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As filed with the U.S. Securities and Exchange Commission on December 3, 2021.

 

Registration No. 333-       

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

 

 

SAB Biotherapeutics, Inc.
(Exact name of registrant as specified in its charter)

 

Delaware   2836   85-3899721
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

 

2100 East 54th Street North
Sioux Falls, South Dakota 57104
Telephone: 605-679-6980
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

 

Eddie J. Sullivan, PhD
President and Chief Executive Officer
SAB Biotherapeutics, Inc.
2100 East 54th Street North
Sioux Falls, South Dakota 57104
Telephone: 605-679-6980
(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Copies to:

Brian Lee, Esq.

Ilan Katz, Esq.

Dentons US LLP

1221 Avenue of the Americas

New York, NY 10020

(212) 768-6700

(212) 768-6800 — Facsimile

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non- accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to Be Registered 

Amount to be

Registered(1)

   Proposed Maximum Aggregate Offering
Price Per
Security
  

Proposed Maximum

Aggregate Offering
Price

   Amount of Registration Fee 
Common Stock, 0.0001 par value per share   5,958,600(2)  $11.50(3)  $68,523,900   $6,352.17 
Common Stock, 0.0001 par value per share   14,434,301(4)  $10.02(5)  $144,631,696   $13,407.36 
Total   20,392,901        $213,155,596   $19,759.53 

 

 

 

(1) In the event of a stock split, stock dividend or other similar transaction involving the registrant’s common stock (“Common Stock”), in order to prevent dilution, the number of shares of Common Stock registered hereby shall be automatically increased to cover the additional shares of Common Stock in accordance with Rule 416(a) under the Securities Act.
(2) Consists of (i) 208,600 shares of Common Stock issuable upon the exercise of 208,600 outstanding warrants issued to Big Cypress Holdings LLC (the “Sponsor”) in a private placement concurrently with the registrant’s initial public offering (the “Private Warrants”) and (ii) 5,750,000 shares of Common Stock issuable upon the exercise of 5,750,000 outstanding warrants issued in connection with the registrant’s initial public offering (the “Public Warrants,” and, together with the Private Warrants, the “Warrants”).
(3) Based upon the $11.50 exercise price per share of Common Stock issuable upon exercise of the Warrants.
(4) Consists of the following shares of Common Stock registered for resale by the selling securityholders pursuant to that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated October 23, 2021, between us and certain selling securityholders granting such holders registration rights with respect to such shares: (i) 247,525 shares issued to Chardan Capital Markets LLC (“Chardan”) and certain of its employees and designees in a private placement (ii) 3,047,825 shares of Common Stock held by the Sponsor a private placement in connection with the initial public offering of Big Cypress Acquisition Corp., (iv) up to 208,600 shares of Common Stock issuable upon exercise of the Private Warrants, (v) 10,685,978 shares of Common Stock issued to Christine Hamilton, Director of SAB Biotherapeutics, Inc., and (vi) 244,373 shares issued to Ladenburg Thalmann & Co. Inc. (“Ladenburg”) and certain of its employees.
(5) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act. The price per share and aggregate offering price are based on the average of the high and low prices of the Common Stock on November 26, 2021, as reported on the Nasdaq Global Market.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, Dated December 3, 2021

 

PRELIMINARY PROSPECTUS

 

 

Up to 14,434,301 Shares of Common Stock

Up to 5,958,600 Shares of Common Stock Issuable Upon Exercise of Warrants

This prospectus relates to the issuance by us of an aggregate of up to 5,958,600 shares of our common stock, $0.0001 par value per share (the “Common Stock”), which consists of (i) the issuance of up to 208,600 shares of Common Stock upon exercise of 208,600 warrants issued in a private placement to Big Cypress Holdings LLC (the “Sponsor”), in connection with the initial public offering of Big Cypress Acquisition Corp. (the “Private Placement Warrants”), and (ii) the issuance of up to 5,750,000 shares of Common Stock issuable upon exercise of 5,750,000 warrants issued in the initial public offering of Big Cypress Acquisition Corp. (the “Public Warrants,” and, together with the Private Placement Warrants, the “Warrants”). We will receive the proceeds from the exercise of any Warrants for cash.

 

This prospectus also relates to the offer and sale from time to time of up to 14,434,301 shares of Common Stock by the selling securityholders named in this prospectus or their permitted transferees (the “selling securityholders”), which consists of (i) 3,047,825 shares issued in a private placement to the Sponsor pursuant to the Securities Subscription Agreement, dated November 12, 2020, (ii) 10,685,978 shares issued to Christine Hamilton, Director of SAB Biotherapeutics, Inc. (the “Company”), (iii) 244,373 shares issued to Ladenburg Thalmann & Co. Inc. (“Ladenburg”) and certain of its employees, and (iv) 247,525 shares issued to Chardan Capital Markets LLC (“Chardan”) and certain of its employees and designees. We will not receive any proceeds from the sale of shares by the selling securityholders pursuant to this prospectus. We are registering the securities held by the selling securityholders for resale pursuant to that certain amended and restated registration rights agreement dated October 23, 2021 between us and the selling securityholders.

 

Our registration of the securities covered by this prospectus does not mean that the selling securityholders will offer or sell any of the shares of Common Stock. The selling securityholders may offer, sell or distribute all or a portion of the securities hereby registered publicly or through private transactions at prevailing market prices or at negotiated prices. We will not receive any of the proceeds from such sales of the shares of Common Stock, except with respect to amounts received by us upon exercise of the Warrants. We will bear all costs, expenses and fees in connection with the registration of these securities, including with regard to compliance with state securities or “blue sky” laws. The selling securityholders will bear all commissions and discounts, if any, attributable to their sale of shares of Common Stock. See the section titled “Plan of Distribution.

 

The Common Stock and Public Warrants are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “SABS” and “SABSW”, respectively. On December 2, 2021, the last reported sales price of Common Stock was $10.32 per share and the last reported sales price of our Public Warrants was $11.50 per warrant.

 

We are an “emerging growth company” as defined under U.S. federal securities laws and, as such, have elected to comply with reduced public company reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company. We are incorporated in Delaware.

 

 

 

Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described in the section titled “Risk Factors” beginning on page 6 of this prospectus, and under similar headings in any amendments or supplements to this prospectus.

 

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 

 

 

Prospectus dated                   , 2021

 

 

 

 

TABLE OF CONTENTS

 

  Page
   
PROSPECTUS SUMMARY 1
MARKET AND INDUSTRY DATA 22
USE OF PROCEEDS 23
DETERMINATION OF OFFERING PRICE 24
MARKET INFORMATION FOR SECURITIES AND DIVIDEND POLICY 25
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION 26
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 34
BUSINESS 50
MANAGEMENT 68
EXECUTIVE COMPENSATION 75
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 84
PRINCIPAL SECURITYHOLDERS 87
SELLING SECURITYHOLDERS 89
RESALE S-1 SELLING SECURITYHOLDER TABLE 89
DESCRIPTION OF OUR SECURITIES 90
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES 96
PLAN OF DISTRIBUTION 101
LEGAL MATTERS 103
EXPERTS 104
CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT 105
WHERE YOU CAN FIND MORE INFORMATION 106

 

 

 

You should rely only on the information contained in this prospectus, any supplement to this prospectus or in any free writing prospectus, filed with the Securities and Exchange Commission. Neither we nor the selling securityholders have authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the Securities and Exchange Commission. We and the selling securityholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The selling securityholders are offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.

 

For investors outside of the United States: Neither we nor the selling securityholders, have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securities and the distribution of this prospectus outside the United States.

 

To the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information contained in any document incorporated by reference filed with the Securities and Exchange Commission before the date of this prospectus, on the other hand, you should rely on the information in this prospectus. If any statement in a document incorporated by reference is inconsistent with a statement in another document incorporated by reference having a later date, the statement in the document having the later date modifies or supersedes the earlier statement.

 

i
 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement on Form S-1 that we filed with the Securities and Exchange Commission (the “SEC”) using the “shelf” registration process. Under this shelf registration process, the selling securityholders may, from time to time, sell the securities offered by them described in this prospectus. We will not receive any proceeds from the sale by such selling securityholders of the securities offered by them described in this prospectus. This prospectus also relates to the issuance by us of the shares of Common Stock issuable upon the exercise of any Warrants. We will not receive any proceeds from the sale of shares of Common Stock issuable upon exercise of the Warrants pursuant to this prospectus, except with respect to amounts received by us upon the exercise of the Warrants for cash.

 

Neither we nor the selling securityholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the selling securityholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the selling securityholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

 

We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the sections of this prospectus titled “Where You Can Find More Information.

 

On October 22, 2021 (the “Closing Date”), Big Cypress Acquisition Corp., a Delaware corporation and our predecessor company (“BCYP”), consummated the previously announced business combination (the “Business Combination”), pursuant to the terms of the agreement and plan of merger, dated as of June 21, 2021 and as amended on August 12, 2021 by the first amendment to the agreement and plan of merger (as may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among BCYP, Big Cypress Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of BCYP (“Merger Sub”), and SAB Biotherapeutics, Inc., a Delaware corporation (“OLD SAB”).

 

Pursuant to the Business Combination Agreement, on the Closing Date, (i) Merger Sub merged with and into OLD SAB (the “Merger”), with OLD SAB as the surviving company in the Merger, and, after giving effect to such Merger, OLD SAB was renamed SAB Sciences, Inc. and became a wholly-owned subsidiary of BCYP and (ii) BCYP changed its name to “SAB Biotherapeutics, Inc.” (“NEW SAB” or the “Company” or “SAB” or “SAB Biotherapeutics” f/k/a Big Cypress Acquisition Corp).

 

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”), (i) each share of common stock and preferred stock of OLD SAB outstanding as of immediately prior to the Effective Time was exchanged for shares of our Common Stock based on the agreed upon OLD SAB equity value of $300 million (the “Equity Value”) and a conversion rate of $10.10; (ii) each outstanding vested and unvested option to purchase shares of OLD SAB common stock was exchanged for a comparable option to purchase our Common Stock, based on the Equity Value and a conversion rate of $10.10; and (iii) holders of vested options to purchase shares of OLD SAB common stock received, in the aggregate, 1,507,124 restricted stock units (the “Earnout RSUs”) related to shares of our Common Stock. Additionally, holders of OLD SAB common stock and preferred stock are entitled to receive their pro rata share of the shares of our Common Stock that were issued into escrow at the Closing (the “Earnout Shares”) which will be released if certain conditions are met within the five-year period following the Closing (the “Earnout Period”). The total number of Earnout Shares and shares underlying the Earnout RSUs equaled 12,000,000 shares of Common Stock, in the aggregate.

 

No fraction of a share of Common Stock was issued at the Closing, and each person who was otherwise entitled to a fraction of a share of Common Stock (after aggregating all fractional shares of Common Stock that otherwise would be received by such holder) received the number of shares of Common Stock rounded in the aggregate to the nearest whole share of Common Stock.

 

Unless the context otherwise requires, “NEW SAB,” “SAB,” “SAB Biotherapeutics,” “we,” “us,” “our,” and the “Company” refer to SAB Biotherapeutics, Inc. (f/k/a Big Cypress Acquisition Corp.), a Delaware corporation and its consolidated subsidiaries. All references to “BCYP” refer to the predecessor company prior to the consummation of the Business Combination. All references to “OLD SAB” refer to SAB Biotherapeutics, Inc., a Delaware corporation acquired by Merger Sub to effect the Business Combination and the Merger. All references herein to the “Board” refer to the board of directors of the Company (the “Board”). All references herein to the “Closing” refer to the closing of the transactions contemplated by the Business Combination Agreement, including the Merger and the Business Combination (collectively, the “Transactions”).

 

ii
 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Some of the statements contained in this prospectus constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. These forward-looking statements include statements about future financial and operating results of the Company; benefits of the Business Combination; statements about the plans, strategies and objectives of management for future operations of the Company; statements regarding future performance; and other statements regarding the Business Combination. In some cases, you can identify these forward-looking statements by the use of terminology such as “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intends,” “may,” “might,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and the negative version of these words or other comparable words or phrases, but the absence of these words does not mean that a statement is not forward-looking.

 

These forward-looking statements are based on information available as of the date of this prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements in this prospectus and in any document incorporated herein by reference should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

  the ability to maintain the Company’s listing of Common Stock on Nasdaq;
     
  the anticipated benefits of the Business Combination;
     
  costs associated with the Business Combination;
     
  general economic conditions and their impact on demand for the Company’s platform;
     
  seasonal sales fluctuations;
     
  the outcome of any known and unknown litigation and regulatory proceedings;
     
  the Company is a clinical-stage biopharmaceutical company and has incurred significant losses since its inception. Although the Company realized net income in the fiscal year ended December 31, 2020, it may incur losses for the foreseeable future and may not be able to generate sufficient revenue to maintain profitability;
     
  the Company’s limited operating history makes future forecasting difficult;
     
   the Company’s product candidates are in preclinical or early-stage clinical development;
     
  the future commercial success of the Company’s product candidates will depend on the degree of market acceptance of the Company’s potential products among physicians, patients, healthcare payers, and the medical community;
     
  failure to successfully identify, develop and commercialize additional products or product candidates could impair the Company’s ability to grow;
     
  the Company depends upon its senior management and senior scientific staff, and their loss or unavailability could put the Company at a competitive disadvantage;
     
  the Company is subject to manufacturing risks that could substantially increase the costs and limit supply of product candidates or prevent the Company from achieving a commercially viable production process;
     
  outbreaks of livestock diseases and other events affecting the health of the Company’s bovine herd can adversely impact the Company’s ability to conduct its operations and production of its product candidates; and
     
  the Company is subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations.

 

The foregoing list may not contain all of the forward-looking statements made in this registration statement.

 

In addition, statements that “SAB believes” or “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Except to the extent required by applicable law, we are under no obligation (and expressly disclaim any such obligation) to update or revise their forward-looking statements whether as a result of new information, future events, or otherwise. For a further discussion of these and other factors that could cause our future results, performance or transactions to differ significantly from those expressed in any forward-looking statement, please see the section titled “Risk Factors.” You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements).

 

iii
 

 

FREQUENTLY USED TERMS

 

“Amendment No. 1 to Business Combination Agreement” means the amendment to the Business Combination Agreement dated as of August 12, 2021 by and among BCYP, Merger Sub, SAB Biotherapeutics.

 

“Board” means the Board of Directors of the Company.

 

“Business Combination” means the transactions contemplated by the Business Combination Agreement.

 

“Business Combination Agreement” means the Business Combination Agreement, dated as of June 21, 2021 and as amended by Amendment No. 1 to Business Combination Agreement, as may be amended, by and among BCYP, Merger Sub and SAB Biotherapeutics.

 

“BCYP” refers to Big Cypress Acquisition Corp., a Delaware corporation, prior to the completion of the Business Combination on October 22, 2021.

 

“BCYP Board” means the board of directors of BCYP.

 

“BCYP Common Stock” means BCYP’s Common Stock, par value $0.0001 per share.

 

“BCYP IPO” or “IPO” means BCYP’s initial public offering of units, consummated on January 14, 2021.

 

“BCYP Public Stockholders” means the former holders of shares of BCYP Common Stock.

 

“Closing” means the consummation of the Business Combination.

 

“Closing Date” means the date upon which the Closing occurred.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“DGCL” means the Delaware General Corporation Law.

 

“Equity Value” means the equity value of OLD SAB, which was agreed upon to be $300 million.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Effective Time” means the time at which the Merger became effective.

 

“Founder Shares” means the 2,875,000 shares of BCYP Common Stock issued to the Initial Stockholders prior to the BCYP IPO.

 

“GAAP” means United States generally accepted accounting principles.

 

“Initial Stockholders” means the Sponsor, Ladenburg Thalmann & Co. Inc. and certain of its employees, who collectively hold all of the Founder Shares.

 

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

 

“Merger” means the merging of Merger Sub with and into OLD SAB, with OLD SAB surviving the Merger as a wholly owned subsidiary of BCYP.

 

“Merger Sub” means Big Cypress Merger Sub Inc., a Delaware corporation.

 

“Nasdaq” means The Nasdaq Stock Market.

 

“Nasdaq Global Market” means the Global Market tier of The Nasdaq Stock Market.

 

“NEW SAB” or the “Company” refers to BCYP after completion of the Business Combination on October 22, 2021.

 

“OLD SAB” means the entity formerly known as SAB Biotherapeutics, Inc. a Delaware corporation, which was renamed SAB Sciences, Inc.

 

“PCAOB” means the Public Company Accounting Oversight Board.

 

“Private Placement Warrants” means the warrants included in the private placement of BCYP’s units, each such whole warrant is exercisable for one share of Common Stock, in accordance with its terms.

 

“Public Warrants” means the warrants included in the units sold in BCYP’s IPO, each of which is exercisable for one share of Common Stock, in accordance with its terms.

 

“OLD SAB Board” means the board of directors of OLD SAB.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Sponsor” means Big Cypress Holdings, LLC, a Delaware limited liability company.

 

“Warrants” means the Private Placement Warrants and the Public Warrants.

 

iv
 

 

 

PROSPECTUS SUMMARY

 

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes thereto and the information set forth in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

Overview

 

We are a clinical-stage biopharmaceutical company advancing a new class of immunotherapies based on its human polyclonal and monoclonal antibodies. Polyclonal antibody (pAb) response is a natural mode of immune response exhibited by the adaptive immune system of mammals that ensures that a single antigen or disease particle is recognized and attacked through its overlapping parts, called epitopes, by multiple antibody molecule species. A monoclonal antibody (mAb) is an antibody made by cloning a single, unique white blood cell that binds to a single epitope on an antigen. An antigen is a molecule or molecular structure on the outside of pathogen that triggers an immune response and that can be bound by an antigen-specific antibody. An epitope is the part of an antigen (disease component) that is recognized by the immune system, specifically by antibodies (immunoglobulins).

 

We have applied advanced genetic engineering and antibody science to develop transchromosomic (Tc) Bovine™ herds that produce fully human antibodies targeted to specific diseases, including infectious diseases such as COVID-19 and influenza, immune system disorders including type 1 diabetes and organ transplantation, and cancer. The term “fully human antibodies”, as used within this document, means that the entire protein sequence of both the heavy chain and the light chain of the antibodies are the human antibody sequences as transcribed and translated by the human antibody genes contained on the human artificial chromosome. The immunoglobulin heavy chain (IgH) is the large polypeptide subunit of an antibody (immunoglobulin), the human DNA coding sequence of which is located on human chromosome 14. The immunoglobulin kappa light chain (Igκ) is the small polypeptide subunit of an antibody (immunoglobulin), the human DNA coding sequence of which is located on human chromosome 2.

 

Our versatile and scalable DiversitAb™ platform is applicable to a wide range of human diseases, capable of producing specifically targeted, high-potency immunotherapies. The platform has been expanded and validated through funding awarded from U.S. government emerging disease and medical countermeasures programs, the most recent of which totals up to approximately $203.6 million, to support development of new investigational products for research use only, build human resources and manufacturing capacity, and advance clinical studies. 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 a confidential collaboration.

 

We have focused our efforts on developing its product and platform value chain. Since our founding in 2014, we have generated revenue from government awards and commercial agreements that have provided proof-of-concept and consistency of outcomes across more than a dozen development programs. In addition, we have generated substantial results from government, academic and commercial collaborators, including testing, process development and optimization, nonclinical and clinical studies for multiple, distinct product candidates in infectious disease, oncology and immune disorders.

 

The mailing address of our principal executive offices are located at 2100 East 54th Street North, Sioux Falls, SD 57104, and our telephone number is (605) 679-6800.

 

Background

 

BCYP was a blank check special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

 

1

 

 

 

The registration statement for the BCYP IPO was declared effective by the SEC on January 11, 2021 and on January 14, 2021, BCYP consummated the BCYP IPO, which consisted of the initial public offering of 11,500,000 units, which included the full exercise by the underwriters of the over-allotment option to purchase an additional 1,500,000 units, at $10.00 per unit, generating gross proceeds of $115,000,000. Each unit consisted of one share of common stock, and one-half redeemable warrant to purchase one share of common stock at a price of $11.50 per whole share. Simultaneously with the closing of the BCYP IPO, BCYP consummated the sale of 417,200 Private Placement Units, at a price of $10.00 per unit, in a private placement to our Sponsor, generating gross proceeds of $4,172,000.

 

Following the BCYP IPO and the sale of the Private Placement Warrants, a total of $116,150,000 was placed in the Trust Account. In accordance with BCYP’s then-current Amended and Restated Certificate of Incorporation, the amounts held in the Trust Account could only be used by BCYP upon the consummation of a business combination, other than any interest earned on the funds in the Trust Account, to be released by BCYP from time to time, to pay its tax obligations.

 

BCYP, Merger Sub and OLD SAB consummated the Business Combination on the Closing Date pursuant to the Business Combination Agreement.

 

Pursuant to the Business Combination Agreement, on the Closing Date, (i) the parties to the Business Combination Agreement consummated the Merger, and, after giving effect to such Merger, OLD SAB was renamed SAB Sciences, Inc. and became a wholly-owned subsidiary of BCYP and (ii) BCYP changed its name to “SAB Biotherapeutics, Inc.” (f/k/a Big Cypress Acquisition Corp).

 

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share of common stock and preferred stock of OLD SAB outstanding as of immediately prior to the Effective Time was exchanged for shares of Common Stock based on the Equity Value and a conversion rate of $10.10; (ii) each outstanding vested and unvested option to purchase shares of OLD SAB common stock was exchanged for a comparable option to purchase Common Stock, based on the Equity Value and a conversion rate of $10.10; and (iii) holders of vested options to purchase shares of OLD SAB common stock received, in the aggregate, 1,507,124 restricted stock units (the “Earnout RSUs”) related to shares of Common Stock. Additionally, holders of OLD SAB common stock and preferred stock are entitled to receive their pro rata share of the shares of Common Stock that were issued into escrow at the Closing (the “Earnout Shares”) which will be released if certain conditions are met within the five-year period following the Closing (the “Earnout Period”). The total number of Earnout Shares and shares underlying the Earnout RSUs equaled 12,000,000 shares of Common Stock, in the aggregate.

 

No fraction of a share of Common Stock was issued at the Closing, and each person who was otherwise entitled to a fraction of a share of Common Stock (after aggregating all fractional shares of Common Stock that otherwise would be received by such holder) received the number of shares of Common Stock rounded in the aggregate to the nearest whole share of Common Stock.

 

The following terms shall have the respective meanings ascribed to them below:

 

“Earnout Escrow Account” means the escrow account pursuant to the Earnout Escrow Agreement to hold the Earnout Shares until they are released to the former holders of OLD SAB Common Stock and Preferred Stock or returned to the Company to be held as treasury shares.

 

“Earnout Escrow Agreement” means the Escrow Agreement entered into Closing, by and among BCYP, Shareholder Representative Services LLC, as the stockholder representative, and Continental Stock Transfer and Trust Company.

 

“Earnout Period” means the five-year period following the Closing.

 

“Earnout RSUs” means the restricted stock units issued to holders of vested options to purchase shares of OLD SAB common stock as contemplated in the Business Combination Agreement. Each Earnout RSU will be settled in shares of Common Stock issued to holders of vested options to purchase OLD SAB common stock subject to certain condition as contemplated in the Business Combination Agreement.

 

 

2

 

 

 

“Earnout Shares” means the shares of Common Stock issued into escrow at the Closing pursuant to the Business Combination Agreement and the Escrow Agreement, which will be returned to the Company and become treasury shares, in whole or in part, if certain conditions are not met within the Earnout Period.

 

“Trust Account” means the trust account that held a portion of the proceeds of the BCYP IPO and the concurrent sale of the Private Placement Units.

 

Implications of Being an Emerging Growth Company

 

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended, and therefore we intend to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in this prospectus, our periodic reports and our proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of our Common Stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2026.

 

Summary of Risk Factors

 

Below is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found under the section titled “Risk Factors” in this prospectus. The below summary is qualified in its entirety by that more complete discussion of such risks and uncertainties. You should consider carefully the risks and uncertainties described under the section titled “Risk Factors” as part of your evaluation of an investment in our securities:

 

 

Risks related to the Company’s business and operations, including that:

 

  we are a clinical-stage biopharmaceutical company and has incurred significant losses since its inception. Although OLD SAB realized net income in the fiscal year ended December 31, 2020, we may incur losses for the foreseeable future and may not be able to generate sufficient revenue to maintain profitability;
     
  we have limited operating history makes future forecasting difficult;
     
  our product candidates are in preclinical or early-stage clinical development;
     
  the future commercial success of our product candidates will depend on the degree of market acceptance of our potential products among physicians, patients, healthcare payers, and the medical community;
     
  we have received awards from the U.S. Government in multiple projects over the course of operations, some of which include Government Purpose Rights, Government Limited Rights, and rights of publication;
     
  failure to successfully identify, develop and commercialize additional products or product candidates could impair our ability to grow;
     
  we depend upon senior management and senior scientific staff, and their loss or unavailability could put us at a competitive disadvantage;
     
  we are subject to manufacturing risks that could substantially increase the costs and limit supply of product candidates or prevent us from achieving a commercially viable production process;

 

 

3

 

 

 

  outbreaks of livestock diseases and other events affecting the health of our bovine herd can adversely impact our ability to conduct our operations and production of our product candidates; and
     
  we are subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations.

 

Risks related to the Company’s intellectual property and related laws and regulations, including that:

 

  security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and reputation;
     
  our success may depend on our ability to maintain the proprietary nature of our technology;
     
  we may become involved in litigation to protect or enforce our patents or the patents of our collaborators or licensors, which could be expensive and time-consuming; and
     
  if patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries.

 

Risks related to being a public company, including that:

 

    we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment; and
       
    we might not be able to comply with the continued listing standards of Nasdaq.

 

Risks related to ownership of our securities, including that:

 

  insiders have substantial influence over the Company, which could limit your ability to affect the outcome of key transactions, including a change of control;
     
  we may issue additional shares Common Stock (including upon the exercise of warrants or conversion of preferred stock) which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders;
     
  we may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless;
     
     
  our actual financial position and results of operations may differ materially from the unaudited pro forma financial information included in this registration statement;
     
  we will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, financial condition, and results of operations; and
     
  we are an “emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our common stock less attractive to investors.

 

Corporate Information

 

Our principal executive offices are located at 2100 East 54th Street North Sioux Falls, South Dakota 57104, and our telephone number is (605)-679-6980. Our corporate website address is www.sabbiotherapeutics.com. Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

 

We and our subsidiaries own or have rights to trademarks, trade names and service marks that they use in connection with the operation of their business. In addition, their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this prospectus are listed without the applicable ®, ™ and SM symbols, but they will assert, to the fullest extent under applicable law, their rights to these trademarks, trade names and service marks.

 

 

4

 

 

 

The Offering

 

Shares of Common Stock offered by the Company  

We are registering the issuance by us of 5,958,600 shares of Common Stock, which consists of (i) the issuance of up to 208,600 shares of Common Stock upon exercise of 208,600 warrants issued in a private placement to Big Cypress Holdings LLC (the “Sponsor”), in connection with the initial public offering of Big Cypress Acquisition Corp. (the “Private Placement Warrants”), and (ii) the issuance of up to 5,750,000 shares of Common Stock upon the exercise of 5,750,000 warrants issued in the initial public offering of Big Cypress Acquisition Corp. (the “Public Warrants,” and, together with the Private Placement Warrants, the “Warrants”).

 

The exercise price of the Warrants is $11.50 per share.

 

We will receive the proceeds from the exercise of any Warrants for cash.

 

We will receive up to an aggregate of approximately $68.5 million from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. See the section titled “Use of Proceeds.”

 

Shares of Common Stock offered by the selling securityholders   We are registering the resale by the selling securityholders named in this prospectus, or their permitted transferees, and aggregate of 20,392,901 shares of Common Stock, consisting of:

 

  up to 3,047,825 shares held by the Sponsor;
     
  up to 10,685,978 shares held by a member of the Board;
     
  up to 244,373 shares held by Ladenburg and certain of its employees;
     
  up to 247,525 shares held by Chardan and certain of its employees and designees; and
     
  up to 5,958,600 shares of Common Stock issuable upon the exercise of the Warrants.

 

   

We will not receive any proceeds from the sale of shares by the selling securityholders pursuant to this prospectus.

 

Redemption   The Public Warrants are redeemable in certain circumstances. See the section titled “Description of Our Securities — Warrants.
     
Lock-up agreements   Certain of our securityholders are subject to certain restrictions on transfer until the termination of applicable lock-up periods. See the section titled “Certain Relationships and Related Party Transactions - Lock-Up Agreements.
     
Terms of the offering   The selling securityholders will determine when and how they will dispose of the securities registered for resale under this prospectus.
     
Use of proceeds   We will not receive any proceeds from the sale of shares Common Stock by the selling securityholders.
     
Risk factors   Before investing in our securities, you should carefully read and consider the information set forth in “Risk Factors” beginning on page 6.
     
Nasdaq ticker symbols   “SABS” and “SABSW”

 

For additional information concerning the offering, see “Plan of Distribution” beginning on page 101.

 

 

5

 

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “Special Note Regarding Forward-Looking Statements,” you should carefully consider the risks and uncertainties described below together with all of the other information contained in this prospectus, including our financial statements and related notes included at the end of this prospectus and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our securities. If any of the events or developments described below were to occur, our business, prospects, operating results and financial condition could suffer materially, the trading price of our securities could decline and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

 

References to “we,” “us” and “our” refers to SAB Biotherapeutics, Inc.

 

Risks Related to Our Business and Operations

 

We are a clinical-stage biopharmaceutical company and have incurred significant losses since its inception. Although we realized net income in the fiscal year ended December 31, 2020, we may incur losses for the foreseeable future and may not be able to generate sufficient revenue to maintain profitability.

 

We are a clinical-stage biopharmaceutical company. We expect to experience variability in revenue and expenses which makes it difficult to evaluate our business and prospects. As such, we have and anticipate that we will continue to incur significant operating losses in the foreseeable future. Our historical losses resulted principally from costs incurred in research and development, preclinical testing, clinical development of product candidates as well as costs incurred for research programs and from general and administrative costs associated with these operations. In the future, we intend to continue to conduct research and development, preclinical testing, clinical trials and regulatory compliance activities that, together with anticipated general and administrative expenses, will result in incurring further significant losses for the next several years. We expect that our operating expenses will continue to increase significantly, including as we:

 

  continue the research and development of our clinical- and preclinical-stage product candidates and discovery stage programs, including the clinical trials of SAB-185 and SAB-176;
     
  invests in our technology and platform;
     
  seek regulatory approvals for any product candidates that successfully complete clinical trials;
     
  market and sell our solutions to existing and new partners;
     
  attract, hire, and retain qualified personnel;
     
  maintain, expand, enforce, protect, and defend our intellectual property portfolio;
     
  create additional infrastructure to support operations;
     
  add operational, financial, and management information systems and personnel to support operations as a public company; and
     
  experience any delays or encounter issues with any of the above.

 

Our expenses could increase beyond expectations for a variety of reasons, including as a result of our growth strategy and the increase in the scope and complexity of our operations. In executing our strategy and plans to invest in enhancing and scaling our business, we will need to generate significant additional revenue to achieve and maintain future profitability. We may not be able to generate sufficient revenue to achieve profitability and our recent and historical growth should not be considered indicative of future performance.

 

6

 

 

SAB Biotherapeutics’ limited operating history makes future forecasting difficult.

 

We commenced operations in April 2014. As a result of our limited operating history, it is difficult to accurately forecast revenues or to predict operating expenses. Our current and future expense estimates are based, in large part, on our estimates of future revenue and on our research, development and commercialization plans. In particular, we plan to increase operating expenses significantly in order to expand our research, development and sales and marketing operations. To the extent that these expenses precede increased revenue, our business, results of operations and financial condition would be materially adversely affected. We may be unable to, or may elect not to, adjust spending quickly enough to offset any unexpected revenue shortfall. Therefore, any significant shortfall in revenue in relation to our expectations would also have a material adverse effect on our business, results of operations and financial condition.

 

SAB Biotherapeutics is in early development efforts and its product candidates are in clinical and preclinical development.

 

We currently do not have any products that have gained regulatory approval. Our ability to generate product revenues, which we does not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates. As a result, our business is substantially dependent on the ability to successfully complete the development of and obtain regulatory approval for our product candidates.

 

We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields. If we are unsuccessful in accomplishing the numerous and complex objectives in developing our product candidates, we may not be able to successfully develop and commercialize our product candidates, and our business will suffer.

 

If SAB Biotherapeutics encounters difficulties enrolling patients in clinical trials, clinical trials of SAB Biotherapeutics’ product candidates may be delayed or otherwise adversely affected.

 

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until conclusion. We may experience difficulties in patient enrollment in clinical trials for a variety of reasons, including:

 

  the size and nature of the patient population;
     
  the design of the trial, including the patient eligibility criteria defined in the protocol;
     
  the size of the study population required for analysis of the trial’s primary endpoints;
     
  the proximity of patients to trial sites;
     
  our ability to recruit clinical trial investigators with the appropriate competencies and experience;
     
  competing clinical trials for similar therapies or other new therapeutics;
     
  clinicians’ and patients’ perceptions as to the potential advantages and side effects of the drug candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating;
     
  our ability to obtain and maintain patient consents;
     
  the risk that patients enrolled in clinical trials will not complete a clinical trial; and
     
  the availability of approved therapies that are similar in mechanism to our product candidates.

 

7

 

 

Our failure to timely complete clinical trials would delay the approval and commercialization of our product candidates, impair the commercial performance of our product candidates, and consequently harm our business and results of operations.

 

SAB Biotherapeutics’ preclinical studies and clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of its product candidates, or serious adverse or unacceptable side effects may be identified during the development of its product candidates, which could prevent, delay or limit the scope of regulatory approval of SAB Biotherapeutics’ product candidates, limit their commercialization, increase costs or necessitate the abandonment or limitation of the development of some of SAB Biotherapeutics’ product candidates.

 

To obtain the requisite regulatory approvals for the commercial sale of our product candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that such product candidates are safe, pure and potent for use in each target indication. These trials are expensive and time consuming, and their outcomes are inherently uncertain. Failures can occur at any time during the development process. Preclinical studies and clinical trials often fail to demonstrate safety or efficacy of the product candidate studied for the target indication, and most product candidates that begin clinical trials are never approved.

 

We may fail to demonstrate with substantial evidence from adequate and well-controlled trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that our product candidates are safe and potent for their intended uses.

 

The future commercial success of SAB Biotherapeutics’ product candidates will depend on the degree of market acceptance of SAB Biotherapeutics’ potential products among physicians, patients, healthcare payers, and the medical community.

 

When available on the market, our products may not achieve an adequate level of acceptance by physicians, patients and the medical community, which may result in us failing to achieve profitability. In addition, efforts to educate the medical community and third-party payers on the benefits of our products may require significant resources and may never be successful, which would prevent us from generating significant revenues or becoming profitable.

 

Failure to successfully identify, develop and commercialize additional products or product candidates could impair SAB Biotherapeutics’ ability to grow.

 

Although a substantial amount of our efforts will focus on the continued preclinical and clinical testing and potential approval of product candidates in our current pipeline, a key element of long-term growth strategy is to develop and market additional products and product candidates. Because we have limited financial and managerial resources, research programs to identify product candidates will require substantial additional technical, financial and human resources, whether or not any product candidates are ultimately identified. The success of this strategy depends partly upon our ability to identify, select and develop promising product candidates and products. Our technology platforms may fail to discover and to generate additional product candidates that are suitable for further development. All product candidates are prone to risks of failure typical of pharmaceutical product development, including the possibility that a product candidate may not be suitable for clinical development as a result of its harmful side effects, limited efficacy or other characteristics that indicate that it is unlikely to be a product that will receive approval by the FDA and other comparable foreign regulatory authorities and achieve market acceptance. If we do not successfully develop and commercialize product candidates based upon its technological approach, we may not be able to obtain product or collaboration revenues in future periods, which would adversely affect our business, prospects, financial condition and results of operations.

 

Our long-term growth strategy to develop and market additional products and product candidates is heavily dependent on precise, accurate and reliable scientific data to identify, select and develop promising pharmaceutical product candidates and products. Our business decisions may therefore be adversely influenced by improper or fraudulent scientific data sourced from third parties. Any irregularities in the scientific data used by us to determine our focus in research and development of product candidates and products could have a material adverse effect on our business, prospects, financial condition and results of operations.

 

8

 

 

SAB Biotherapeutics needs to attract and retain highly skilled personnel; strategic partners and SAB Biotherapeutics may be unable to effectively manage its growth with its limited resources.

 

We have limited human resources and its future success will depend in part on our ability to attract, train, retain and motivate highly skilled executive level management, research and development, and sales personnel and to establish and maintain effective strategic alliances with key companies in our industry. Competition is intense for many of these types of personnel from other companies, consulting firms and more established organizations, many of which have significantly larger operations and greater financial, marketing, human, and other resources. We may not be successful in attracting and retaining qualified personnel on a timely basis, on competitive terms or at all. If we are not successful in attracting and retaining these personnel, our business, prospects, financial condition and results of operations may be materially adversely affected.

 

SAB Biotherapeutics anticipates adding new employees and SAB Biotherapeutics will have to integrate such new employees into its operations.

 

Our officers and directors may not possess all of the skills or experience necessary to successfully implement our business plan. Further, we anticipate hiring new employees. Failure to fully integrate new employees into our operations could have a material adverse effect on our business, prospects, financial condition and results of operations.

 

SAB Biotherapeutics depends upon its senior management and senior scientific staff, and their loss or unavailability could put SAB Biotherapeutics at a competitive disadvantage.

 

Our success depends largely on the skills, experience and reputation of certain key management and personnel, in particular our directors, executive officers and senior scientific staff. The loss or unavailability of any of these individuals for any significant period of time could have a material adverse effect on our business, prospects, financial condition and results of operations.

 

SAB Biotherapeutics is limited in its ability to manufacture pharmaceutical products.

 

To be successful, our products and the products of our partners must be manufactured in commercial quantities in compliance with regulatory requirements and at a commercially acceptable cost. We have not commercialized any pharmaceutical products, nor have we demonstrated an ability to manufacture commercial quantities of our or our partners’ product candidates in accordance with regulatory requirements. If we are unable to produce suitable quantities of our or our partners’ products, or contract third parties to do so, in accordance with regulatory standards at a commercially acceptable cost, our ability or the ability of our partners to conduct clinical trials, obtain regulatory approvals and market such products may be adversely affected, which could adversely affect our competitive position and our chances of achieving profitability. There can be no assurance that such products can be manufactured by us or any other party at a cost or in quantities which are commercially viable.

 

SAB Biotherapeutics is subject to manufacturing risks that could substantially increase the costs and limit supply of product candidates or prevent SAB Biotherapeutics from achieving a commercially viable production process.

 

The process of manufacturing our product candidates is complex, highly regulated and subject to several risks, including:

 

  we do not have experience in manufacturing our product candidates at commercial scale.
     
  we plan to develop a larger scale manufacturing process for our product candidates.
     
  we may not succeed in scaling up the process.
     
  we may need a larger scale manufacturing process for certain product candidates than what has been planned.

 

 

9

 

 

Any changes in our manufacturing processes as a result of scaling up may result in the need to obtain additional regulatory approvals. Difficulties in achieving commercial-scale production or the need for additional regulatory approvals as a result of scaling up could delay the development and regulatory approval of our product candidates and ultimately affect our success. We may not achieve the manufacturing productivity (“yield”) required to achieve a commercially viable cost of goods. Low productivities may result in a cost of goods which are too high to allow profitable commercialization, or give rise to the need for additional manufacturing process optimization which would require additional funding and time.

 

Additionally, the process of manufacturing biologics, such as our product candidates, is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

 

The manufacturing facilities in which SAB Biotherapeutics’ product candidates are made could be adversely affected by equipment failures, labor shortages, natural disasters, power failures and numerous other factors.

 

We presently manufactures our product candidates at our lab facilities in South Dakota. If our lab facilities were to be damaged or destroyed by fire, flood, other natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations.

 

We must comply with applicable current Good Manufacturing Practice, or cGMP, regulations and guidelines. We may encounter difficulties in achieving quality control and quality assurance and may experience shortages in qualified personnel. We are subject to inspections by regulatory authorities to confirm compliance with applicable regulatory requirements. Any failure to follow cGMP or other regulatory requirements or delay, interruption or other issues that arise in the manufacture, fill-finish, packaging, or storage of our product candidates as a result of a failure of our facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop and commercialize our product candidates, leading to significant delays in the availability of therapeutic product for clinical studies or the termination or hold on a clinical study, or the delay or prevention of a filing or approval of marketing applications for our product candidates. Significant noncompliance could also result in the imposition of sanctions, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approvals for our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could damage our reputation. If we are not able to achieve and maintain regulatory compliance, we may not be permitted to market its product candidates and/or may be subject to product recalls, seizures, injunctions, or criminal prosecution.

 

Any adverse developments affecting manufacturing operations for our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of product candidates. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives.

 

Our product candidates that have been produced and are stored for later use may degrade, become contaminated or suffer other quality defects, which may cause the affected product candidates to no longer be suitable for their intended use in clinical studies or other development activities. If the defective product candidates cannot be replaced in a timely fashion, we may incur significant delays in our development programs that could adversely affect the value of such product candidates.

 

10

 

 

Outbreaks of livestock diseases and other events affecting the health of SAB Biotherapeutics’ bovine herd can adversely impact SAB Biotherapeutics’ ability to conduct its operations and production of its product candidates.

 

Our product candidates are based on materials produced by genetically engineered bovines. We maintain a herd of approximately 200 genetically engineered production animals at a single location in South Dakota and a larger herd of recipient animals at other locations. Our ability to produce product candidates is dependent on the continued health and productivity of its animals. The supply of our product candidates can be adversely impacted by outbreaks of livestock diseases, which can have a significant adverse impact on our financial condition. Our animals produced by the recipient herd do not typically become productive until 15-18 months from the start of gestation. If all or a material number of the productive herd were to become diseased, injured or die as a result of bacterial, fungal or viral infections, such as foot and mouth disease, or natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations.

 

Extreme factors or forces beyond SAB Biotherapeutics’ control could negatively impact the business.

 

Natural disasters, fire, bioterrorism or other acts of terrorism or vandalism, animal activist activity or adverse public perception or media coverage or other public relations issues pandemic or extreme weather, including droughts, floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages, feed shortages, decrease in availability of water, damage to our production and manufacturing facilities or disruption of transportation channels which would delay the development, regulatory approval and manufacture of our product candidates and ultimately affect our success. Any of these factors could have an adverse effect on our financial condition and ability to operate.

 

Security breaches, loss of data and other disruptions could compromise sensitive information related to SAB Biotherapeutics’ business or prevent it from accessing critical information and expose SAB Biotherapeutics to liability, which could adversely affect its business and its reputation.

 

In the ordinary course of business, we generate and store sensitive data, including research data, intellectual property and proprietary business information owned or controlled by us or our employees, partners and other parties. We utilize external security and infrastructure vendors to manage parts of our network. These applications and data encompass a wide variety of business-critical information, including research and development information, commercial information and business and financial information. We face a number of risks relative to protecting this critical information, including loss of access risk, inappropriate use or disclosure, accidental exposure, unauthorized access, inappropriate modification and the risk of being unable to adequately monitor and audit and modify controls over critical information. This risk extends to the third party vendors and subcontractors we use to manage this sensitive data or otherwise process it on our behalf. The secure processing, storage, maintenance and transmission of this critical information is vital to our operations and business strategy, and we devote significant resources to protecting such information. Although we take reasonable measures to protect sensitive data from unauthorized access, use or disclosure, no security measures can be perfect and our information technology and infrastructure may be vulnerable to attacks by hackers or infections by viruses or other malware or breached due to employee erroneous actions or inactions by employees or contractors, malfeasance or other malicious or inadvertent disruptions. Any such breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen. Any such access, breach, or other loss of information could result in legal claims or proceedings. Unauthorized access, loss or dissemination could also disrupt operations and damage our reputation, any of which could adversely affect our business.

 

SAB Biotherapeutics has no sales and marketing experience.

 

We have no experience in sales, marketing or distribution. Before we can market any of our products directly, we must develop a substantial marketing and sales force with technical expertise and supporting distribution capability. Alternatively, we may obtain the assistance of a pharmaceutical company with a large distribution system and a large direct sales force. We do not have any existing distribution arrangements with any pharmaceutical company for its products. There can be no assurance that we will be able to establish sales and distribution capabilities or be successful in gaining market acceptance for our products.

 

11

 

 

SAB Biotherapeuticssuccess depends on its ability to maintain the proprietary nature of our technology.

 

Our success in large part depends on our ability to maintain the proprietary nature of our technology and other trade secrets. To do so, we must prosecute and maintain existing patents, obtain new patents and pursue trade secret and other intellectual property protection. We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights. Patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions. To date, no consistent policy has emerged regarding the breadth of biotechnology patent claims that are granted by the U.S. Patent and Trademark Office (“USPTO”) or enforced by the federal courts. Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage. We also cannot be sure that we will develop additional proprietary products that are patentable. Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us.

 

Third parties may claim we infringe their intellectual property rights.

 

Our research, development and commercialization activities may be found to infringe patents owned by third-parties from whom we do not hold licenses or other rights to use their intellectual properties. There may be rights we are not aware of, including applications that have been filed, but not published that, when issued, could be asserted against us. These third-parties could bring claims against us, and that may cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

 

As a result of potential patent infringement claims, or in order to avoid potential claims, we may choose or be required to seek a license from the third-party. These licenses may not be available on acceptable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be non-exclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms. All of the issues described above could also impact our collaborators, which would also impact the success of the collaboration and therefore us.

 

We may become involved in litigation to protect or enforce our patents or the patents of our collaborators or licensors, which could be expensive and time-consuming.

 

Competitors may infringe our patents or the patents of our collaborators or licensors. As a result, we may be required to file suit to counter infringement for unauthorized use. This can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover its technology. An adverse determination of any litigation or defense proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at the risk of not issuing.

 

Even if we are successful, litigation may result in substantial costs and distraction to our management. Even with a broad portfolio, we may not be able, alone or with our collaborators and licensors, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the U.S.

 

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.

 

12

 

 

If patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries.

 

Important legal issues remain to be resolved as to the extent and scope of available patent protection for biopharmaceutical products and processes in the U.S. and other important markets outside the U.S., such as Europe and Japan. In addition, foreign markets may not provide the same level of patent protection as provided under the U.S. patent system. Litigation or administrative proceedings may be necessary to determine the validity and scope of certain of our and others’ proprietary rights. Any such litigation or proceeding may result in a significant commitment of resources in the future and could force us to do one or more of the following: cease selling or using any of our products that incorporate the challenged intellectual property, which would adversely affect our revenue; obtain a license from the holder of the intellectual property right alleged to have been infringed, which license may not be available on reasonable terms, if at all; and redesign our products to avoid infringing the intellectual property rights of third-parties, which may be time-consuming or impossible to do. In addition, changes in, or different interpretations of, patent laws in the U.S. and other countries may result in patent laws that allow others to use our discoveries or develop and commercialize our products. We cannot provide assurance that the patents we obtain or the unpatented technology we hold will afford us significant commercial protection.

 

SAB Biotherapeutics has third party collaborators that might claim rights in or to SAB’s technology and/or assets.

 

We have extensive experience collaborating with multiple parties in Government and industry, and has agreements and collaborations that allow potential claims and actual rights, such as shared publication rights, shared inventions, access to assets, potential claims of co-inventorship, limited rights to data, general purpose rights to data, and other claims that may affect our business operations, intellectual property portfolio, interruption of operating assets or our ability to protect its own rights. There can be no assurance that our competitors, suppliers, service providers, collaborators or other parties will not succeed in asserting rights that are or become contrary to our interests.

 

SAB Biotherapeutics is party to a contracting agreement with the US federal government which could be subject to revision or termination at the discretion of the US federal government.

 

We are executing on an award agreement (Project Agreement No. 01; MCDC1902-007) with the US federal Government (“USG”) that is structured as a cost reimbursement agreement that includes a defined scope and budget and represents the substantial majority of our revenues. The USG has the right to discontinue the agreement and wind-down or change the scope of the projects within the agreement. In the event the USG stops or alters the scope of the project, such action could have a material impact on our financial performance. Further, the agreement contains general purpose and limited purpose rights of USG, which include the sharing of certain types of information and a right to negotiate reasonable access to physical assets that have been funded by USG.

 

SAB Biotherapeutics operates in a highly competitive industry.

 

We are engaged in highly competitive industries. We compete with many public and private companies, including pharmaceutical companies, chemical companies, specialized biotechnology companies and academic institutions. Many of our competitors have substantially greater financial, scientific and technical resources, and manufacturing and marketing experience and capabilities than us. In addition, many of our competitors have significantly greater experience conducting preclinical studies and clinical trials of new pharmaceutical products, and in obtaining regulatory approvals for pharmaceutical products. Our competitors and competitors of our collaborators may develop and commercialize such products more rapidly than we and our collaborators do. Competition may increase further as a result of potential advances from the study of pharmaceutical products, and greater availability of capital for investment in this field. There can be no assurance that our competitors will not succeed in developing technologies and products that are more effective than any being developed by us or that would render our technology and products obsolete or noncompetitive. There can be no assurance that these and other efforts by potential competitors will not be successful, or that other methods will not be developed to compete with our technology. There are specific products and technologies that compete with current product pipeline and that may outperform or be more competitive than our products. For example, there are multiple animal derived sources for ATG, that may be competitive with SAB-142 for transplant such as ThymoglobulinTM (Sanofi Genzyme) and Atgam TM (Pfizer), SAB-142 for Type I diabetes such as teplizumab (Provention), otelixizumab (Tolerx/GSK); there are industry standard human sources of IgG that may compete with SAB-181 such as Hizentra TM (CSL Behring) and other commercially available human derived IVIG’s; there are other antibody technologies that may compete with SAB Biotherapeutics’ anti-influenza product, SAB-176 such as VIR-2482 (Vir), DAS-181 (Ansun), VIS410 (Visterra), FLU-IGIV (Emergent Biosolutions); there are multiple COVID-19 products that may compete with SAB-185 such as BRII-196/BRII-198 (Brii), AZD-7442 (AstraZeneca), LY-CoV555 (Eli Lilly/Abcellera), BMS-986414/BMS-986413 (BMS/Rockefeller University), VIR-7831 (Vir/GSK), REGEN-CoV (Regeneron), ADG-20 (Adagio), GIGA-2050 (Grifols).

 

13

 

 

SAB Biotherapeutics is subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations.

 

Our business operations and use of real property are subject to stringent federal, state, and local environmental laws and regulations pertaining to safe working conditions, ethical experimental use of animals, the discharge of materials into the environment, and the handling and disposition of wastes (including solid and hazardous wastes) or otherwise relating to protection of the environment. These laws include the Occupational Safety and Health Act, the Toxic Test Substances Control Act and the Resource Conservation and Recovery Act. Compliance with these laws and regulations, and the ability to comply with any modifications to these laws and regulations, is material to our business. New matters or sites may be identified in the future that will require additional investigation, assessment, or expenditures. In addition, some of our facilities have been in operation for some time and, over time, we and any other prior operators of these facilities may have generated and disposed of wastes that now may be considered hazardous. Future discovery of contamination of property underlying or in the vicinity of our present or former properties or manufacturing facilities and/or waste disposal sites could require us to incur additional expenses. In addition, claimants may sue us for injury or contamination that results from our use of or our handling of contaminants, and our liability may exceed our total assets. Compliance with environmental laws and regulations may be expensive, and current or future environmental regulations may impair our research, development or production efforts. The occurrence of any of these events, the implementation of new laws and regulations, or stricter interpretation of existing laws or regulations, could adversely affect SAB Biotherapeutics’ financial condition and ability to operate.

 

Anti-takeover provisions contained in our certificate of incorporation as well as provisions of Delaware law, could impair a takeover attempt.

 

Our certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions will include:

 

  no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
     
  a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors;
     
  the right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board of Directors;
     
  a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and
     
  requirement that a meeting of stockholders may only be called by members of our Board of Directors and the ability of the stockholders of the SAB Biotherapeutics to call a special meeting is specifically denied, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors. These provisions, alone or together, could delay hostile takeovers and changes in control of SAB Biotherapeutics or changes in our Board of Directors and management.

 

14

 

 

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders holding more than 15% of outstanding our common stock from engaging in certain business combinations without approval of the holders of substantially all of our common stock. Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock and could also affect the price that some investors are willing to pay for our common stock.

 

Risks Related to Being a Public Company

 

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, financial condition, and results of operations.

 

As a public company, we are and will continue to be subject to the reporting requirements of the Exchange Act, the listing standards of Nasdaq and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, financial condition, and results of operations, although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.

 

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

 

We also expect that being a public company and these new rules and regulations will make it increasingly expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

 

As a result of disclosure of information in filings required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business, financial condition, and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, financial condition, and results of operations.

 

We are an emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our common stock less attractive to investors.

 

For so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, being required to provide fewer years of audited financial statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

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We may lose our emerging growth company status and become subject to the SEC’s internal control over financial reporting management and auditor attestation requirements. If we are unable to certify the effectiveness of our internal controls, or if our internal controls have a material weakness, we could be subject to regulatory scrutiny and a loss of confidence by stockholders, which could harm our business and adversely affect the market price of our common stock. We will cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) December 31, 2026 (the last day of the fiscal year following the fifth anniversary of becoming a public company).

 

As an emerging growth company, we may choose to take advantage of some but not all of these reduced reporting burdens. Accordingly, the information we provide to our stockholders may be different than the information you receive from other public companies in which you hold stock. In addition, the JOBS Act also provides that an “emerging growth company” can take advantage of an extended transition period for complying with new or revised accounting standards. We have elected to take advantage of this extended transition period under the JOBS Act. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards. It is possible that some investors will find our common stock less attractive as a result, which may result in a less active trading market for our common stock and higher volatility in our stock price.

 

Investors may find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.

 

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

 

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the applicable listing standards of Nasdaq. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.

 

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting, which includes hiring additional accounting and financial personnel to implement such processes and controls. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses in our controls.

 

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K.

 

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Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business and results of operations and could cause a decline in the price of our common stock.

 

Our warrants are accounted for as liabilities and the changes in value of the warrants could have a material effect on our financial results.

 

On April 12, 2021, the staff of the SEC issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Staff Statement”). The SEC Staff Statement focused on certain accounting and reporting considerations related to warrants of a kind similar to warrants that we issued at the time of our initial public offering and the exercises by the underwriters of their over-allotment options in January 2021. In response to the SEC Staff Statement, we reevaluated the accounting treatment of the warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

 

As a result, included on our balance sheet and contained elsewhere in this prospectus derivative liabilities related to embedded features contained within the warrants. Accounting Standards Codification (“ASC”) 815-40 provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of income. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside of its control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the warrants each reporting period and that the amount of such gains or losses could be material.

 

Our business, financial condition, and results of operations may fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors.

 

Our operating results have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which are outside of our control and, as a result, should not be relied upon as an indicator of future performance. As a result, we may not be able to accurately forecast our operating results and growth rate. Any of these events could cause the market price of our common stock to fluctuate. Factors that may contribute to the variability of our operating results include, but are not limited to: our ability to attract new clients and partners, retain existing clients and partners and maximize engagement and enrollment with existing and future clients; changes in our sales and implementation cycles, especially in the case of our large clients; new solution introductions and expansions, or challenges with such introductions; changes in our pricing or fee policies or those of our competitors; the timing and success of new solution introductions by us or our competitors or announcements by competitors or other third parties of significant new products or acquisitions or entrance into certain markets; any other change in the competitive landscape of our industry, including consolidation among our competitors; increases in operating expenses that we may incur to grow and expand our operations and to remain competitive; our ability to successfully expand our business, whether domestically or internationally; breaches of security or privacy; changes in stock-based compensation expenses; the amount and timing of operating costs and capital expenditures related to the expansion of our business; adverse litigation judgments, settlements, or other litigation-related costs; changes in the legislative or regulatory environment, including with respect to privacy or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation; changes in our effective tax rate; our ability to make accurate accounting estimates and appropriately recognize revenue for our solutions for which there are no relevant comparable products; changes in accounting standards, policies, guidance, interpretations, or principles; instability in the financial markets; general economic conditions, both domestic and international; volatility in the global financial markets; political, economic, and social instability, including terrorist activities and health epidemics (including the recent outbreak of COVID-19), and any disruption these events may cause to the global economy; and changes in business or macroeconomic conditions. The impact of one or more of the foregoing or other factors may cause our operating results to vary significantly.

 

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Changes in accounting principles may cause previously unanticipated fluctuations in our financial results, and the implementation of such changes may impact our ability to meet our financial reporting obligations.

 

We prepare our financial statements in accordance with GAAP, which are subject to interpretation or changes by the FASB, the SEC, and other various bodies formed to promulgate and interpret appropriate accounting principles. New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future which may have a significant effect on our financial results. Furthermore, any difficulties in implementation of changes in accounting principles, including the ability to modify our accounting systems, could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.

 

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our business, financial condition, and results of operations could be adversely affected.

 

The preparation of financial statements in conformity with GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes and amounts reported in our key metrics. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to allowance for doubtful accounts, assessment of the useful life and recoverability of long-lived assets, fair value of guarantees included in revenue arrangements and fair values of stock-based awards, warrants, contingent consideration, and income taxes. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.

 

Risks Related to an Investment in Our Securities

 

There may not be an active trading market for our securities, which may make it difficult to sell shares of our common stock or warrants.

 

It is possible that an active trading market for our securities will not develop or, if developed, that any market will not be sustained. This would make it difficult for you to sell our securities at an attractive price or at all.

 

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The market price of our securities may be volatile, which could cause the value of your investment to decline.

 

The price of our securities may fluctuate significantly due general market and economic conditions. An active trading market for our securities may not develop or, if developed, it may not be sustained. In addition, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Even if an active market for our securities develops and continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline. Factors affecting the trading price of our securities may include, but are not solely limited to, the risk factors identified herein.

 

In addition, the stock market in general, and Nasdaq and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of its actual operating performance. In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results or financial condition.

 

The unaudited pro forma financial information included herein may not be indicative of what our actual financial position or results of operations would have been.

 

The unaudited pro forma financial information included herein is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated.

 

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

 

If Nasdaq delists our securities from trading on its exchange for failure to meet their continued listing standards, SAB Biotherapeutics and its stockholders could face significant negative consequences including:

 

  Limited availability of market quotations for SAB Biotherapeutics securities;
     
  A determination that our common stock is a “penny stock” which will require brokers trading in our securities to adhere to more stringent rules;
     
  Possibly resulting in a reduced level of trading activity in the secondary trading market for shares of our common stock;
     
  A limited amount of analyst coverage; and
     
  A decreased ability to issue additional securities or obtain additional financing in the future.

 

Because we have no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

 

We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board of Directors may deem relevant. As a result, you may not receive any return on an investment in our common stock unless you sell the common stock for a price greater than that which you paid for it. See the section entitled “Market Information for Securities and Dividend Policy”.

 

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

 

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock. Sales of significant number of shares of our common stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that it deems reasonable or appropriate, and make it more difficult for you to sell shares of our common stock. Certain holders of our securities are entitled to rights with respect to the registration of the shares of our common stock under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock.

 

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Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

 

We expect that significant additional capital may be needed in the future to continue our planned operations, including conducting clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating as a public company. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner it determines from time to time. We may also sell our common stock as part of entering into strategic alliances, creating joint ventures or collaborations or entering into additional licensing arrangements with third parties that we believe will complement or augment its development and commercialization efforts. If we sell common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock.

 

Our management has limited experience in operating a public company.

 

Our executive officers have limited experience in the management of a publicly traded company subject to significant regulatory oversight and reporting obligations under federal securities laws. Our management team may not successfully or effectively manage our transition to a public company. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to our management and growth. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. It is possible that will be required to expand its employee base and hire additional employees to support our operations as a public company, which will increase its operating costs in future periods.

 

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 

We have the ability to redeem outstanding our publicly held warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we give notice of redemption. If and when the warrants become redeemable, we may exercise the redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force holders to (i) exercise the warrants and pay the exercise price therefor at a time when it may be disadvantageous to do so, (ii) sell the warrants at the then-current market price when the holder might otherwise wish to hold on to such warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of the warrants. None of the warrants held by Big Cypress Holdings LLC will be redeemable by us so long as they are held by Big Cypress Holdings LLC or their permitted transferees.

 

In addition, we may redeem the publicly held warrants after they become exercisable for a number of shares of our common stock determined based on the redemption date and the fair market value of our common stock. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of our common stock had your warrants remained outstanding.

 

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Risk Factors to Capital Markets

 

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.

 

The global credit and financial markets have experienced extreme volatility and disruptions in the past, most recently as a result of the COVID-19 pandemic. These disruptions can result in severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our operations, growth strategy, financial performance and stock price and could require it to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers may not survive an economic downturn, which could directly affect our ability to attain its operating goals on schedule and on budget.

 

If securities or industry analysts do not publish research or reports about our business or publish negative reports, the market price of our common stock could decline.

 

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If regular publication of research reports ceases, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume of our common stock to decline. Moreover, if one or more of the analysts who cover us downgrade our common stock or if reporting results do not meet their expectations, the market price of our securities could decline.

 

We may be subject to securities litigation, which is expensive and could divert management attention.

 

The market price of our securities may be volatile and, in the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm its business.

 

Risks Related to Financing and Tax

 

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

 

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, advance or begin clinical trial and research initiatives, enhance our operating infrastructure, and acquire complementary businesses and technologies. In order to achieve these objectives, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

 

Changes in legislation in U.S. and foreign taxation of international business activities or the adoption of other tax reform policies, as well as the application of such laws, could adversely impact our financial position and operating results.

 

As we expand the scale of our business activities, any changes in the U.S. or foreign taxation of such activities may increase our worldwide effective tax rate and harm our business, results of operations, and financial condition. For example, the Biden administration has proposed changes to federal income tax laws that would, among other things, impose a 15% minimum tax on corporate book income for certain taxpayers and strengthen the global intangible low-taxed income regime imposed by the Tax Cuts and Jobs Act of 2017 while eliminating related tax exemptions. The impact of future changes to U.S. and foreign tax law on our business is uncertain and could be adverse, and we will continue to monitor and assess the impact of any such changes.

 

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MARKET AND INDUSTRY DATA

 

Certain industry data and market data included in this prospectus were obtained from independent third-party surveys, market research, publicly available information, reports of governmental agencies and industry publications and surveys. All of management’s estimates presented herein are based upon management’s review of independent third-party surveys and industry publications prepared by a number of sources and other publicly available information. All of the market data used in this prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We believe that the information from these industry publications and surveys included in this prospectus is reliable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

 

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USE OF PROCEEDS

 

All of the shares of Common Stock offered by the selling securityholders pursuant to this prospectus will be sold by the selling securityholders for their respective accounts. We will not receive any of the proceeds from these sales.

 

We will receive up to an aggregate of approximately $68.5 million from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. We expect to use the net proceeds from the exercise of the Warrants, if any, for general corporate purposes. We will have broad discretion over the use of proceeds from the exercise of the Warrants. There is no assurance that the holders of the Warrants will elect to exercise any or all of such Warrants. To the extent that the Warrants are exercised on a “cashless basis,” the amount of cash we would receive from the exercise of the Warrants will decrease.

 

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DETERMINATION OF OFFERING PRICE

 

The offering price of the shares of Common Stock issuable upon exercise of the Warrants offered hereby is determined by reference to the exercise price of the Warrants of $11.50 per share, subject to adjustment as described herein.

 

We cannot currently determine the price or prices at which shares of Common Stock may be sold by the selling securityholders under this prospectus. Our Common Stock is listed on Nasdaq under the symbol “SABS.” Our Public Warrants are listed on Nasdaq under the symbol “SABSW.”

 

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MARKET INFORMATION FOR SECURITIES AND DIVIDEND POLICY

 

Market Information

 

Our Common Stock and Public Warrants are currently listed on Nasdaq under the symbols “SABS” and “SABSW,” respectively. Prior to the consummation of the Business Combination, BCYP’s common Stock, units and warrants were listed on Nasdaq under the symbols “BCYP,” “BCYPU” and “BCYPW,” respectively. As of the Closing Date and following the completion of the Business Combination, there were 197 holders of record of the Common Stock and 2 holders of record of our Warrants, which excludes holders of our Common Stock and Warrants held in “street name.”

 

Dividend Policy

 

We have never declared or paid any dividends on shares of Common Stock. We anticipate that we will retain all of our future earnings, if any, to fund the development and growth of our business. Any future determination to pay dividends on our capital stock will be at the discretion of our board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

On October 22, 2021, the Company, BCYP and Merger Sub, consummated the Business Combination. In connection with the closing of the Business Combination, BCYP changed its name from Big Cypress Acquisition Corp. to SAB Biotherapeutics, Inc.

 

The following unaudited pro forma condensed combined balance sheet as of September 30, 2021 and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the nine months ended September 30, 2021 present the combination of the financial information of BCYP and OLD SAB after giving effect to the Business Combination, Any adjustments thereto are described in the accompanying notes.

 

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the nine months ended September 30, 2021 gives pro forma effect to the Business Combination as if it had occurred on January 1, 2020. The unaudited pro forma condensed combined balance sheet as of September 30, 2021 gives pro forma effect to the Business Combination as if it were completed on September 30, 2021.

 

The unaudited pro forma condensed combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in this prospectus and incorporated herein by reference:

 

  The historical unaudited condensed financial statements of BCYP as of and for the nine months ended September 30, 2021 and the historical audited financial statements of BCYP as of and for the year ended December 31, 2020; and
     
  The historical unaudited condensed financial statements of OLD SAB as of and for the nine months ended September 30, 2021 and the historical audited financial statements of OLD SAB as of and for the year ended December 31, 2020.

 

The unaudited pro forma condensed combined financial information should also be read together with the section of the prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as other information included elsewhere in the prospectus, which is incorporated herein by reference.

 

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what OLD SAB’s financial condition or results of operations would have been had the Business Combination occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

 

Description of the Business Combination

 

On the Closing Date, Merger Sub merged with and into OLD SAB, with OLD SAB as the surviving company in the Merger, and, after giving effect to such Merger, OLD SAB was renamed SAB Sciences, Inc. and became a wholly-owned subsidiary of BCYP and (ii) BCYP changed its name to “SAB Biotherapeutics, Inc.” In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time (i) each share of common stock and preferred stock of OLD SAB outstanding as of immediately prior to the Effective Time was exchanged for shares Common Stock based on the agreed upon Equity Value and a conversion rate of $10.10; (ii) each outstanding vested and unvested option to purchase shares of OLD SAB common stock was exchanged for a comparable option to purchase Common Stock, based on the Equity Value and a conversion rate of $10.10; and (iii) holders of vested options to purchase shares of OLD SAB common stock received, in the aggregate, 1,507,124 Earnout RSUs related to shares of Common Stock. Additionally, holders of OLD SAB common stock and preferred stock are entitled to the Earnout Shares that were issued into escrow at the Closing, which will be released if certain conditions are met within the Earnout Period. The total number of Earnout Shares and shares underlying the Earnout RSUs equaled 12,000,000 shares of Common Stock, in the aggregate.

 

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Accounting for the Business Combination

 

The Business Combination is accounted for as a reverse recapitalization in conformity with GAAP. Under this method of accounting, BCYP is treated as the “acquired” company for financial reporting purposes. This determination was primarily based on OLD SAB’s stockholders comprising a relative majority of the voting power of the Company, OLD SAB’s operations prior to the acquisition comprising the only ongoing operations of the Company, the majority of OLD SAB’s board of directors being appointed by the Company, and OLD SAB’s senior management comprising a majority of the senior management of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of OLD SAB with the Business Combination being treated as the equivalent of the Company issuing stock for the net assets of BCYP, accompanied by a recapitalization. The net assets of BCYP will be stated at historical costs, with no goodwill or other intangible assets recorded.

 

Other Events in Connection with the Business Combination

 

On October 20, 2021, at a special meeting of BCYP stockholders, the Business Combination was approved. In connection with this vote, shareholders exercised their rights to redeem 8,030,289 shares of BCYP Common Stock at a price of approximately $10.10 per share. Approximately $81.1 million from the Trust Account was used to pay the stockholders. In addition, approximately $13.1 million from the Trust Account was escrowed pursuant to that certain Forward Share Purchase Agreement entered into by and between BCYP and Radcliffe SPAC Master Fund, L.P., a Cayman Islands limited partnership (“Radcliffe”). The remaining amount of approximately $21.9 million was released to the Company.

 

Basis of Pro Forma Presentation

 

The following unaudited pro forma combined condensed consolidated financial statements are based on the separate historical financial statements of SAB Biotherapeutics and BCYP after giving effect to the Business Combination, including pro forma assumptions and adjustments related to the merger, as described in the accompanying notes to the unaudited pro forma combined condensed consolidated financial statements. The unaudited pro forma combined condensed consolidated balance sheet as of September 30, 2021, is presented as if the merger had occurred on September 30, 2021. The unaudited pro forma combined condensed consolidated statement of operations for the nine months ended September 30, 2021, and the year ended December 31, 2020, gives effect to the merger, as if it had been completed on January 1, 2020. The historical financial information has been adjusted on a pro forma basis to reflect factually supportable items that are directly attributable to the merger and, with respect to the statement of operations only, expected to have a continuing impact on consolidated results of operations.

 

The unaudited pro forma combined condensed consolidated statement of operations does not include the effects of the costs associated with any integration or restructuring activities resulting from the merger, as they are nonrecurring in nature. However, the unaudited pro forma combined condensed consolidated balance sheet includes a pro forma adjustment to reduce cash and shareholders’ equity to reflect the payment of certain anticipated merger costs.

 

The following unaudited pro forma condensed combined financial information presents the combination of the financial information of BCYP and SAB Biotherapeutics, adjusted to give effect to the Merger and other events contemplated by the Business Combination Agreement. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

 

27

 

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2021, combines the unaudited adjusted balance sheet of BCYP with the historical unaudited condensed consolidated balance sheet of SAB Biotherapeutics on a pro forma basis as if the Merger and the other events contemplated by the Business Combination Agreement, summarized below, had been consummated on September 30, 2021.

 

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2021, combines the historical unaudited statement of operations of BCYP with the historical unaudited consolidated statement of operations of SAB Biotherapeutics for the nine months ended September 30, 2021, and the year ended December 31, 2020 combines the historical audited statement of operations of BCYP for the period from November 12, 2020 (inception) through December 31, 2020 with the historical audited consolidated statement of operations of SAB Biotherapeutics for the year ended December 31, 2020, giving effect to the transaction as if the Merger and other events contemplated by the Business Combination Agreement had been consummated on January 1, 2020.

 

Management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.

 

The pro forma adjustments reflecting the consummation of the Business Combination are based on certain currently available information and certain assumptions and methodologies that BCYP believes are reasonable under the circumstances. The unaudited condensed combined pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. BCYP believes that its assumptions and methodologies provide a reasonable basis for presenting all the significant effects of the Business Combination based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

 

The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Combined Company. The unaudited pro forma condensed combined financial information should be read in conjunction with the historical financial statements and notes thereto of BCYP and SAB Biotherapeutics.

 

Pursuant to the Business Combination Agreement dated June 21, 2021, and as amended on August 12, 2021, between BCYP and SAB Biotherapeutics, Inc. the Business Combination was consummated on October 22, 2021. Upon closing of the Business combination, Big Cypress Merger Sub merged with SAB Biotherapeutics, with SAB Biotherapeutics as the surviving company of the Merger. Upon closing of the Business Combination, Big Cypress Acquisition Corp. changed its name to “SAB Biotherapeutics, Inc.”. The Business Combination was accounted for as a reverse merger in which SAB Biotherapeutics issued stock for the net assets of BCYP, accompanied by a recapitalization. The net assets of BCYP are stated at historical cost, with no goodwill or other intangible assets recorded upon closing. Historical operations will be those of SAB Biotherapeutics Inc.

 

The aggregate consideration paid to SAB Biotherapeutics, Inc. upon the closing of the Merger was 36,465,343 shares of New SAB Biotherapeutics common stock. The unaudited pro forma condensed combined financial information contained herein incorporates the results of BCYP’s shareholders having elected to redeem 8,030,289 shares of their Public Shares for $81,111,920 in cash based upon actual redemptions.

 

28

 

 

SAB Biotherapeutics, Inc. and Subsidiaries and Big Cypress Acquisition Corp.

Unaudited Pro Forma Condensed Combined Balance Sheet

(In thousands)

As of September 30, 2021

 

  

As of

September 30, 2021

        

As of

September 30, 2021

 
  

SAB Biotherapeutics,

Inc and

Subsidiaries

(Historical)

  

Big Cypress

Acquisition

Corp

(Historical)

  

Transaction

Accounting

Adjustments

    

Pro Forma

Combined

 
                   
ASSETS                      
Current assets:                      
Cash and cash equivalents  $10,751   $668   $27,756  A  $29,954 
              (5,000) B     
              (4,221) C     
Cash held in trust   -    -    7,291  A   7,291 
                       
Accounts receivable, net   10,213    -    -      10,213 
Prepaid expenses and other current assets   944    103    -      1,047 
Total current assets   21,908    771    25,826      48,505 
Non-current assets:                      
Marketable securities held in Trust Account   -    116,158    (116,158) A   - 
Equipment, net   22,568    -    -      22,568 
Deferred offering costs   -    -    -      - 
Operating lease right-of-use assets   2,590    -    -      2,590 
Finance lease right-of-use assets   4,065    -    -      4,065 
Total non-current assets   29,223    116,158    (116,158)     29,223 
TOTAL ASSETS  $51,131   $116,929   $(90,332)    $77,728 
                       
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT                      
Accounts payable  $4,123   $322   $-     $4,445 
Notes payable - current portion   24    -    -      24 
Operating lease liabilities, current portion   1,035    -    -      1,035 
Finance lease liabilities, current portion   180    -    -      180 
Due to related party   -    -    -      - 
Deferred grant income   100    -    -      100 
Accrued expenses and other current liabilities   5,009    -    -      5,009 
Total current liabilities   10,471    322    -      10,793 
Non-current liabilities:                      
Operating lease liabilities, noncurrent   1,754    -    -      1,754 
Finance lease liabilities, noncurrent   3,803    -    -      3,803 
Notes payable, noncurrent   25         -      25 
Warrant liability   -    5,529    -      5,529 
Deferred underwriting fee   -    4,221    (4,221) C   - 
                     - 
Earnout liability   -    -    -  F   - 
Total non-current liabilities   5,582    9,750    (4,221)     11,111 
Total liabilities   16,053    10,072    (4,221)     21,904 
                       
COMMITMENTS AND CONTINGENCIES                      
Temporary equity:                      
Common stock subject to possible redemption   -    116,150    (116,150) A   - 
                       
Stockholders’ equity (deficit):                      
Series A Preferred stock   1    -    (1) E   - 
Series A-1 Preferred stock   -    -    -      - 
Series A-2 Preferred stock   -    -    -      - 
Series A-2A Preferred stock   -    -    -      - 
Series B Preferred stock   -    -    -      - 
Common stock   4    -    3  E   7 
                 G     
Additional paid-in capital   52,650    -    35,039  A   73,394 
              (9,293) D     
              (2) E     
              (5,000) B     
              2,500  G     
              (2,500) G     
Retained earnings (deficit)   (17,577)   (9,293)   9,293  D   (17,577)
              -        
              -  F     
Total stockholders’ equity (deficit)   35,078    (9,293)   (86,111)     55,824 
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)  $51,131   $116,929   $(90,332)    $77,728 

 

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

 

The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of September 30, 2021, are as follows:

 

  (A) Reflects the reclassification of marketable securities held in the BCYP Trust Account to cash, restricted cash held in escrow related to a put option on the New SAB Biotherapeutics’ shares and the reclassification of common stock to permanent equity based on actual redemptions.
  (B) Represents preliminary estimated direct and incremental transaction costs to be incurred. These costs are accounted as a reduction in the combined cash account with a corresponding reduction in APIC consistent with the treatment described in SEC Staff Accounting Bulletin Topic 5.A.
  (C) Reflects the settlement of the deferred underwriting fee.
  (D) Represents recapitalization of BCYP’s historical accumulated deficit.
  (E) Represents recapitalization of historical amounts.
  (F) Represents the potential earnout SAB shareholders could receive in the merged company under the Merger Agreement. Since the earnout is accounted for as an equity transaction, there is no change in equity as the entry would be to deemed dividends and APIC.
  (G) Issuance of Company shares in lieu of cash for professional services related to the transaction

 

29

 

 

SAB Biotherapeutics, Inc. and Subsidiaries and Big Cypress Acquisition Corp.

Unaudited Pro Forma Condensed Combined Statement of Operations

(In thousands, except share and per share amounts)

For the nine months ended September 30, 2021

 

  

For the Nine Months

Ended

September 30, 2021

        

For the Nine Months Ended

September 30, 2021

 
  

SAB Biotherapeutics,

Inc and

Subsidiaries

(Historical)

  

Big Cypress

Acquisition Corp

(Historical)

  

Transaction

Accounting

Adjustments

    

Pro Forma

Combined

 
                   
Revenue:                      
Revenue  $49,818   $-   $-     $49,818 
Operating costs and expenses:                      
Formation and operating costs   -    704    -      704 
Research and development   46,536    -    -      46,536 
General and administrative   9,332    -    -      9,332 
Total operating costs and expenses   55,868    704    -      56,572 
Gain on sale of assets   -    -    -      - 
Loss from operations   (6,050)   (704)   -      (6,754)
Other income (expense):                      
Other income (expense):   670    -    -      670 
Interest income (expense)   15    8    (8)AA    15 
Interest expense   (228)   -    -      (228)
Offering costs allocated to warrants   -    (360)   -      (360)
Change in the fair value of warrants   -    1,496    -      1,496 
Total other income (expense)   457    1,144    (8)     1,593 
Net (loss) income   (5,593)   440    (8)     (5,161)
Income tax provision   -    -    -      - 
Net (loss) income  $(5,593)  $440   $(8)    $(5,161)

 

   Historical Weighted-Average Shares Outstanding   Historical Weighted-Average Shares Outstanding  

Pro Forma

Weighted-Average Shares

Outstanding

 
Weighted common shares outstanding - basic   35,216,000    14,224,714    43,474,777 
Weighted common shares outstanding - diluted   35,216,000    14,224,714    43,474,777 
Basic net (loss) income per share  $(0.16)  $0.03   $(0.12)
Diluted net (loss) income per share  $(0.16)  $0.03   $(0.12)

 

30

 

 

SAB Biotherapeutics, Inc. and Subsidiaries and Big Cypress Acquisition Corp.

Unaudited Pro Forma Condensed Combined Statement of Operations

(In thousands, except share and per share amounts)

For the year-ended December 31, 2020

 

  

For the Year Ended

December 31, 2020

      

For the Year Ended

December 31, 2020

 
   SAB Biotherapeutics, Inc. and Subsidiaries
(Historical)
   Big Cypress Acquisition Corp.
(Historical)
  

Transaction

Accounting
Adjustments

   Pro Forma
Combined
 
                 
Revenue:                    
Revenue  $55,238   $-   $-   $55,238 
Operating costs and expenses:                    
Formation and operating costs   -    9    -    9 
Research and development   27,909    -    -    27,909 
General and administrative   6,772    -    -    6,772 
Total operating costs and expenses   34,681    9    -    34,690 
Gain on sale of assets   -    -    -    - 
Loss from operations   20,557    (9)   -    20,548 
Other income (expense):                    
Other income (expense):   4    -    -    4 
Interest income (expense)   26    -    -    26 
Interest expense   (469)   -    -    (469)
Total other income (expense)   (439)   -    -    (439)
Net income (loss)   20,118    (9)   -    20,109 
Income tax provision   -    -    -    - 
Net income (loss)  $20,118   $(9)  $-   $20,109 

 

   Historical Weighted-Average Shares Outstanding   Historical Weighted-Average Shares Outstanding   Pro Forma Weighted- Average Shares Outstanding 
Weighted common shares outstanding - basic   35,216,000    2,500,000    43.474,777 
Weighted common shares outstanding - diluted   58,051,614    2,500,000    49,433,377 
Basic net income per share  $0.37   $-   $0.46 
Diluted net income per share  $0.35   $-   $0.41 

 

Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

 

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2021, and the year ended December 31, 2020, are as follows:

 

  (AA) Represents the elimination of interest income earned on investments held in Trust Account

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

1. Basis of Presentation and Accounting Policies

 

The Merger will be accounted for as a reverse recapitalization in accordance with GAAP because SAB Biotherapeutics has been determined to be the accounting acquirer under ASC 805. Under this method of accounting, BCYP will be treated as the “acquired” company for financial reporting purposes. Accordingly, the consolidated assets, liabilities and results of operations of SAB Biotherapeutics will become the historical financial statements of New SAB Biotherapeutics, and BCYP’s assets, liabilities and results of operations will be consolidated with SAB Biotherapeutics beginning on the acquisition date. For accounting purposes, the financial statements of New SAB Biotherapeutics will represent a continuation of the financial statements of SAB Biotherapeutics with the Transaction being treated as the equivalent of SAB Biotherapeutics issuing stock for the net assets of BCYP, accompanied by a recapitalization. The net assets of BCYP will be stated at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the Merger will be presented as those of SAB Biotherapeutics in future reports of New SAB Biotherapeutics.

 

The unaudited pro forma condensed combined financial information reflects all BCYP’s public shareholders that exercised redemption rights with respect to their public shares. A total of 8,030,289 shares were redeemed for an aggregate redemption value of $81,111,920. The resulting redemptions will provide SAB Biotherapeutics with cash at closing of the Business Combination of greater than the $5,000,001 Net Tangible Asset value Pursuant to the Business Combination Agreement.

 

2. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

 

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an illustrative understanding of New SAB Biotherapeutics upon consummation of the Merger in accordance with GAAP. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed combined financial information are described in the accompanying notes.

 

The Merger Agreement includes an earnout provision whereby the shareholders of SAB Biotherapeutics shall be entitled to receive additional consideration (“Earnout Shares”) if the Company meets certain Volume Weighted Average Price (“VWAP) thresholds, or a change in control with a per share price exceeding the VWAP thresholds within a five-year period immediately following the Closing, which will be held in escrow until the Earnout contingency is resolved.

 

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Merger occurred on the dates indicated, and does not reflect adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Any cash proceeds remaining after the consummation of the Merger and the other related events contemplated by the Business Combination Agreement are expected to be used for general corporate purposes. The unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of New SAB Biotherapeutics following the completion of the Merger. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed. BCYP and SAB Biotherapeutics have not had any historical relationship prior to the transactions. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

32

 

 

The following summarizes the pro forma shares of New SAB Biotherapeutics Common Stock issued and outstanding immediately after the Merger:

 

(Number of shares in thousands)

 

   Shares (1)   % 
SAB Biotherapeutics, Inc and Subsidiaries Shareholders   36,465    83.9%
Total SAB Biotherapeutics, Inc and Subsidiaries Merger Shares   36,465    83.9%
Total SAB Biotherapeutics, Inc and Subsidiaries Shares   36,465    83.9%
Big Cypress Acquisition Corp Non-Founder Shares   3,470    8.0%
Big Cypress Acquisition Corp Founder Shares   3,292    7.6%
Total Big Cypress Acquisition Corp Shares   6,672    15.6%
Other   248    0.6%
Total Other   248    0.6%
Pro Forma Common Stock at September 30, 2021   43,475    100.0%

 

(1) the table does not include 5.750 million of Public Warrants, 0.2 million of the Private Placement Warrants, 0.6 million of Sponsor Shares subject to vesting and forfeiture, and options to acquire shares of Common Stock under equity plans following the Merger.

 

If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different and those changes could be material.

 

Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed combined financial statements are described in the accompanying notes. The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the Merger occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial statements do not purport to project the future operating results or financial position of BCYP following the completion of the Merger. The unaudited pro forma adjustments represent BCYP management’s estimates based on information available as of the dates of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.

 

The pro forma basic and diluted income per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of the Combined Company’s shares outstanding, assuming the Business Combination occurred on January 1, 2020.

 

3. Income (loss) per share

 

Represents the income per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2020. As the Business Combination and related equity transactions are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net income per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entirety of all periods presented.

 

(In thousands, except share and per share amounts)

 

  

For the Year ended

December 31, 2020

 
  

Pro-Forma

Weighted-Shares

Outstanding

 
     
Pro forma net income  $20,109 
Weighted average shares outstanding of common stock - basic   43,474,777 
Weighted average shares outstanding of common stock - diluted   49,433,377 
Net income per share attributable to common stockholders - basic  $0.46 
Net income per share attributable to common stockholders - diluted  $0.41 

 

  

For the Nine Months ended

September 30, 2021

 
  

Pro-Forma

Weighted-Shares

Outstanding

 
     
Pro forma net loss  $(5,161)
Weighted average shares outstanding of common stock - basic   43,474,777 
Weighted average shares outstanding of common stock - diluted   43,474,777 
Net loss per share attributable to common stockholders - basic  $(0.12)
Net loss per share attributable to common stockholders - diluted  $(0.12)

 

33

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

You should read the following discussion and analysis of our financial condition and results of operations together with the section titled “Selected Consolidated Financial Data” and our consolidated financial statements and the related notes thereto included in this prospectus. Some of the information contained in this discussion and analysis or set forth in this prospectus contain forward-looking statements that involve risks, uncertainties and assumptions. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors.” Please also see the section titled “Special Note Regarding Forward Looking Statements.”

 

Overview

 

SAB Biotherapeutics is a clinical-stage biopharmaceutical company advancing a new class of immunotherapies based on its human polyclonal and monoclonal antibodies. SAB has applied advanced genetic engineering and antibody science to develop transchromosomic (Tc) bovine™ herds that produce fully human antibodies targeted to specific diseases, including infectious diseases such as COVID-19 and influenza, immune system disorders including type 1 diabetes and organ transplantation, and cancer. SAB Biotherapeutics’ versatile and scalable DiversitAb™ platform is applicable to a wide range of human diseases, capable of producing specifically targeted, high-potency immunotherapies. The platform has been expanded and validated through funding awarded from U.S. government emerging disease and medical countermeasures programs, the most recent of which totals up to approximately $203.6 million. SAB Biotherapeutics is advancing clinical programs in two indications, and preclinical development in three indications. In addition, SAB Biotherapeutics is executing on two research collaborations with global pharmaceutical companies, including CSL Behring and an undisclosed collaboration.

 

SAB generated total revenue of $55.2 million and $3.4 million for the years ended December 31, 2020 and 2019, respectively (1,504.9 % growth), and total revenue of $49.8 million and $29.5 million for the nine months ended September 30, 2021 and 2020, respectively (69% growth). Our revenue to date has been primarily derived from government grants, including for the development of a COVID-19 therapeutic. Approximately $101.0 million in funding remains for our current government grants, with an additional $1.7 million remaining for our current government grants pending approval of extensions on the funding for two of the grants.

 

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, autoimmune, and oncology 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 $27.9 million and $8.0 million for the years ended December 31, 2020 and 2019, respectively, and research and development expenses of $46.5 million and $12.6 million for the nine months ended September 30, 2021 and 2020, respectively. We incurred general and administrative expenses of $6.8 million and $4.1 million for the years ended December 31, 2020 and 2019, respectively, and general and administrative expenses of $9.3 million and $4.9 million for the nine months ended September 30, 2021 and 2020, respectively. We have also experienced significant growth in our workforce in recent periods, increasing from 39 employees as of December 31, 2019, to 86 employees as of December 31, 2020 and 143 employees as of September 30, 2021. 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:

 

  invest in research and development activities to optimize and expand our DiversitAb™ platform;
     
  develop new and advance preclinical and clinical progress of pipeline programs;
     
   market to and secure partners to commercialize our products;
     
  expand and enhance operations to deliver products, including investments in manufacturing;

 

34

 

 

  acquire businesses or technologies to support the growth of our business;
     
  continue to establish, protect and defend our intellectual property and patent portfolio;
     
  operate as a public company.

 

To date, we have primarily financed our operations from government agreements, including for the development of a COVID-19 therapeutic and Rapid Response Antibody Program, and the issuance and sale of preferred stock.

 

Our net income for the year ended December 31, 2020 was $20.1 million and our net loss for the year ended December 31, 2019 was $9.0 million. Our net loss for the nine months ended September 30, 2021 was $5.6 million and our net income for the nine months ended September 30, 2020 was $11.7 million. As of September 30, 2021, we had an accumulated deficit of $17.6 million and we had cash and cash equivalents totaling $10.8 million.

 

Recent Developments

 

In February 2021, we submitted a forgiveness application related to our Paycheck Protection Program (“PPP”) loan (the “PPP Loan”). In March 2021, the United States (“U.S.”) Small Business Administration (“SBA”) approved the forgiveness of the PPP Loan, plus accrued interest.

 

On October 22, 2021 (the “Closing Date”), we consummated the previously announced business combination (the “Business Combination”), pursuant to the terms of the agreement and plan of merger, dated as of June 21, 2021 and as amended on August 12, 2021 by the first amendment to the agreement and plan of merger (as may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”) with Big Cypress Acquisition Corp. (“BCYP”) and Big Cypress Merger Sub Inc. (“Merger Sub”), a wholly-owned subsidiary of BCYP.

 

Pursuant to the Business Combination Agreement, on the Closing Date, (i) Merger Sub merged with and into us (the “Merger”), with us as the surviving company in the Merger, and, after giving effect to such Merger, we were renamed SAB Sciences, Inc. and became a wholly-owned subsidiary of BCYP and (ii) BCYP changed its name to “SAB Biotherapeutics, Inc.” (“New SAB”).

 

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger (the “Effective Time”), (i) each share of our Common Stock and our Preferred Stock outstanding as of immediately prior to the Effective Time was exchanged for shares of common stock, par value $0.0001 per share, of New SAB based on the agreed upon our equity value of $300 million (the “Equity Value”) and a conversion rate of $10.10; (ii) each outstanding vested and unvested option to purchase shares of our Common Stock was exchanged for a comparable option to purchase New SAB Common Stock, based on the Equity Value and a conversion rate of $10.10; and (iii) holders of vested options to purchase shares of our common stock received, in the aggregate, 1,507,124 restricted stock units (the “Earnout RSUs”) related to shares of New SAB Common Stock. Additionally, holders of our Common Stock and our Preferred Stock are entitled to receive their pro rata share of the shares of New SAB Common Stock that were issued into escrow at the Closing (the “Earnout Shares”) which will be released if certain conditions are met within the five-year period following the Closing (the “Earnout Period”. The total number of Earnout Shares and shares underlying the Earnout RSUs equaled 12,000,000 shares of New SAB Common Stock, in the aggregate.

 

No fraction of a share of New SAB Common Stock was issued at the Closing, and each person who was otherwise entitled to a fraction of a share of New SAB Common Stock (after aggregating all fractional shares of New SAB Common Stock that otherwise would be received by such holder) received the number of shares of New SAB Common Stock rounded in the aggregate to the nearest whole share of New SAB Common Stock.

 

Key Factors Affecting Our Results of Operations and Future Performance

 

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 the section of this prospectus titled “Risk Factors.”

 

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Components of Results of Operations

 

Revenue

 

Our revenue has historically been generated through grants from government and other (non-government) organizations. We currently have no commercially-approved products.

 

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.

 

For the years ended December 31, 2020 and 2019, and for the nine months ended September 30, 2021 and 2020, we worked on the following grants:

 

Government grants

 

The total revenue for government grants was approximately $52.8 million and $2.9 million, respectively, for the years ended December 31, 2020 and 2019.

 

The total revenue for government grants was approximately $49.8 million and $27.1 million, respectively, for the nine months ended September 30, 2021 and 2020.

 

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. For the years ended December 31, 2020 and 2019, there was approximately $228,000 and $343,000, respectively, in grant income recognized from this grant. For the nine months ended September 30, 2021 and 2020, there was approximately $457,000 and $219,000, respectively, in grant income recognized from this grant. We applied for an extension on the grant funding, which is pending approval. If approved, there is approximately $243,000 in funding remaining for this grant.

 

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 2022. For the years ended December 31, 2020 and 2019, approximately $99,000 and $97,000, respectively, in grant income was recognized from this grant. For the nine months ended September 30, 2021 and 2020, approximately $41,000 and $86,000, respectively, in grant income was recognized from this grant. Approximately $853,000 in funding remains for this grant.

 

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. For the years ended December 31, 2020 and 2019, there was approximately $351,000 and $261,000, respectively, in grant income recognized from this grant. For the nine months ended September 30, 2021 and 2020, there was approximately $72,000 and $248,000, respectively, in grant income recognized from this grant. We applied for an extension on the grant funding, which is pending approval. If approved, there is approximately $1.5 million in funding remaining for this grant.

 

Department of Defense, 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 agreement in 2020 for work on a COVID therapeutic, bringing the agreement total to approximately $143 million. In September 2021, an additional modification for $60.5 million was added to the agreement for advanced clinical development through licensure and commercial manufacturing, bringing the agreement total to approximately $203.6 million. For the years ended December 31, 2020 and 2019, approximately $52.1 million and $2.2 million, respectively, in grant income was recognized from this grant. For the nine months ended September 30, 2021 and 2020, approximately $49.2 million and $26.5 million, respectively, in grant income was recognized from this grant. Approximately $100.1 million in funding remains for this grant.

 

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Other grants (non-government)

 

The total revenue for other grants (non-government) was approximately $2.4 million and $500,000, respectively, for the years ended December 31, 2020 and 2019.

 

We recorded no revenue for other grants (non-government) for the nine months ended September 30, 2021. The total revenue for other grants (non-government) was $2.4 million for the nine months ended September 30, 2020.

 

CSL Behring – there were three contracts for a combined $2.4 million that were started and completed in 2020. These contracts were related to research and development for a COVID-19 therapeutic ($2 million) and two other targets ($400,000). For the year ended December 31, 2020, there was approximately $2.4 million in grant income recognized from this grant. For the nine months ended September 30, 2020, there was approximately $2.4 million in grant income recognized from this grant.

 

Battelle Memorial Institute – this contract was for approximately $2.0 million, starting in April 2018 through January 2019. For the year ended December 31, 2019, there was $400,000 in income recognized from this contract, and the work for this contract was completed as of December 31, 2019.

 

Henry Jackson Foundation – this contract was for $250,000, starting in September 2018 through May 31, 2019. For the year ended December 31, 2019, there was $51,000 in income recognized from this contract, and the work for this contract was completed as of December 31, 2019.

 

Operating Expenses

 

Research and Development Expenses.

 

Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials for employees and contractors engaged in research and product development, 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 our behalf. Research and development expenses are tracked by target/project code. Indirect general and administrative costs are allocated based upon a percentage of direct costs. We expense all research and development costs in the period in which they are incurred.

 

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.

 

For the years ended December 31, 2020 and 2019, and for the nine months ended September 30, 2021 and 2020, we had contracts with multiple contract research organizations (“CRO”) 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 approximately 91% of the contract has been paid through September 30, 2021. 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 approximately 90% of the contract has been paid through September 30, 2021.

 

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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.

 

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). Research and development expenses by component for the nine months ended September 30, 2021 and 2020 and for the years ended December 31, 2020 and 2019 were as follows:

 

  

Nine Months Ended

September 30,

  

Year Ended

December 31,

 
   2021   2020   2020   2019 
Salaries & benefits  $7,148,648   $3,377,947   $4,823,808   $2,776,526 
Laboratory supplies   11,716,471    4,663,355    11,561,462    1,470,637 
Animal care   3,324,915    1,060,973    1,626,791    1,334,118 
Contract manufacturing   12,556,134    -    4,216,868    - 
Clinical trial expense   4,826,311    429,986    871,607    - 
Outside laboratory services   3,355,537    1,495,375    2,220,277    1,142,086 
Project consulting   1,214,375    255,356    693,093    89,029 
Facility expense   2,248,547    1,172,838    1,730,926    1,077,944 
Other expenses   144,733    145,503