPE Placement Agent Warrants met all necessary criteria to be accounted for as equity in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. As such, they are presented within additional paid-in capital within our consolidated statements of changes in stockholders’ equity and consolidated balance sheets.
Current report
Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.
Current report
The Jumpstart Our Business Startups (“JOBS”) Act, enacted in April 2012, permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have and intend to continue to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards, for an emerging growth company under Section 107 of the JOBS Act.
Removed paragraphs (63)
Previous report
Overview
Previous report
We are a clinical-stage, biopharmaceutical company focused on the development of powerful and proprietary immunotherapeutic polyclonal human antibodies to treat and prevent infectious diseases and immune and autoimmune disorders, including infectious diseases resulting from outbreaks and pandemics as well as immunology, gastroenterology, and respiratory diseases that have significant mortality and health impacts on immunocompromised patients. We have applied advanced genetic engineering and antibody science to develop transchromosomic (Tc) Bovine™. Our novel immunotherapy platform that is developing fully-human hIgC for delaying the onset or progression of T1D.
Previous report
We are advancing clinical programs in two indications, and preclinical development in three indications. In addition, we are executing on two research collaborations with global pharmaceutical companies, including CSL Behring and an undisclosed collaboration.
Previous report
We formed SAB Australia, in order to qualify for the Australian government’s research and development tax credit for research and development dollars spend in Australia. The primary purpose of SAB Australia is to conduct clinical trials for SAB-142. We started phase 1 trials in the fourth quarter of 2023.
Previous report
We generated total revenue of $2.2 million and $23.9 million for the years ended December 31, 2023 and 2022, respectively (90.6% decline). Our revenue to date has been primarily derived from government grants.
Previous report
We plan to focus a substantial portion of our resources on continued research and development efforts towards deepening our technology and expertise with our platform and as well as indications in infectious disease and autoimmune indications. As a result, we expect to continue to make significant investments in these areas for the foreseeable future. We incurred research and development expenses of $16.5 million and $36.4 million for the years ended December 31, 2023 and 2022, respectively, and general and administrative expenses of $23.8 million and $16.4 million for the years ended December 31, 2023 and 2022, respectively. We expect to continue to incur significant expenses, and we expect such expenses to increase substantially in connection with our ongoing activities, including as we:
Previous report
invest in research and development activities to optimize and expand our immunotherapy platform;
Previous report
develop new and advance preclinical and clinical progress of pipeline programs;
Previous report
market to and secure partners to commercialize our products;
Previous report
expand and enhance operations to deliver products, including investments in manufacturing;
Previous report
acquire businesses or technologies to support the growth of our business;
Previous report
continue to establish, protect and defend our intellectual property and patent portfolio;
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operate as a public company.
Previous report
To date, we have primarily financed our operations from government agreements and the issuance and sale of common stock and preferred stock.
Previous report
Our net loss for the year ended December 31, 2023, was $42.2 million and our net loss for the year ended December 31, 2022 was $18.7 million. As of December 31, 2023, we had an accumulated deficit of $90.1 million, and cash and cash equivalents totaling $56.6 million.
Previous report
Effective January 5, 2024, we filed articles of amendment to our articles of incorporation to affect a one-for-ten reverse split of our issued and outstanding shares of Common Stock. All references to common stock, warrants and options to purchase common stock, including per share data and related information contained in the accompanying Consolidated Financial Statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.
Previous report
For the years ended December 31, 2023 and 2022, we received the following grants:
Previous report
National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”) (Federal Award #1R44AI117976-01A1) – this grant was for $1.4 million and started in September 2019 through August 2021. This grant was subsequently amended to extend the end date to August 2022. No grant income was recognized for the year ended December 31, 2023. For the year ended December 31, 2022 there was approximately $182 thousand in grant income recognized from this grant. This grant was completed in 2022.
Previous report
NIH-NIAID (Federal Award #1R41AI131823-02) – this grant was for approximately $1.5 million and started in April 2019 through March 2021. The grant was subsequently amended to extend the date through March 2023. For the years ended December 31, 2023 and 2022, approximately $192 thousand and $328 thousand, respectively, in grant income was recognized from this grant. This grant was completed as of June 30, 2023.
Previous report
NIH-NIAID through Geneva Foundation (Federal Award #1R01AI132313-01, Subaward #S-10511-01) – this grant was for approximately $2.7 million and started in August 2017 through July 2021. The grant was subsequently amended to extend the end date to July 2023. For the years ended December 31, 2023 and 2022, there was approximately $273 thousand and $1.1 million, respectively, in grant income recognized from this grant. This grant was completed as of June 30, 2023.
Previous report
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. For the years ended December 31, 2023 and 2022, there was approximately $1.8 million and $22.2 million, respectively, in grant income recognized from this grant. This grant was terminated in 2022.
Previous report
The grants for 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%).
Previous report
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 to the DoD on September 9, 2022; we submitted a final invoice on December 15, 2022;
Previous report
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 tasks provided in the agreement. At this time, other than certain deferred obligations (presented within deferred grant income within our consolidated 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 Policies for further information about our established revenue recognition process.
Previous report
Research and Development Expenses
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Nonoperating (Expense) Income
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Other income
Previous report
General and administrative expenses increased by $7.4 million, or 45.3%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year increase of $7.7 million, 131.5%), and salaries and benefits (year-over-year increase of $2.2 million, 35.5%), offset by insurance costs (year-over-year decrease of $1.4 million, 51.5%), project consulting (year-over-year decrease of $1.2 million, 73.6%). 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.
Previous report
Interest expense increased for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to the 8% Unsecured Convertible Note accrued interest payable realized over a full year.
Previous report
Equity Financings and Option Exercises
Previous report
As of December 31, 2023, we have raised approximately $157.4 million since our inception from the issuance and sale of convertible preferred shares, net of issuance costs associated with such financings, the merger transaction in 2021, proceeds from private placements of securities, and exercises of employee stock options.
Previous report
Net cash used by investing activities decreased by $1.9 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to a decrease in purchases of equipment. Capital asset purchases completed in 2022 relate substantially to leasehold improvements at the Company’s corporate headquarters and completion of the clinical manufacturing facility at the Research Center.
Previous report
Net cash provided by financing activities increased by $65.7 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to increased proceeds from equity issuances of $59.7 million, a reduction in stock repurchases of $5.5 million, and reduced net payments on notes payable of $0.8 million.
Previous report
Research and development expenses
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Revenue Recognition
Previous report
See Note 11, Stock Option Plan, in our 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 for the years ended December 31, 2023 and 2022.
Previous report
Warrant Liabilities Valuations
Previous report
We are required to periodically estimate the fair value liability of our private placement warrants issued simultaneously with the closing of our initial public offering (the “Private Placement Warrant”) liabilities with the assistance of an independent third-party valuation firm. The assumptions underlying these valuations represented our best estimates, which involved inherent uncertainties and the application of significant levels of our judgment. The fair value liability of our public warrants issued upon the closing of our initial public offering (the “Public Warrants”) is determined by reference to the quoted market price.
Previous report
Public Warrants and Private Placement Warrants
Previous report
The measurement as of December 31, 2023 and 2022 for the Private Placement Warrant liability was approximately $6 thousand and $10 thousand, respectively, and the change in fair value of the Private Placement Warrant liability was approximately $4 thousand and $417 thousand, for the years ended December 31, 2023 and 2022, respectively.
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Reworded paragraphs (29)
Previous wording
We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business. These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A of this Form 10-K.
Current wording
We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business. These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A of this Annual Report.
Previous wording
The total revenue for government grants was approximately $2.2 million and $23.9 million, respectively, for the years ended December 31, 2023 and 2022.
Current wording
Total revenue recognized from government grants was approximately $1.3 million and $2.2 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Research and development activities consist of discovery research for our platform development and the various indications we are working on. We have not historically tracked our research and development expenses on a product candidate-by-product candidate basis.
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 contract research organization (“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 years ended December 31, 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.
Previous wording
Major components within our research and development expenses are salaries and benefits (laboratory & farm), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expense. Our platform allows us to work on multiple projects with the same resources, as the research and development process of each product is very similar (with minimal differences in the manufacturing process).
Current wording
Major components within our research and development expenses are salaries and benefits (laboratory & animal care), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expenses.
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 anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations. We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue.
Previous wording
Other income primarily consists of income associated with the refundable portion of Australian research and development tax credits.
Current wording
Other income primarily consists of income associated with the refundable portion of the Australian research and development tax credit and dividend income from non-interest bearing short-term investments.
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Interest income consists of interest earned on cash balances in our bank accounts.
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Interest income consists of interest earned on our investments in debt securities, cash, and cash equivalents.
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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.
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Revenue decreased by $21.7 million, or 90.6%, in 2023, primarily due to the JPEO Rapid Response Contract Termination. Included in revenues for the year ended December 31, 2023, are amounts for billable costs related to closeout activities and charges of $0.1 million for labor, $0.8 million for supplies, and $1.3 million for outside research manufacturing services, as compared to $3.1 million for labor, $5.4 million for supplies, and $5.3 million for outside research manufacturing services for the year ended December 31, 2022.
Current wording
Revenue decreased by $0.9 million, or 40.9%, in 2024, primarily due to the JPEO Rapid Response Contract Termination. Included in revenues for the year ended December 31, 2024, are amounts for billable costs related to closeout activities and charges of $1.3 million for supplies, as compared to $0.1 million for labor, $0.8 million for supplies, and $1.4 million for outside research manufacturing services for the year ended December 31, 2023. We expect to recognize no further revenue on the JPEO Rapid Response Contract Termination and do not anticipate pursuing additional funded research opportunities outside of our primary focus area in T1D.
Previous wording
Research and development expenses decreased by $19.9 million, or 54.7%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to decreases in laboratory supplies (year-over-year decrease of $5.4 million, 84.4%), contract manufacturing costs (year-over-year decrease of $4.9 million, 92.6%), salaries and benefits (year-over-year decrease of $5.4 million, 45.0%), outside lab services due to the JPEO Rapid Response Contract Termination (year-over-year decrease of $3.6 million, 78.3%), project consulting (year-over-year decrease of $0.4 million, 53.9%) and offset by overhead costs (year-over-year increase of $0.1 million, 1.7%).
Current wording
Research and development expenses increased by $13.7 million, or 83.2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increases in outside lab services (year-over-year increase of $4.7 million, 479.4%), laboratory supplies (year-over-year increase of $0.4 million, 39.9%), an out-of-period adjustment of $0.9 million, salaries and benefits (year-over-year increase of $3.5 million, 53.4%), project consulting (year-over-year increase of $1.1 million, 288.6%), overhead costs (year-over-year increase of $0.5 million, 9.0%), clinical trial costs (year-over-year increase of $3.4 million, 415.0%), offset by contract manufacturing costs (year-over-year decrease of $0.4 million, 100.0%) and animal care (year-over-year decrease of $0.4 million, 43.2%). We expect Research and Development expenses to increase in future years as we advance our lead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to support potential commercialization.
Previous wording
Total non-operating income decreased by $14.8 million, or 142.1% for the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily due to changes in the fair value of the warrant liabilities (year-over-year decrease of $15.2 million, 146.4%), primarily offset by the Australian research and development tax credit of $0.3 million.
Current wording
Total non-operating income increased by $12.2 million, or (278.61)% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily driven by changes in the fair value of the warrant liabilities (year-over-year increase of $10.2 million, 211.6%); a $1.6 million increase in the Australian research and development tax credit; and a $0.4 million increase in income from non-interest-bearing short-term investments, primarily consisting of dividend income and realized gains and losses.
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Interest income increased by $514 thousand, or 723.1% for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to higher interest rates and interest earning cash balances.
Current wording
Interest income increased by $701 thousand, or 119.84% for the year ended December 31, 2024 as compared to the year ended December 31, 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 December 31, 2023 and December 31, 2022, we had $56.6 million and $15.0 million, respectively, of cash and cash equivalents.
Current wording
As of December 31, 2024 and December 31, 2023, we had $20.8 million and $56.6 million, respectively, of cash, 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. These conditions raise substantial doubt about our ability to continue as a going concern. 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
Pursuant to the Fourth Amendment to our lease with Sanford Health, we agreed to a period of abated rent (“Abated Rent”) from October 1, 2022 to September 30, 2023 pertaining to our leased laboratory bay at the Research Center. In exchange for the Abated Rent, effective as of October 1, 2022, we issued to Sanford Health an 8% unsecured, convertible promissory note (the “8% Unsecured Convertible Note”).
Current wording
Pursuant to the fourth amendment to our lease with Sanford Health, we agreed to a period of abated rent (the “Abated Rent”) from October 1, 2022 to September 30, 2023. In exchange for the Abated Rent, effective as of October 1, 2022, we issued to Sanford Health an 8% unsecured, convertible promissory note (the “8% Unsecured Convertible Note”).
Previous wording
Pursuant to the 8% Unsecured Convertible Note, we shall pay the sum of approximately $542 thousand plus accrued and unpaid interest thereon on September 30, 2024. Simple interest shall accrue on the outstanding Principal from and after the date of the 8% Unsecured Convertible Note and shall be payable on September 31, 2024 (the “Maturity Date”). Sanford Health shall have the right, but not the obligation, to convert all or any part of the outstanding Principal of the 8% Unsecured Convertible Note, together with any accrued and unpaid interest thereon to the date of such conversion, into such number of fully paid and non-assessable shares of our common stock, at any time and from time to time, prior to the later of the Maturity Date and the date on which the 8% Unsecured Convertible Note is paid in full, subject to certain restrictions, at a conversion price per share of common stock equal to greater of (x) $15.00 and (y) the price at which the we sells shares of common stock in any bona fide private or public equity financing prior to the Maturity Date.
Current wording
Pursuant to the 8% Unsecured Convertible Note, we shall pay the sum of approximately $542 thousand (the “Principal”) plus accrued and unpaid interest thereon on September 30, 2024 (the “Maturity Date”). Simple interest shall accrue on the outstanding Principal from and after the date of the 8% Unsecured Convertible Note and shall be payable on the Maturity Date.
Previous wording
We obtained financing for certain Director & Officer liability insurance policy premiums. The agreement assigns First Insurance Funding (the “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.
Current wording
We obtained financing for certain Director & Officer liability insurance policy premiums. For the year ended December 31, 2024, the agreement assigns AFCO Direct as the 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.
Previous wording
The total premiums, taxes and fees financed is approximately $0.8 million with an annual interest rate of 7.96% and approximately $1.2 million with an annual interest rate 5.47% for the years ended December 31, 2023 and 2022, respectively. 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 financing through installment payments with the last payment for the current note being September 22, 2023. At December 31, 2023 and 2022 we recognized approximately $509 thousand and $773 thousand, respectively as an insurance financing note payable in our consolidated financial statements. We will pay the insurance financing through installment payments with the last payment for the current note being on September 22, 2024.
Current wording
The total premiums, taxes, and fees financed under the current insurance financing agreement are approximately $516 thousand, for AFCO Direct with an annual interest rate of 7.37%. In consideration of the premium payment by the AFCO Direct to the insurance companies or the Agent or Broker (as defined in the agreement with the lender), we unconditionally promise to pay the lender the amount financed plus interest and other charges permitted under the agreement. At December 31, 2024, and 2023, we recognized approximately $276 thousand and $509 thousand, respectively, as an insurance financing note payable in our consolidated balance sheets. We incurred $17 thousand and $22 thousand of interest expense related to the insurance financing note for the years ended December 31, 2024, and 2023, respectively. Our current insurance financing agreement is being repaid through installment payments, with the final payment scheduled for September 22, 2025.
Previous wording
Net cash used by operating activities increased by $1.7 million in the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to an increase in our net loss adjusted for non-cash items of $4.2 million, offset by a decrease in cash used in operating activities related to change in our operating assets and liabilities of $2.5 million. Year-over-year changes in cash used by operating activities is explained by shifts in the working capital balances as we continue to advance our lead programs after the JPEO Rapid Response Contract Termination.
Current wording
Net cash used by operating activities increased by $9.2 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to an increase in our net loss adjusted for non-cash items of $4.5 million, compounded by an increase in cash used in operating activities related to change in our operating assets and liabilities of $4.6 million. Year-over-year changes in cash used for operating activities were primarily driven by working capital needs to support the advancement of our Phase 1 trial.
Previous wording
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.
Current wording
We enter into contracts in the normal course of business with third parties, including contract research organizations (“CRO”). These payments are not included in the table above, as the amount and timing of such payments are not known.
Previous wording
We had $40.8 million of federal net operating loss carryforwards as of December 31, 2023. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
Current wording
We had $59.9 million of federal net operating loss carryforwards as of December 31, 2024. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
Previous wording
Costs incurred in connection with research and development activities are expensed as incurred. These include licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that perform certain research and testing on behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.
Current wording
Expenses incurred in connection with research and development activities are expensed as incurred. These include licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that perform certain research and testing on behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.
Previous wording
We had contracts with multiple CROs 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 to us, we adjust our accrual; such changes in estimate may be a material change in our clinical study accrual, which could also materially affect our results of operations.
Current wording
We had contracts with multiple CROs 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 result in a material change in our clinical study accrual, which could also materially affect reported results of operations.
Previous wording
We recognize compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. The board of directors elected to determine the fair value of our common stock based on the closing market price at closing on the date of grant. In determining the fair value of our stock-based awards, we utilize the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value. The Black-Scholes option-pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. For awards with performance-based vesting criteria, we estimate the probability of achievement of the performance criteria and recognize compensation expense related to those awards expected to vest. We recognized stock-based compensation expense over the expected term. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in our consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the expected term.
Current wording
In determining the fair value of stock-based awards, we utilize the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value. The Black-Scholes option-pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. For awards with performance-based vesting criteria, we estimate the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. No awards may have a term in excess of ten years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in the consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the vesting period.
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 consolidated balance sheets as of December 31, 2023 and 2022. The initial fair value of the warrant liabilities were measured at fair value on the issuance date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in the consolidated statements of operations for the years ended December 31, 2023 and 2022.
Current wording
We account for our Public Warrants, Private Placement Warrants, and Preferred Warrants as liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The initial fair value of the warrant liabilities was measured at fair value at the Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in our consolidated statements of operations.
Previous wording
The fair value of the Private Placement Warrants was determined utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (“MCS”) analysis. Specifically, we considered a MCS to derive the implied volatility in the publicly listed price of the Public Warrants We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants. We determined the fair value of the Public Warrants by reference to the quoted market price.
Current wording
On the Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis. Specifically, we considered an MCS to derive the implied volatility in the publicly-listed price of the Public Warrants. We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants. We determined the fair value of the Public Warrants by reference to the quoted market price. See Note 12, Warrants, for the key inputs and further details for our warrants classified as liabilities.
Previous wording
The Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and the Private Placement Warrants held privately by assignees of Big Cypress Holdings LLC, were classified as a Level 3 fair value measurement, due to the use of unobservable inputs. See Note 12, Warrants, for further information regarding the Public Warrants and Private Placement Warrants.
Current wording
Our Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and our Private Placement Warrants held privately by assignees of Big Cypress Holdings LLC, were classified as a Level 3 fair value measurement, due to the use of unobservable inputs. See Note 13, Fair Value Measurements, for changes in fair value of the Private Placement Warrants.
Previous wording
The initial fair value of each Preferred Placement Agent Warrant issued and exercisable at $6.30 has been determined using the Black-Scholes option-pricing model.
Current wording
The initial fair value of each Ladenburg Warrant, PIPE Warrant and PIPE Placement Agent Warrant issued was determined using the Black-Scholes option-pricing model. See Note 12, Warrants for further details on our warrants classified as equity.
Previous wording
We have elected to take advantage of certain of the reduced disclosure obligations in this Form 10-K and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than the information you receive from other public companies in which you hold stock.
Current wording
We have elected to take advantage of certain of the reduced disclosure obligations in this Annual Report and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than the information you receive from other public companies in which you hold stock.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
FASB ASC Topic 718, Compensation– Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. We recognize compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. We determine the fair value of common stock based on the closing market price at closing on the date of the grant.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
For the years ended December 31, 2023 and 2022, we had contracts with multiple CROs to conduct and complete clinical studies. In the case of SAB-185, the CRO has been contracted and paid by the US government. For SAB-176, PPD Development, LP, acting as CRO oversaw the Phase 1 safety study. The terms of that agreement are subject to confidentiality, and the status of the agreement is that it is current, in good standing and 100% of the contract has been paid as of December 31, 2023. SAB has also contracted with hVIVO Services Limited to conduct the Phase 2a influenza study on SAB-176. The terms of that agreement are subject to confidentiality, and the status of the agreement is that it is current, in good standing and 100% of the contract has been paid as of December 31, 2023. For SAB-142, Avance, acting as CRO oversaw 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.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Our revenue is primarily generated through grants from government and other (non-government) organizations.
Previous report — wording carried elsewhere
Grant revenue is recognized for the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grants are met. We concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit Entities, and that the grants are not within the scope of ASC 606, Revenue from Contracts with Customers, as the organizations providing the grants do not meet the definition of a customer. Expenses for grants are tracked by using a project code specific to the grant, and the employees also track hours worked by using the project code.