SAB Biotherapeutics, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the fiscal year covered by this Form 10-K. Management’s Report on Internal Control over Financial Reporting This Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm as we determined that the Company is currently similarly situated to a newly public company due to the relatively recent closing of the Business Combination, which was accounted for as a reverse recapitalization transaction, in which SAB Biotherapeutics, Inc. is treated as the acquirer for financial accounting purposes. In making this determination, we have considered the timing and effects of the Business Combination, which closed on October 22, 2021, and after which, there was a complete change in the business, operations, accounting, board of directors and executive management of the Company and all of the business of the Company was that of SAB Biotherapeutics, Inc. As a result, the internal controls related to the Company’s prior business no longer exist with respect to the Company’s current business. Management was not in a position to conduct an assessment because of the Business Combination. We plan to file our first assessment regarding internal control over financial reporting in the Form 10-K for the year ending December 31, 2022. Changes in Internal Control Over Financial Reporting Other than what has been described above, there were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 111 Item 9B. Other Information . Sanford Lease Agreement On March 28, 2022, we entered into a Third Amendment to the Amended and Restated Lease Agreement (the “Third Amendment”) with Sanford Health, a South Dakota non-profit corporation (“Sanford”) (as amended by the Third Amendment, the "Sanford Lease Agreement"). The Third Amendment, among other things, provides for the least by us from Sanford of an additional 4,035 square feet of storage, laboratory and office space. The Third Amendment modifies the rent due under the Sanford Lease Agreement to $25.27 per square foot, or $841,061.41 due on an annual basis ($70,088.45 due on a monthly basis), until increased pursuant to the terms of the Sanford Lease Agreement. The Third Amendment also clarifies the obligations of the respective parties as to installation and maintenance related to information technology infrastructure and other utilities. The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Third Amendment, which is filed with this Form 10-K as Exhibit 10.13 and is incorporated herein by reference. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . Not applicable. 112 PART III Item 10. Directors, Executive Officers and Corporate Governance. Directors and Executive Officers The following persons are serving as our executive officers and directors: Name Age Position(s) Samuel J. Reich 47 Class III Director and Executive Chairman of the Board Christine Hamilton, MBA 65 Class III Director Eddie J. Sullivan, PhD 56 Class III Director, President and Chief Executive Officer Mervyn Turner, PhD. 74 Class I Director Jeffrey G. Spragens 79 Class II Director William Polvino, MD 61 Class I Director David Link, MBA 66 Class II Director Russell P. Beyer, MBA, CMA 66 Chief Financial Officer Thomas Luke, MD 60 Chief Medical Officer Christoph Bausch, PhD 51 Chief Science Officer Kipp Erickson, PhD 60 Chief Operating Officer Rick Finnegan, MBA 62 Chief Business Officer Melissa Ullerich 49 Chief Corporate Communications, Investor Relations Officer Family Relationships There are no family relationships among any of our directors or executive officers. Edward Hamilton, our former Executive Chairman, retired from such role as of the consummation of the Business Combination. Mr. Hamilton was named as a board observer in October 2021. Edward Hamilton is Christine Hamilton’s husband. Executive Officers Samuel J. Reich has served as a member of our board of directors from November 2020 and was named executive chairman of our board of directors in October 2021. Mr. Reich served as our Chief Executive Officer and Chief Financial Officer from November2020 until October 2020 prior to the closing of our Business Combination. Mr. Reich co-founded Biscayne Neurotherapeutics, Inc. in 2011 and served as its Executive Chairman until its sale to Supernus Pharmaceuticals (Nasdaq: SUPN) in October 2018. Biscayne Neurotherapeutics was focused on novel treatments for seizure disorders. Previously, Mr. Reich was the Executive Vice President of OPKO Ophthalmologics, a division of OPKO Health, Inc. (Nasdaq:OPK) from March 2007 to November 2008, where Mr. Reich served on the executive committee and lead the Ophthalmologics business division. Prior to his position at OPKO, Mr. Reich was the Founder and Executive Vice President of Acuity Pharmaceuticals, Inc., where he worked from July 2002 through March 2007, at which time Acuity Pharmaceuticals merged with OPKO Health. Mr. Reich was a doctoral candidate in the Department of Ophthalmology at the University of Pennsylvania Medical School. He left graduate school prior to the completion of his Ph.D. to establish Acuity. Prior to that, he was a graduate student at the University of Pennsylvania in the Biomedical Studies graduate program. He has authored six peer- reviewed scientific publications and is currently an inventor on sixteen issued U.S. patents and over50 issued foreign patents. Mr. Reich holds a B.A. with High Honors in Biochemistry from Clark University, cum laude, Phi Beta Kappa. 113 Eddie J. Sullivan, PhD , is our co-founder and has served as our president and CEO since 2014. Dr. Sullivan has served in biopharma leadership positions for more than 25 years. Prior to joining us, he held the CEO role or other leadership roles in our predecessor entities, including CEO of Hematech, a subsidiary of Kyowa Hakko Kirin. During that time, he led initiatives to develop infectious disease, cancer, and autoimmune immunotherapies. In addition to raising over $250 million in capital to develop biopharmaceutical platform technologies, he has also led several successful mergers and acquisitions. A recognized thought leader in antibodies and transgenic animals, Dr. Sullivan serves on the board of directors for the Biotechnology Innovation Organization (BIO) and has served on its executive committee. He has worked with industry committees and discussion groups that have focused on animal biotechnology, regulatory framework, human immunotherapies, and global health threats. Dr. Sullivan was governor-appointed to South Dakota’s Research Commercialization Council and is Chairman of the state’s National Science Foundation-EPSCoR committee. He also founded, served as president, and remains an advisor to the state affiliate of BIO, South Dakota Biotech, and in 2014 was honored for his leadership, innovation, vision, and entrepreneurship with the inaugural LIVE award. He holds an undergraduate degree from the University of Arizona and graduate degrees from Brigham Young University, Kennedy-Western University, and Utah State University in both reproduction and business. Russell P. Beyer, MBA, CMA , has served as our Chief Financial Officer since September 2021. Mr. Beyer is a global strategic business leader, bringing more than 20 years of experience working with Fortune 100 companies in the pharmaceutical industry, such as Teva, AstraZeneca, and IPR Pharmaceuticals. In addition to working in the pharmaceutical industry, Russell also served in strategic financial leadership roles for World Fuel Services and Hewlett-Packard. His professional background encompasses extensive experience in fostering a team-based approach to leading merger and post-merger integration activities, developing shared services operations, implementing global ERP platforms, and delivering strong profitability for the companies he served. He received his MBA from Simon School of Business at the University of Rochester, and his BA from St. Lawrence University. Dr. Tom Luke, MD , has served as our Chief Medical Officer since 2018. Dr. Luke joined the company following 30 years with the United States Navy and ten years as a Principal Investigator with the Henry Jackson Foundation at the Naval Medical Research Center—the last four working with our DiversitAb platform on several emerging infectious disease targets. He has over 20 years of clinical studies experience and is a recognized and widely published expert. Dr. Luke’s experience in public health and immunology includes his work as deputy director of Population Health and Preventive Medicine at the Bureau of Medicine and Surgery in Washington, DC. An engineering graduate of the United States Naval Academy, with a graduate degree in business and management from Webster University, Luke received his MD and a Master of Tropical Medicine and Hygiene degree from the Uniformed Services University of Health Sciences. Christoph Bausch, PhD, MBA , has served as our Chief Science Officer since March 2017. Dr. Christoph Bausch is an experienced research scientist, biotech entrepreneur and business development executive who has led the successful discovery, development, and commercialization of platform technologies in the life sciences. Since September 2011, he has been the Founder and Director of Nanopore Diagnostics, a molecular diagnostic company commercializing platform sensor technology for rapid microbial diagnostics. Since October 2011, he has acted as President of Keion Group, LLC, a life science consulting firm. Dr. Bausch held several science-based business development positions prior to joining SAB, most recently for multi-billion-dollar global biorefining leader POET, LLC, where he structured strategic partnerships, prospected, and vetted new technologies and streamlined research and development activities. He also worked in both research and commercialization roles for Fortune 500 life science and high technology company Sigma-Aldrich, now MilliporeSigma. Dr. Bausch is a microbiologist by training and received his Ph.D. in Microbiology at The Ohio State University (Columbus, Ohio), completed Post-Doctoral Training at the Stowers Institute for Medical Research (Kansas City, Missouri). He earned an M.B.A. from St. Louis University (St. Louis, Missouri) and a B.A. in Biology from the University of Nebraska-Lincoln (Lincoln, Nebraska). 114 Kipp Erickson, PhD , has served as our Chief Operating Officer since March 2021. Dr. Erickson has over 25 years of both human and veterinary pharmaceutical discovery and development experience across a range of therapeutic modalities focused on translational medicine and commercial development. He has held both executive and operational leadership roles in product innovation, regulatory dossiers, and commercial development. Most recently, Dr. Erickson served as Chief Operating Officer of RTI, LLC from July 2018 through February 2021, a leading biomedical contract research organization which provides consulting services and development support to global clients in human and animal health, biopharma and advanced feed/nutrition industries. From December 2016 to March 2021, Dr. Erickson worked as a translational medicine and research consultant, and provided services ranging from drug discovery and candidate validation, to clinical development, market research and business case valuations, and commercial launch and product development. He also has a multi-disciplinary background in human drug discovery, safety and development with roles at Pharmacia, Procter and Gamble Pharmaceuticals, and Pfizer, along with drug discovery and product development in animal health from Pfizer Animal Health, Zoetis and Intrexon. Dr. Erickson is a cardiovascular and respiratory scientist by training and received his doctorate from the College of Veterinary Medicine at Kansas State University with his post-doctoral work at the Medical College of Wisconsin and University of California-San Diego, School of Medicine. He received his B.S. in Animal Science from University of Nebraska-Lincoln. Rick Finnegan, MBA, has served as our Chief Business Officer since September 2018. Mr. Finnegan is a veteran of the biopharma industry with experience at companies ranging in size and complexity from pre-IPO start-ups to Merck & Co., a Fortune 50 company. Mr. Finnegan has launched multiple brands in the US and globally across a variety of therapeutic categories including orphan diseases and has managed brands at all stages of the product life cycle—from pre-clinical development to mature, multi- billion -dollar flagship franchises. Prior to joining SAB Biotherapeutics, Mr. Finnegan most recently served as SVP of Program Management for rEVO Biologics, an LFB Biotherapeutics Company, from 2014 to 2018. As Executive Vice President for inVentiv Health, now Syneos Health, he expanded commercial operations in Japan, increasing revenues seven-fold, while launching entities in China, Korea 
 and Australia. He also led Prague-based Glenmark Therapeutics as General Manager and President of its European Specialty Pharmaceuticals division. While in leadership roles with Merck, GTC Therapeutics, Critical Therapeutics and Genzyme , now Sanofi , Rick took multiple products from development through clinical trials and to market. Mr. Finnegan holds a Master of Science in Management from Massachusetts Institute of Technology, Sloan School of Management, and a Bachelor of Science in Business Administration from the University of New Hampshire Whittemore School of Business and Economics. Melissa Ullerich , has served as our Chief of Corporate Communications and Investor Relations Officer since March 2020. Mr. Ullerich joined the Company in November 2018, and from that time until March 2020 served as SVP of Corporate Communications. Ms. Ullerich is a communications executive with more than 20 years of experience in strategic leadership roles, specializing in transformational and disruptive emerging biotechnologies in corporate development, brand strategy and transactional communications, including mergers, acquisitions, and IPOs. Prior to joining the Company, Ms. Ullerich acted as a private marketing and communications strategist for emerging and established companies from July 2009 to November 2018. Over the course of her career, Ms. Ullerich has played a strategic role in more than investments and commercial transactions representing over $2 billion in aggregate value, working with C-suite executives to help companies achieve next-level growth. During her career, Ms. Ullerich has served in several strategic leadership roles as an executive and advisor in corporate communications, media relations, brand strategy, corporate development, corporate affairs, strategic partnerships, community relations and investor relations. During her career, she has developed and implemented high-profile financial communications plans for the launch of public markets debuts, road shows, shareholder meetings, and other strategic events. Ms. Ullerich holds a B.S. in Journalism and a B.A. in Visual Arts from South Dakota State University. 115 Non-Employee Directors Jeffrey G. Spragens has served as a member of our board of directors since November 2020. From 2005 through 2013, Mr. Spragens was a Co-Founder and the CEO of SafeStitch Medical, Inc., a medical device company that pioneered incisionless surgery techniques that helps to relieve GERD and obesity. In 2013, SafeStitch merged with TransEnterix, Inc. (NYSE: TRXC). In addition, Mr. Spragens was one of the three founding board members of North American Vaccine, which became a publicly traded company in 1990. At North American Vaccine, Mr. Spragens was responsible for securing initial financing and building a commercial manufacturing facility. Mr. Spragens was instrumental in North American Vaccine’s acquisition by Baxter International (NYSE: BAX) in 1999. Mr. Spragens has also been a successful real estate developer and entrepreneur. Mr. Spragens was President of FCH services from 1973 until 1986. FCH developed and managed units of coop and condo housing financed with HUD financing with offices in several major cities. In 1986, Mr. Spragens converted to condo ownership 1,000 apartment units in San Mateo, California, resulting in one of the largest residential projects in California at that time. Mr. Spragens was Managing Partner of Gateway Associates, Inc. from 1990 to 2000. In addition, Mr. Spragens is President and 50% owner of Mint Management Company, a residential property management company he co-founded in 1987, which develops, owns and operates apartment units in New Jersey, Michigan and Kansas. Mr. Spragens developed and continues to own and operate Inman Grove Shopping Center in Edison, New Jersey. Mr. Spragens is also a well-known and respected philanthropist. Mr. Spragens is a Founding Board Member and Treasurer of Foundation for Peace. Foundation for Peace provides healthcare, education, and clean water to those in need in Dominican Republic and Haiti. He is also a member of the Board of Directors and Finance Committee of Hernia Help, which provides free hernia surgery to underserved children and adults in developing countries. Mr. Spragens has a BA from the University of Cincinnati, a Law Degree from George Washington University, and an MA from American University. Mr. Spragens is well qualified to serve on our board of directors because of his extensive public company management and multi-sector investment experience, and his public company board experience. Christine Hamilton, MBA , is our co-founder and has served as a member of our board of directors since 2014. Ms. Hamilton is the co-owner and managing partner of Christiansen Land and Cattle, Ltd., a large diversified farming and ranching operation in central South Dakota, and is also the co-owner of Dakota Packing, Inc., a wholesale meat distribution business. Ms. Hamilton is a director of Titan Machinery, a publicly-traded Farm and Construction Equipment Company, and a former director for the Federal Reserve Bank, Ninth District, located in Minneapolis, Minnesota. Among other attributes, skills and qualifications, the Board believes that Ms. Hamilton is uniquely qualified to serve as a director based on her extensive experience in the agri-business sector and in management roles and her knowledge of operating strategies and priorities and challenges in business decision-making. Ms. Hamilton has an MBA in Entrepreneurship from the University of Arizona and an AB in Philosophy from Smith College. Dr. William J. Polvino, MD , has served as a member of our board of directors since 2019, after having served as our business advisor for several years. Dr. Polvino is pharmaceutical entrepreneur with more than 25 years of experience in the healthcare arena. He is currently chief executive officer of Bridge Medicines, a pioneering drug discovery company focused on advancing promising early technologies from concept to clinic. Prior to Bridge Medicines, Dr. Polvino was president and chief executive officer of Veloxis Pharmaceuticals A/S (NASDAQ-OMX: VELO), a public biotechnology company that deployed proprietary formulation technology to develop and commercialize an innovative oral drug product for transplant patients. He also served as president and CEO of Helsinn Therapeutics (formerly Sapphire Therapeutics) and has held executive and senior-level positions in drug development at Merck, Wyeth and Theravance. Dr. Polvino earned his medical degree from Rutgers Medical School and a B.S. in Biology from Boston College. He trained in internal medicine at Massachusetts General Hospital and was a fellow in clinical pharmacology at the National Institutes of Health prior to entering the pharmaceutical and biotechnology industry. Dr. Mervyn Turner, PhD , has served as a member of our board of directors since 2020. Dr. Turner has nearly 35 years of experience in pharmaceutical drug discovery, research and development, licensing and business development, emerging markets strategy development and implementation. He spent 27 years at Merck & Co. Inc., holding positions of increasing responsibility in Merck Research Laboratories before joining the company’s Executive Committee as Chief Strategy Officer. Upon his retirement from Merck & Co. in 2011, Dr. Turner founded a private consulting firm, through which he acts as an advisor to several institutions, including Bay City Capital, a San Francisco-based venture firm, Bridge Medicines, a commercial incubator for early-stage innovation based in New York City, and Adagene, a China-based therapeutic antibody company. Dr. Turner is also a member of the Board of EnGeneIC (Sydney, Australia), and the chairman of the board of LUNAC. He also serves on the scientific advisory boards of Blade Therapeutics and Spinogenix. Dr. Turner is a senior healthcare advisor to Lazard, a leading financial services and investment banking firm. He holds his Ph.D. in Chemistry and his B.S. in Chemistry from the University of Sheffield, and completed his post-doctoral training at Harvard University. 116 David Link, MBA , has served as a member of our board of directors since 2018 and is currently Vice-Chairman. Mr. Link is the former executive vice president and chief strategy office at Sanford Health with more than three decades of experience in strategy, planning and financial operations. During his tenure, Mr. Link contributed significantly to growing the organization from a regional health system into one of the nation’s largest non-profit, integrated health care delivery systems. He was also charged with overseeing Sanford Health Plan, Sanford Foundation and research and development, including Sanford Research. Under his leadership, the initial Sanford Clinic was created as well as the development of Sanford World Clinics, an initiative designed to provide communities around the world with permanent, sustainable health care infrastructure. Currently, Dave serves as an appointed program director in the President’s Office at Dakota State University, one of the nation’s leading programs in cyber security. Dave holds board or committee positions with Enterprise 605, the South Dakota REACH Committee, South Dakota Research and Commercialization Council and Sanford Research. In 2019, he was honored for his exemplary leadership and support of the state’s bioscience industry with the LIVE Award at the South Dakota Biotech. Dave holds a bachelor’s degree in data processing and computer science, an MBA from the University of South Dakota and a master’s in healthcare administration from the University of Minnesota. Board Composition Our business and affairs are organized under the direction of our board of directors. Our board currently consists of seven (7) directors divided into three classes as follows: • each Class I director having a term that expires immediately following our first annual meeting of stockholders following the closing of the Business Combination, which shall be the annual meeting of stockholder for the calendar year ended December 31, 2022; • each Class II director having a term that expires immediately following our annual meeting of stockholders for the calendar year ended December 31, 2023; and • each Class III director having a term that expires immediately following our annual meeting of stockholders for the calendar year ended December 31, 2024 or, in each case, until their respective successor is duly elected and qualified, or until their earlier resignation, removal or death. Dr. Polvino and Dr. Turner currently serve as the Class I directors, Messrs. Link and Spragens currently serve as the Class II directors, and Mrs. Hamilton and Messrs. Reich and Sullivan currently serve as Class III directors. At each annual meeting of stockholders, the successors to directors whose terms then expire will serve until the third annual meeting following their election and until their successors are duly elected and qualified. The authorized size of the board of directors will be fixed exclusively by resolutions of the board of directors. The authorized number of directors may be changed only by resolution of the board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed between the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of the board of directors may have the effect of delaying or preventing changes in its control or management. Our board of directors may be removed for cause by the affirmative vote of the holders of at least 66 2/3% of its voting stock. Board Meetings During 2021, our board of directors held 10 meetings, and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served. 117 Committees of the Board of Directors Our board of directors has three standing committees: an audit committee, a nominating and corporate governance committee (“nominating committee”) and a compensation committee. Subject to phase-in rules and a limited exception, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and Nasdaq rules require that the compensation committee and nominating committee of a listed company be comprised solely of independent directors. Each of our committees is comprised entirely of independent directors. Audit Committee On October 22, 2021, we established an audit committee of the board of directors. Jeffrey Spragens, William Polvino and David Link serves as members of the audit committee, with Jeffrey Spragens serving as the Chairman of the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each of Dr. Polvino and Messrs. Spragens and Link meet the independent director standard under Nasdaq listing standards and under Rule 10A-3(b)(1) of the Exchange Act. Each member of the audit committee is financially literate, and our board of directors has determined that Mr. Spragens qualifies as an “audit committee financial expert” as defined in applicable SEC rules. We adopted a restated audit committee charter on October 22, 2021 which details the principal functions of the audit committee, including: • the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us; • pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; • setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations; • setting clear policies for audit partner rotation in compliance with applicable laws and regulations; • obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii)all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence; • reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and • reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the FASB, the SEC or other regulatory authorities. 118 Compensation Committee On October 22, 2021, we established a compensation committee of the board of directors. Christine Hamilton, William Polvino and Mervyn Turner serves as members of the compensation committee. Christine Hamilton serves as the Chairman of the compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent. Each of Dr. Polvino, Dr. Turner and Ms. Hamilton are independent. We adopted a restated compensation committee charter on October 22, 2021, which details the principal functions of the compensation committee, including: • reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance considering such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; • reviewing and approving on an annual basis the compensation, if any is paid by us, of all our other officers; • reviewing on an annual basis our executive compensation policies and plans; • implementing and administering our incentive compensation equity-based remuneration plans; • assisting management in complying with our proxy statement and Form 10-K disclosure requirements; • approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; • if required, producing a report on executive compensation to be included in our annual proxy statement; and • reviewing, evaluating, and recommending changes, if appropriate, to the remuneration for directors. Notwithstanding the foregoing, other than as indicated in this Form 10-K, no compensation of any kind, including finders, consulting, or other similar fees, will be paid to any of our existing stockholders, officers, directors, or any of their respective affiliates, prior to, or for any services they render to effectuate the offering. The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC. Compensation Committee Interlocks and Insider Participation No person who served as a member of the compensation committee during the fiscal year ended December 31, 2021 was a current or former officer or employee of the Company or engaged in certain transactions with the Company required to be disclosed by regulations of the SEC. Additionally, there were no compensation committee “interlocks” during the fiscal year ended December 31, 2021, which generally means that no executive officer of the Company served as a director or member of the compensation committee of another entity, one of whose executive officers served as a director or member of the compensation committee of the Company. 119 Nominating Committee On October 22, 2021, we established a nominating committee of the board of directors. David Link, Christine Hamilton, Jeff Spragens and Mervyn Turner serve as members of the Nominating and Governance Committee. David Link serves as the Chairman of the Nominating and Governance Committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the nominating committee, all of whom must be independent. Each of Ms. Hamilton, Mr. Link, Mr. Spragens and Dr. Turner are independent. We adopted a restated nominating committee charter on October 22, 2021, which details the purpose and responsibilities of the nominating committee, including: • screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board, and recommending to the board of directors’ candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors; • developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines; and • reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. The nominating committee will consider several qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by stockholders and other persons. We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Director Nominations The process of recommending director nominees for selection by the board of directors is undertaken by the nominating committee (see above). The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws. 120 Section 16 Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires certain of our officers and our directors, and persons who own more than 10 percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors, and greater than 10 percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of copies of such forms received by us, we believe that during the year ended December 31, 2021, all filing requirements applicable to all of our officers, directors, and greater than 10% beneficial stockholders were timely complied with. Code of Ethics We adopted a restated Code of Ethics applicable to our directors, officers, and employees. A copy of our Code of Ethics and copies of our audit, nominating and compensation committee charters are available on our website at https://www.sabbiotherapeutics.com/. In addition, a copy of the Code of Ethics will be provided without charge upon written request, addressed to: We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. Please see “ Where You Can Find Additional Information ” for additional information. 121 Item 11. Executive Compensation. The following is a discussion and analysis of compensation arrangements of the Company’s named executive officers. This discussion may contain forward-looking statements that are based on the Company’s current plans, considerations, expectations and determinations regarding future compensation programs. The actual compensation programs that the Company adopts may differ materially from the currently planned programs that are summarized in this discussion. As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies. Summary Executive Compensation Table The following table sets forth information regarding the compensation awarded to, earned by or paid to Our named executive officers for the fiscal years ended December 31, 2021 and 2020. Salary Option Awards (1) Non-Equity Incentive Plan Compensation All Other Compensation Total Name and Principal Position Year ($) ($) ($) ($) ($) Eddie J. Sullivan, PhD. 2021 376,154 — 140,000 10,667 526,821 President and Chief Executive Officer 2020 344,615 — 124,500 9,750 478,865 Samuel J. Reich 2021 52,731 2,741,235 (2) — 1,660 2,795,626 Executive Chairman of the Board of Directors 2020 — — — — — Melissa Ullerich 2021 256,196 870,751 (3) 266,126 — 1,393,073 EVP, Chief of Corporate Communications, Investor Relations Officer 2020 — — — — — (1) Represents the aggregate grant date fair value of stock option awards granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation . The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. A discussion of the assumptions used in calculating the amounts in this column may be found in the Notes to our audited consolidated financial statements for the year ended December 31, 2021 set forth in this Form 10-K. These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented. (2) We granted Samuel J. Reich a stock option to purchase up to 350,000 shares of our common stock at an exercise price of $11.17 per share, the closing price of our common stock on November 17, 2021. The shares subject to this stock option award will vest as to 33.3% of the shares on October 25, 2022, and vest as to the remainder of the shares in 24 equal monthly installments thereafter. (3) We granted Melissa Ullerich a stock option to purchase up to 104,689 shares of our common stock at an exercise price of $4.04 per share, an estimate of the fair value of our common stock determined with the assistance of an independent third-party valuation firm. The shares subject to this stock option award vested as to 33.3% of the shares on March 29, 2021, and vest as to the remainder of the shares in 24 equal monthly installments thereafter. 122 Outstanding Equity Awards at Fiscal 2021 Year-End The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2021. Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Exercisable Market Value of Shares or Units of Stock That Have Not Vested ($) Eddie J. Sullivan, PhD. 139,585 — 0.54 8/4/2024 — — 162,850 — 0.54 12/11/2024 162,850 — 0.54 12/11/2024 23,264 — 2.69 4/26/2030 Samuel J. Reich — 350,000 (1) 11.17 11/16/2031 — — Melissa Ullerich 58,161 — 2.15 10/31/2028 — — 6,979 — 2.69 4/26/2030 61,068 43,621 (2) 4.04 6/16/2031 (1) The shares subject to this stock option award will vest as to 33.3% of the shares on October 25, 2022, and vest as to the remainder of the shares in 24 equal monthly installments thereafter. (2) The shares subject to this stock option award vested as to 33.3% of the shares on March 29, 2021, and vest as to the remainder of the shares in 24 equal monthly installments thereafter. 123 Named Executive Officer Employment Arrangements Below are descriptions of the current employment agreements with our named executive officers. Eddie J. Sullivan On March 1, 2021, we entered into an Executive Employment Agreement with Dr. Sullivan to continue to serve as our President & Chief Executive Officer. The agreement provides Dr. Sullivan an annual base salary of $377,200, and his eligibility to participate in the Company’s benefit plans generally. The agreement also subjects Dr. Sullivan to standard nondisclosure, invention assignment, and arbitration provisions. If Dr. Sullivan’s employment is terminated by the Company without Cause (as defined in the employment agreement) (other than for death or disability) or the term of his employment is not renewed, Dr. Sullivan will receive (i) a severance payment equal to 1 year of his then base salary, payable either in a lump sum or in accordance with the Company’s then-current payroll practices and (ii) the applicable bonus amounts prorated for the portion of the calendar year Dr. Sullivan was employed so long as he was employed by the Company as of April 1st of the year of termination and the board of directors has approved a bonus plan for that year (such bonus amount payable by the end of the Company’s fiscal year following the termination). Samuel J. Reich On November 17, 2021, we entered into an Executive Employment Agreement with Mr. Reich to serve as our Executive Chairman of the Board of Directors. The agreement provides Mr. Reich an annual base salary of $350,000, and his eligibility to participate in the Company’s benefit plans generally. The agreement also subjects Mr. Reich to standard nondisclosure, invention assignment, and arbitration provisions. If Mr. Reich's employment is terminated by the Company without Cause (as defined in the employment agreement) (other than for death or disability) or the term of his employment is not renewed, Mr. Reich will receive (i) a severance payment equal to 1 year of his then base salary, payable in a lump sum five business days after his release becomes final, (ii) the applicable accrued but unpaid annual bonus, if any, for the fiscal year ended prior to his date of termination, payable at the same time annual bonuses for such fiscal year are paid to other key executives of the Company, (iii) one hundred percent of his outstanding unvested equity awards as of the date of termination will be fully vested and exercisable, and (iv) reimbursement of the COBRA premiums, if any, for continuation coverage for Mr. Reich, his spouse and dependents under the Company’s group health, dental and vision plans for a twelve month period from the date of termination. Melissa Ullerich On June 6, 2021, we entered into an Executive Employment Agreement with Ms. Ullerich to serve as EVP, Chief Communications & Investor Relations Officer. The agreement provides Ms. Ullerich an annual base salary of $275,000, and her eligibility to participate in the Company’s benefit plans generally. The agreement also subjects Ms. Ullerich to standard nondisclosure, invention assignment, and arbitration provisions. If Ms. Ullerich's employment is terminated by the Company without Cause (as defined in the employment agreement) (other than for death or disability) or the term of her employment is not renewed, Ms. Ullerich will receive (i) a severance payment equal to 1 year of her then base salary, payable either in a lump sum or in accordance with the Company’s then-current payroll practices and (ii) the applicable bonus amounts prorated for the portion of the calendar year Ms. Ullerich was employed so long as she was employed by the Company as of April 1st of the year of termination and the board of directors has approved a bonus plan for that year (such bonus amount payable by the end of the Company’s fiscal year following the termination). 124 Summary Director Compensation Table The following table sets forth information regarding the compensation awarded to, earned by or paid to our directors for the fiscal year ended December 31, 2021. Name Fees Earned or Paid in Cash ($) Option Awards (1) ($) Stock Awards (1) ($) Total ($) Samuel J. Reich — 2,741,235 — 2,741,235 Christine Hamilton, MBA 25,000 — — 25,000 Eddie J. Sullivan, PhD — — — — Mervyn Turner, PhD. 25,000 — — 25,000 Jeffrey G. Spragens — — — — William Polvino, MD 25,000 — — 25,000 David Link, MBA 25,000 — — 25,000 (1) Represents the aggregate grant date fair value of stock option awards granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation . The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. A discussion of the assumptions used in calculating the amounts in this column may be found in the Notes to our audited consolidated financial statements for the year ended December 31, 2021 set forth in this Form 10-K. These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented. 125 SAB Biotherapeutics 2021 Equity Incentive Plan The SAB Biotherapeutics 2021 Equity Incentive Plan (the “Incentive Plan”) was adopted in connection with, and become effective at the closing of, the Business Combination. Summary of the Incentive Plan General The Incentive Plan covers the grant of awards to our employees (including officers), non-employee consultants and non-employee directors and those of our affiliates. For purposes of the Incentive Plan, our affiliates include any corporation, partnership, limited liability company, joint venture or other entity, with respect to which we, directly or indirectly, own either (i) stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock entitled to vote, or more than fifty percent (50%) of the total value of all shares of all classes of stock of such corporation, or (ii) an aggregate of more than fifty percent (50%) of the profits interest or capital interest of any non-corporate entity. The compensation committee administers the Incentive Plan. The full Board must approve all decisions regarding awards to non-employee directors. Up to a maximum of 11,000,000 shares of our common stock may be delivered in settlement of awards granted under the Incentive Plan initially. The number of shares authorized for issuance will increase each fiscal year, beginning this fiscal year 2022 and occurring each year thereafter through 2031, by 2.0% of the number of our shares of common stock issued and outstanding on a fully-diluted basis as of the last day of the preceding fiscal year (such lesser number of shares as determined by our board of directors in its sole discretion). In no event, however, shall the aggregate number of shares that may be issued pursuant to this annual increase under the Incentive Plan exceed 5,000,000. Up to a maximum of 11,000,000 shares of our common stock may be issued under the Incentive Plan pursuant to the exercise of incentive stock options. The stock delivered to settle awards made under the Incentive Plan may be authorized and unissued shares or treasury shares, including shares repurchased by us for purposes of the Incentive Plan. If any shares subject to any award granted under the Incentive Plan (other than a substitute award as described below) is forfeited or otherwise terminated without delivery of such shares (if such shares are returned to us due to a forfeiture restriction under such award), the shares subject to such awards will again be available for issuance under the Incentive Plan. However, any shares that are withheld or applied as payment for shares issued upon exercise of an award or for the withholding or payment of taxes due upon exercise of an award will continue to be treated as having been delivered under the Incentive Plan and will not again be available for grant under the Incentive Plan. Upon settlement of any stock appreciation rights (“SARs”), the number of shares underlying the portion of the SARs that is exercised will be treated as having been delivered for purposes of determining the maximum number of shares available for grant under the Incentive Plan and shall not again be treated as available for issuance under the Incentive Plan. If a dividend or other distribution (whether in cash, shares of common stock or other property), recapitalization, forward or reverse stock split, subdivision, consolidation or reduction of capital, reorganization, merger, consolidation, scheme of arrangement, split-up, spin-off or combination involving us or repurchase or exchange of our shares or other securities, or other rights to purchase shares of our securities or other similar transaction or event affects our common stock such that the compensation committee determines that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits (potential benefits) provided to grantees under the Incentive Plan, the compensation committee will make an equitable change or adjustment as it deems appropriate to the number of type of securities with respect to which awards may be granted, (ii) the number and type of securities subject to outstanding awards, (iii) the exercise price with respect to any option or SAR or, if deemed appropriate, make provision for a cash payment to the holder of such outstanding award, and (iv) the number and kind of outstanding restricted shares, or the shares underlying any other form of award. 126 Types of Awards The Incentive Plan permits the granting of any or all of the following types of awards to all grantees: • stock options, including incentive stock options, or ISOs; • stock appreciation rights, or SARs; • restricted shares; • deferred stock; • restricted stock units; • performance units and performance shares; • dividend equivalents; • bonus shares; and • other stock-based awards. Generally, awards under the Incentive Plan are granted for no consideration other than prior and future services. Awards granted under the Incentive Plan may, in the discretion of the committee, be granted alone or in addition to, in tandem with or in substitution for, any other award under the Incentive Plan; provided, however, that if an SAR is granted in tandem with an ISO, the SAR and ISO must have the same grant date and term and the exercise price of the SAR may not be less than the exercise price of the ISO. The material terms of each award will be set forth in a written award agreement between the grantee and us. Stock Options and SARs The committee is authorized to grant SARs and stock options (including incentive stock options (ISOs) except that an ISO may only be granted to an employee of ours or one of our subsidiary corporations). A stock option allows a grantee to purchase a specified number of shares of our common stock at a predetermined price per share (the “exercise price”) during a fixed period measured from the date of grant. An SAR entitles the grantee to receive the excess of the fair market value of a specified number of shares on the date of exercise over a predetermined exercise price per share. The exercise price of an option or an SAR will be determined by the committee and set forth in the applicable award agreement but the exercise price may not be less than the fair market value of a share of common stock on the grant date. The term of each option or SAR is determined by the committee and set forth in the applicable award agreement, except that the term may not exceed ten (10) years (five (5) years if the grantee holds more than 10% of the total combined voting power of all classes of our capital stock). Options may be exercised by payment of the purchase price through one or more of the following means: payment in cash (including personal check or wire transfer); delivering shares of our common stock previously owned by the grantee; or, with the approval of the compensation committee, (i) delivery of shares of our common stock acquired upon the exercise of such options, or (ii) the sale of shares acquired upon exercise of the options through a broker-dealer to whom the grantee has delivered irrevocable notice of exercise and instructions to deliver sales proceeds sufficient to pay us the exercise price. Following shareholder approval of the Incentive Plan on October 20, 2021, ISOs may be granted pursuant to the terms of the Incentive Plan. Restricted Shares The committee may award restricted shares consisting of shares of our common stock which remain subject to a risk of forfeiture and may not be disposed of by grantees until certain restrictions established by the committee lapse. The vesting conditions may be service-based (i.e., requiring continuous service for a specified period) or performance-based (i.e., requiring achievement of certain specified performance objectives) or both. A grantee receiving restricted shares will have all of the rights of a stockholder, including the right to vote the shares and the right to receive any dividends, except as otherwise provided in the applicable award agreement. Upon termination of the grantee’s affiliation with us during the restriction period (or, if applicable, upon the failure to satisfy the specified performance objectives during the restriction period), the restricted shares will be forfeited as provided in the applicable award agreement. 127 Deferred Stock and Restricted Stock Units The committee may also grant deferred stock awards and/or restricted stock unit awards. A deferred stock award is the grant of a right to receive a specified number of shares of our common stock at the end of specified deferral periods or upon the occurrence of a specified event, which satisfies the requirements of Section 409A of the Internal Revenue Code. A restricted stock unit award is the grant of a right to receive a specified number of shares of our common stock upon lapse of a specified forfeiture condition (such as completion of a specified period of service or achievement of certain specified performance objectives). If the service condition and/or specified performance objectives are not satisfied during the restriction period, the award will lapse without the issuance of the shares underlying such award. Restricted stock units and deferred stock awards carry no voting or other rights associated with stock ownership until the shares underlying the award are delivered in settlement of the award. Unless otherwise determined by the compensation committee, grantees will have the rights to receive dividend equivalents in respect of deferred stock and/or restricted stock units, which dividend equivalents shall be deemed reinvested in additional shares of deferred stock or restricted stock units, as applicable, which shall remain subject to the same forfeiture conditions applicable to the deferred stock or restricted stock units to which such dividend equivalents relate. Performance Units The committee may grant performance units, which entitle a grantee to cash or shares conditioned upon the fulfillment of certain performance conditions and other restrictions as specified by the committee and reflected in the applicable award agreement. The initial value of a performance unit will be determined by the committee at the time of grant. The committee will determine the terms and conditions of such awards, including performance and other restrictions placed on these awards, which will be reflected in the applicable award agreement. Performance Shares The committee may grant performance shares, which entitle a grantee to a certain number of shares of common stock, conditioned upon the fulfillment of certain performance conditions and other restrictions as specified by the committee and reflected in the applicable award agreement. The committee will determine the terms and conditions of such awards, including performance and other restrictions placed on these awards, which will be reflected in the applicable award agreement. Bonus Shares The committee may grant fully vested shares of our common stock as bonus shares on such terms and conditions as specified in the applicable award agreement. Dividend Equivalents The committee is authorized to grant dividend equivalents, which provide a grantee the right to receive payment equal to the dividends paid on a specified number of shares of our common stock. Dividend equivalents may be paid directly to grantees or may be deferred for later delivery under the Incentive Plan. If deferred, such dividend equivalents may be credited with interest or may be deemed to be invested in shares of our common stock, other awards under the Incentive Plan or in other property. Other Stock-Based Awards The Incentive Plan authorizes the committee to grant awards that are valued in whole or in part by reference to or otherwise based on certain other securities. The committee determines the terms and conditions of such awards, including whether awards are paid in shares or cash. 128 Business Combination, Consolidation or Similar Corporate Transaction If there is a merger or consolidation of us with or into another corporation or a sale of substantially all of our stock (a “Corporate Transaction”), and the outstanding awards are not assumed by surviving company (its parent company) or replaced with equivalent awards granted by the surviving company(its parent company),the committee will cancel any outstanding awards that are not vested and nonforfeitable as of the consummation of such Corporate Transaction (unless the committee accelerates the vesting of any such awards) and with respect to any vested and nonforfeitable awards, the committee may either (i) allow all grantees to exercise options and SARs within a reasonable period prior to the consummation of the Corporate Transaction and cancel any outstanding options or SARs that remain unexercised upon consummation of the Corporate Transaction, or (ii) cancel any or all of such outstanding awards (including options and SARs) in exchange for a payment (in cash, or in securities or other property) in an amount equal to the amount that the grantee would have received (net of the exercise price with respect to any options or SARs) if the vested awards were settled or distributed or such vested options and SARs were exercised immediately prior to the consummation of the Corporate Transaction. If an exercise price of an option or SAR exceeds the fair market value of our common stock and the option or SAR is not assumed or replaced by the surviving company(its parent company),such options and SARs will be cancelled without any payment to the grantee. Amendment to and Termination of the Incentive Plan The Incentive Plan may be amended, altered, suspended, discontinued or terminated by our board of directors without further stockholder approval, unless such approval is required by law or regulation or under the rules of any stock exchange or automated quotation system on which our common stock is then listed or quoted. Thus, stockholder approval will not necessarily be required for amendments which might increase the cost of the Incentive Plan or broaden eligibility. Stockholder approval will not be deemed to be required under laws or regulations that condition favorable treatment of grantees on such approval, although our board of directors may, in its discretion, seek stockholder approval in any circumstance in which it deems such approval advisable. In addition, subject to the terms of the Incentive Plan, no amendment or termination of the Incentive Plan may materially and adversely affect the right of a grantee under any award granted under the Incentive Plan. Unless earlier terminated by our board of directors, the Incentive Plan will terminate when no shares remain reserved and available for issuance or, if earlier, on the tenth anniversary of the effective date of the Incentive Plan. 129 SAB Biotherapeutics 2021 Employee Stock Purchase Plan The SAB Biotherapeutics 2021 Employee Stock Purchase Plan, (the “ESPP”) was adopted in connection with, and became effective at the closing of, the Business Combination. The ESPP provides eligible employees an opportunity to purchase shares of common stock at a discount through accumulated contributions of their earned compensation. The ESPP’s initial share reserve is one million shares of SAB Biotherapeutics common stock. Offering periods will not commence under the ESPP until determined by the board of directors or compensation committee. Summary of the Employee Stock Purchase Plan Administration The ESPP will be administered by the board of directors, or a committee appointed by the board of directors, which may be the compensation committee. The board of directors or committee administering the ESPP (the "Administrator") has authority to construe and interpret the ESPP and to establish rules and regulations for the administration of the ESPP. Eligibility Eligible employees of the Company or a participating subsidiary may participate in the ESPP. One is an eligible employee for an accumulation period if he or she is an employee of the Company or a participating subsidiary both on the date determined by the ESPP administrator that enrollment forms must be received for an accumulation period and on the first day of the accumulation period. Notwithstanding the preceding sentences, an employee is not eligible to participate in the ESPP if on the first day of the accumulation period (1) such employee is a member of a collective bargaining unit whose benefits were the subject of good faith bargaining; (2) such employee is customarily employed 20 or less hours per week or five months or less per year; or (3) such employee is an employee of a participating subsidiary who is a resident of a foreign jurisdiction and (i) participation is prohibited under the laws of such foreign jurisdiction or (ii) compliance with the laws of such foreign jurisdiction would violate Section 423 of the Code. An employee is also not eligible to participate if immediately after any purchase of shares under the ESPP, the employee would own capital stock of the Company and/or hold outstanding options to purchase such stock constituting five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any subsidiary of the Company. As of December 31, 2021, the Company had approximately 139 employees that would be eligible to participate in the ESPP. Shares Available for Issuance As noted above, the maximum aggregate number of shares of Company stock that may be issued under the ESPP is one million shares. Enrollment Dates, Accumulation Periods and Purchase Dates The accumulation periods under the ESPP will generally be a specified one-year period, or such other period, not to exceed twenty-seven (27) months, as determined by the Administrator. The initial accumulation period is expected to commence on or about March 2022. The first trading day of each accumulation period is the enrollment date, which is the date as of which eligible employees are granted contractual rights to purchase shares of Company stock under the ESPP. Payroll deductions may be made during the accumulation period by eligible employee selecting to participate as described below. The last trading day of each accumulation period will be the Company stock purchase date (unless the Administrator selects a different date) and on such date any contractual rights remaining outstanding will be deemed to be exercised and shares of Company stock will be purchased, as described below. 130 Participation in the ESPP An eligible employee may become a participant in the ESPP by submitting an enrollment form, and payroll deductions for such employee will begin as soon as administratively feasible after such form is received in good order, subject to compliance with such policies, rules and procedures as we may establish in connection therewith. As of each purchase date (which is the last trading day of an accumulation period as stated above), an employee’s payroll deductions made during the accumulation period and not withdrawn by the employee or otherwise paid to the employee are used to buy shares of Company stock. The per share purchase price on the purchase date is 85% of the lower of (1) the fair market value of a share of Company stock on the purchase date, or (2) the fair market value of a share of Company stock on the first trading day of the accumulation period. An employee will not be permitted to purchase more than 25,000 shares of Company stock on any purchase date, or such lower maximum number as may be determined by the Administrator. An employee’s right to purchase shares under the ESPP in any calendar year cannot exceed $25,000, as measured by the fair market value of such shares (determined for each accumulation period as of the first trading day of the accumulation period). An employee can invest any amount from 1% to 15% of his or her base earnings in Company stock through payroll deductions under the ESPP. Payroll deductions are credited to recordkeeping accounts. No earnings are credited to the accounts. Withdrawal from the ESPP, Cessation of Payroll Deductions, Mandatory Cessation of Participation An employee may withdraw from the ESPP in full (but not in part) during any accumulation period by delivering a notice of withdrawal to us (in a manner prescribed by the Administrator) at any time prior to the first day of the last calendar month immediately preceding the purchase date for such accumulation period, or at such shorter time in advance of the purchase date as the Administrator may permit. If notice of withdrawal is timely received, all funds then accumulated in the employee’s account will not be used to purchase shares, but will instead be distributed to the employee as soon as administratively practical, and the employee’s payroll deductions will cease as soon as administratively practical. An employee also may cease payroll deductions as of the last day of any month during an accumulation period by delivering a notice of cessation to us at the time and in the manner prescribed by the Administrator. Unless the employee also withdraws from the ESPP as described in the preceding paragraph, the employee’s accumulated payroll deductions will be applied to purchase shares of Company stock on the purchase date as described above. Participation in the ESPP immediately terminates when an employee ceases to be an eligible employee for any reason, including voluntary or involuntary termination of employment. Upon the termination of an employee’s participation in the ESPP, all accumulated payroll deductions of the employee will be returned to the employee. Amendment and Termination The board of directors or the compensation committee may amend or alter any provision of the ESPP and may terminate the ESPP at any time. Under certain circumstances, an amendment to the ESPP may require the approval of our stockholders. In addition, if the ESPP is amended to change the aggregate number of shares issuable thereunder or the provisions regarding eligible employees, certain tax advantages under the Code as discussed below (see “Certain Federal Income Tax Consequences Relating to the ESPP”) will only continue if we obtain stockholder approval of such amendment. Certain amendments to the ESPP may be made by the Administrator without stockholder approval. In the event of any Company reorganization, recapitalization, stock split, reverse stock split, stock dividend, combination of shares, merger, consolidation, acquisition of property or shares, separation, asset spin-off, stock rights offering, liquidation or other similar change in the capital structure of the Company, the shares subject to an employee’s election to purchase Company stock during an accumulation period will be adjusted and the aggregate number and kind of shares available under the ESPP and the purchase price of shares will also be adjusted, in each case to the extent deemed appropriate by the Administrator. Generally, if a dissolution or liquidation of the Company occurs during an accumulation period, any rights an employee has to acquire Company stock under the ESPP will be terminated, but an employee will have the right to acquire Company stock before the dissolution or liquidation. 131 Certain Federal Income Tax Consequences Relating to the ESPP The following summary of the income tax consequences of the ESPP is based on current provisions of the Code and regulations thereunder. The summary does not address tax rates or state or local income taxes or taxes in jurisdictions other than the United States, nor does it address employment tax. Enrollment or Purchase of Company Stock under the ESPP . No federal income tax consequences arise at the time of an employee’s enrollment in the ESPP or upon the purchase of Company stock under the ESPP. However, as discussed below, if an employee disposes of Company stock acquired under the ESPP, such employee will have the federal income tax consequences described below in the year such employee disposes of the stock. Amounts withheld by payroll deduction are subject to federal income tax as though those amounts had been paid in cash. Whenever an employee transfers any shares of Company stock in a manner which may constitute a disposition, such employee must promptly advise the Secretary of the Company of the facts concerning that transfer. Early Dispositions . If an employee disposes of Company stock purchased under the ESPP within two years after the first trading day of an accumulation period or within one year after the shares of Company stock are transferred to such employee or to an account in such employee’s name (the “Tax Holding Period”), such employee will recognize compensation income in the year of disposition in an amount equal to the excess of (A) the lesser of the fair market value of the Company stock on the purchase date or the proceeds from the sale or exchange of the shares over (B) the price such employee paid for the Company stock. The Company must report such compensation as taxable ordinary income to the Internal Revenue Service on such employee’s annual Form W-2.The amount, if any, that is taxable as ordinary income is added to the purchase price and becomes part of the cost basis for that Company stock for federal income tax purposes. If the disposition of the Company stock involves a sale or exchange, such employee generally may also realize a short-term capital gain or loss equal to the difference between such employee’s cost basis (calculated pursuant to the preceding sentence)and the proceeds from the sale or exchange of the shares. Later Dispositions . If an employee disposes of Company stock purchased under the ESPP on a date after the Tax Holding Period, or if such employee dies at any time while owning Company stock, such employee (such employee’s estate) will have included in such employee’s compensation as taxable ordinary income in the year of disposition or death, an amount equal to the lesser of (1) the excess of the fair market value of the Company stock on the first trading day of the accumulation period over the purchase price paid by such employee (the employee’s estate) for the shares, or (2) the excess of the fair market value of the Company stock on the date of disposition or death over the purchase price paid by such employee (the estate) for the shares. The amount which is taxable as ordinary income is added to the cost basis of that Company stock for federal income tax purposes. The cost basis is therefore the sum of the purchase price of the Company stock and the ordinary income recognized from the formula above. If the disposition of the Company stock involves a sale or exchange, such employee will also realize a long-term capital gain or loss equal to the difference between such employee’s cost basis (calculated pursuant to the preceding sentence) and the proceeds from the sale or exchange of the shares. The Company is not entitled to a deduction for amounts taxed as ordinary income or capital gain to an employee except to the extent of ordinary income recognized upon a sale or disposition during the Tax Holding Period (an early disposition). Indemnification Agreements We have entered into indemnification agreements with each of our directors and executive officers. For more information, see " Certain Relationships and Related Transactions, and Director Independence - Indemnification Agreements." Agreements Related to the Business Combination We have entered into certain agreements with certain of our named executive officers and directors in connection with the Business Combination. For more information, see (a) " Certain Relationships and Related Transactions, and Director Independence - Indemnification Agreements" and " - Amended and Restated Registration Rights Agreement," and (b) "Certain Relationships and Related Transactions, and Director Independence - Indemnification Agreements - Pre-Business Combination Related Party Transactions – BCYP." 132 Potential Payments upon Termination or Change in Control The table below reflects, as applicable, amounts payable to our current named executive officers in connection with a termination by the Company without cause. For purposes of our agreements with our named executive officers, "cause" means, in the judgement of the Company: (i) executive engages in any act or omission which is in bad faith and to the detriment of the Company; (ii) executive willfully and materially violates any of the Company’s then-current policies and procedures; (iii) executive’s willful failure to perform his or her duties under the employment agreement; (iv) executive exhibits unfitness for service, dishonesty, habitual neglect, persistent and serious deficiencies in performance, or incompetence; (v) executive is convicted of, or there is an entry of guilty (or a nolo contender) plea by executive to, a crime (other than a minor traffic violation); (vi) executive materially breaches provision of the agreement related to nondisclosure, assignment of inventions and/or non-solicitation; or (vii) executive refuses or fails to act on any reasonable or lawful directive or order from the Board or executive's supervisor. A summary of the potential payments that each of our current named executive officers would have received upon the occurrence of these events, assuming that each triggering event occurred on December 31, 2021, is set forth below. Salary Equity Perquisites / Benefits Other Total Name and Principal Position ($) ($) ($) ($) ($) Eddie J. Sullivan, PhD. 377,200 — — — 377,200 President and Chief Executive Officer Samuel J. Reich 350,000 — — — 350,000 Executive Chairman of the Board of Directors Melissa Ullerich 275,000 — — — 275,000 EVP, Chief of Corporate Communications, Investor Relations Officer 133 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth information regarding the beneficial ownership of our common stock as of February 28, 2022, by: • each person known to be the beneficial owner of more than 5% of our outstanding common stock; • each of our executive officers and directors; and • all of our executive officers and directors as a group. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the individual or entity has the right to acquire, such as through the exercise of stock options, within 60 days. Shares subject to options that are currently exercisable or exercisable within 60 days are considered outstanding and beneficially owned by the person holding such options for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the Company believes that the persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Unless otherwise noted, the business address of each of the directors and executive officers of the Company is 2100 East 54th Street North, Sioux Falls, SD 57104. The percentage of beneficial ownership of the Company is calculated based on 42,955,121 shares of common stock outstanding and does not take into account: (i) The issuance of shares upon exercise of warrants to purchase 5,958,600 shares of common stock currently outstanding (ii) The exercise of options to purchase 1,211,676 shares of common stock currently outstanding. Beneficial Owner Number of Shares Beneficially Owned Percentage of Common Stock Beneficially Owned Five Percent Stockholders Christine Hamilton, MBA (1) 10,596,655 24.67 % Eddie J. Sullivan, PhD (2) 5,705,113 13.28 % Big Cypress Holdings LLC (3) 3,257,425 7.58 % Executive Officers and Directors Samuel J. Reich (3) 3,257,425 7.58 % Christine Hamilton, MBA (1) 10,596,655 24.67 % Eddie J. Sullivan, PhD (2) 5,705,113 13.28 % Mervyn Turner, PhD. (4) 29,080 0.07 % Jeffrey G. Spragens (5) 13,000 0.03 % William Polvino, MD (6) 58,160 0.14 % David Link, MBA (7) 78,322 0.18 % Melissa Ullerich (8) 137,840 0.32 % All current executive officers and directors as a group (13) 20,577,230 46.27 % (1) Consists of (i) 4,983,090 shares of common stock held by Mrs. Hamilton; (ii) 91,261 shares of common stock held as a co-owner by Mrs. Hamilton with her spouse, Dr. Edward Hamilton; (iii) 4,911,822 shares of common stock held by Mrs. Hamilton's spouse, Dr. Edward Hamilton; (iv) 25,000 shares held by Christiansen Investments; (v) 120,197 shares of common stock underlying stock options held by Mrs. Hamilton exercisable within 60 days of February 28, 2022; and (vi) 465,285 shares of common stock underlying stock options held by her spouse, Dr. Edward Hamilton, exercisable within 60 days of February 28, 2022. Mrs. Hamilton is a control person with voting and dispositive power over shares of Christiansen Investments and is deemed to have beneficial ownership of the shares held by Christiansen Investments. Mrs. Hamilton disclaims beneficial ownership of such securities except to the extent of her pecuniary interest therein, directly or indirectly. (2) Consists of (i) 5,216,564 shares of common stock held by Dr. Sullivan; and (ii) 488,549 shares of common stock underlying stock options held by Dr. Sullivan exercisable within 60 days of February 28, 2022. 134 (3) Consists of (i) 1,000 shares of common stock acquired jointly by the Mr. Reich and Mr. Reich's spouse in open market transactions; (ii) 598,580 of shares of common stock held by Big Cypress Holdings, LLC that are subject to vesting during a period of up to five years after October 22, 2021, which is the closing date of the Company's Business Combination; (iii) and 2,449,245 shares of common stock held by Big Cypress Holdings, LLC; and (iv) 208,600 shares of common stock underlying warrants that are currently exercisable. Mr. Reich is a managing member with voting and dispositive power over shares of Big Cypress Holdings, LLC and is deemed to have beneficial ownership of the shares held by Big Cypress Holdings, LLC. Mr. Reich disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein, directly or indirectly. (4) Consists of 29,080 shares of common stock underlying stock options held by Dr. Turner exercisable within 60 days of February 28, 2022. (5) Consists of 13,000 shares of common stock acquired by the Mr. Spragens in open market transactions. (6) Consists of 58,160 shares of common stock underlying stock options held by Dr. Polvino exercisable within 60 days of February 28, 2022. (7) Consists of (i) 15,820 shares of common stock held by Mr. Link; (ii) 12,097 of shares of common stock held by Iron Horse Investments, LLC; and (iii) 50,405 shares of common stock underlying stock options held by Mr. Link exercisable within 60 days of February 28, 2022. Mr. Link is a control person with voting and dispositive power over shares of Iron Horse Investments, LLC and is deemed to have beneficial ownership of the shares held by Iron Horse Investments, LLC. Mr. Link disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein, directly or indirectly. (8) Consists of 137,840 shares of common stock underlying stock options held by Ms. Ullerich exercisable within 60 days of February 28, 2022. 135 Item 13. Certain Relationships and Related Transactions, and Director Independence. The following includes a summary of transactions since January 1, 2021 to which we have been a party, in which the amount involved in the transaction exceeded $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described under “ Executive Compensation .” Amended and Restated Registration Rights Agreement In connection with the completion of the Business Combination, we entered into an amended and restated registration rights agreement with the Sponsor, certain of our stockholders, certain stockholders of Legacy SAB and Ladenburg Thalmann & Co. Inc. (Ladenburg), pursuant to which, among other things, Sponsor, certain of our stockholders and certain stockholders of Legacy SAB (i) agreed not to effect any sale or distribution of our common stock held by any of them during the specified lock-up period of 180 days after the closing of the Business Combination and (ii) were granted certain registration rights with respect to their shares of our common stock. We also agreed that Edward Hamilton will be entitled to have a board observer attend meetings of our board of directors (and any committee thereof) for so long as certain of his affiliates continue to own at least 75% of the shares held by such affiliates on the closing date of the Business Combination. The amended and restated registration rights agreement will terminate on the earlier of (i) the date that all registrable securities covered by the amended and restated registration rights agreement have sold pursuant to a registration statement effected pursuant to the terms of the amended and restated registration rights agreement or (ii) the date that all registrable securities covered by the amended and restated registration rights agreement are permitted to be sold under Rule 144 promulgated by the SEC under the Securities Act. Indemnification Agreements We have entered into indemnification agreements with each of our directors and executive officers. Each indemnification agreement provides for indemnification and advancements by us of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to us or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law. 136 Sponsor Support Agreement Concurrently with the execution of the Business Combination Agreement, we entered into a sponsor support agreement with Sponsor, Ladenburg and certain of our stockholders, pursuant to which Sponsor, Ladenburg and certain of our stockholders agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby (including the Business Combination) and against any competing transaction, (ii) waive any anti-dilution or similar protection that could be triggered in connection with the Business Combination, (iii) be bound by certain transfer restrictions with respect to our shares of common stock prior to the closing of the Business Combination and (iv) agree to certain forfeiture provisions with respect to up to 598,580 of the shares owned by them (Restricted Shares) during a period of up to five years from the closing of the Business Combination (Vesting Period) as follows: • 149,645 of the Restricted Shares will become fully vested and unrestricted if, within the Vesting Period, the volume weighted share price of the Company’s common stock equals or exceeds $15.00 during at least 20 trading days within a 30-day trading period; • 149,645 of the Restricted Shares will become fully vested and unrestricted if, within the Vesting Period, the volume weighted share price of the Company’s common stock equals or exceeds $20.00 during at least 20 trading days within a 30-day trading period; • 149,645 of the Restricted Shares will become fully vested and unrestricted if, within the Vesting Period, the volume weighted share price of the Company’s common stock equals or exceeds $25.00 during at least 20 trading days within a 30-day trading period; and • 149,645 of the Restricted Shares will become fully vested and unrestricted if, within the Vesting Period, the volume weighted share price of the Company’s common stock equals or exceeds $30.00 during at least 20 trading days within a 30-day trading period; Each tranche of Restricted Shares will also become fully vested and unrestricted in the event of a change in control of the Company during the Vesting Period that results in the holders of the Company’s common stock receiving a per-share aggregate consideration equal to or in excess of the applicable tranche of Restricted Shares. The sponsor support agreement terminated upon the closing of the Business Combination, other than with respect to the Restricted Shares, which will continue to become vested and unrestricted as described above. 137 Pre-Business Combination Related Party Transactions – BCYP Founder Shares On January 3, 2021, our legal predecessor, BCYP, effected a stock dividend of 1/3 of a share of common stock for every share of common stock outstanding, resulting in an aggregate of 2,875,000 founder shares outstanding (including up to 375,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full or in part). As a result of the underwriters’ election to fully exercise their over-allotment option on January 14, 2021, the 375,000 shares were no longer subject to forfeiture. As discussed further below, on January 4, 2021, Sponsor forfeited 28,750 founder shares to BCYP and Ladenburg and certain of its employees purchased an aggregate of 28,750 shares from BCYP at an average purchase price of approximately $0.008 per share, for an aggregate purchase price of $230. Private Placement Simultaneously with the closing of our initial public offering of units, consisting of one share of common stock and one-half of a detachable warrant (the "Public Warrants") to purchase shares of common stock, on January 14, 2021, Sponsor purchased an aggregate of 417,200 private placement units, at a price of $10.00 per private placement unit, for an aggregate purchase price of $4,172,000, in a private placement. Each private placement unit was identical to the units sold in our legal predecessor's initial public offering, except that the detachable private warrants (the "Private Placement Warrants") are exercisable on a cashless so long as they are held by the initial purchasers or their permitted transferees. Promissory Note On November 19, 2020, Sponsor agreed to loan BCYP an aggregate of up to $250,000 to cover expenses related to the initial public offering pursuant to a promissory note (the "Sponsor Note"). This loan was non-interest bearing and payable on the earlier of December 31, 2020 or the completion of the initial public offering. Sponsor paid an aggregate of approximately $150,000 to cover for expenses on our behalf under the Note. On January 14, 2021, we repaid the Sponsor Note in full. Administrative Services BCYP agreed to pay an affiliate of Sponsor a monthly fee of an aggregate of $10,000 for office space, utilities and secretarial and administrative support. Upon completion of the Business Combination, the Company ceased paying these monthly fees. 138 Policies and Procedures for Transactions with Related Parties The Company has adopted a written Related Party Transaction Policy that set forth its procedures for the identification, review, consideration and approval or ratification of related person transactions. A related person includes directors, executive officers, beneficial owners of 5% or more of any class of the Company’s voting securities, immediate family members of any of the foregoing persons, and any entities in which any of the foregoing is an executive officer or is an owner of 5% or more ownership interest. Under the Related Party Transaction Policy, if a transaction involving an amount in excess of $120,000 has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, information regarding the related person transaction must be reviewed and approved by the Company’s audit committee In considering related person transactions, the Company’s audit committee will take into account the relevant available facts and circumstances including, but not limited to: • the related person’s interest in the related person transaction; • the approximate dollar value of the amount involved in the related person transaction; • the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss; • whether the transaction was undertaken in the ordinary course of business of the Company; • whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party; • the purpose of, and the potential benefits to the Company of, the transaction; and • any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction. The Related Party Transaction Policy requires that, in determining whether to approve, ratify or reject a related person transaction, the audit committee must review all relevant information available to it about such transaction, and that it may approve or ratify the related person transaction only if it determines that, under all of the circumstances, the transaction is in, or is not inconsistent with, the best interests of the Company. 139 Item 14. Principal Accounting Fees and Services. The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2021 and 2020 by Mayer Hoffman McCann P.C. (“MHM”), the Company’s independent registered public accounting firm. Substantially all of MHM’s personnel, who work under the control of MHM shareholders, are employees of wholly-owned subsidiaries of CBIZ, Inc., which provides personnel and various services to MHM in an alternative practice structure. (US Dollars) 2021 2020 Audit fees $ 569,067 $ 68,335 Audit-related fees — — Tax fees — — All other fees — — Total $ 569,067 $ 68,335 Audit fees for the fiscal years ended December 31, 2021 and 2020 rendered by MHM relate to professional services rendered for the audits of our financial statements, quarterly reviews, issuance of consents, the Business Combination and review of documents filed with the SEC. Aggregate fees for professional services rendered for the Company by Marcum, its former independent registered public accounting firm, as of or for the fiscal years ended December 31, 2021 and 2020 were: (US Dollars) 2021 2020 Audit fees $ — $ 40,000 Audit-related fees 143,685 — Tax fees — — All other fees — — Total $ 143,685 $ 40,000 Audit fees for the fiscal years ended December 31, 2021 and 2020 rendered by Marcum relate to professional services rendered for the audits of our predecessor's financial statements, quarterly reviews, issuance of consents, the Business Combination and review of documents filed with the SEC. Pre-Approval Policies and Procedures The Audit Committee has adopted a policy that sets forth the procedures and conditions pursuant to which audit and non-audit services proposed to be performed by the independent auditor may be pre-approved. The policy generally provides that we will not engage MHM to render any audit, audit-related, tax or permissible non-audit service unless the service is either (i) explicitly approved by the Audit Committee (“specific pre-approval”) or (ii) entered into pursuant to the pre-approval policies and procedures described in the policy (“general pre-approval”). Unless a type of service to be provided by MHM has received general pre-approval under the policy, it requires specific pre-approval by the Audit Committee or by a designated member of the Audit Committee to whom the committee has delegated the authority to grant pre-approvals. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval. For both types of pre-approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence. 140 PART IV Item 15. Exhibits, Financial Statement Schedules. (1) For a list of the financial statements included herein, see Index to the Consolidated Financial Statements on page F-1 of this Form 10-K, incorporated into this Item by reference. (2) Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto. (3) Exhibits: Exhibit Number Description Schedule/ Form File No. Exhibit Filing Date 2.1+ Agreement and Plan of Merger, dated as of June 21, 2021, by and among Big Cypress Acquisition Corp., Big Cypress Merger Sub Inc, SAB Biotherapeutics, Inc., and Shareholder Representative Services LLC as the Stockholders’ Representative 8-K 001-39871 2.1+ October 28, 2021 2.2+ First Amendment to Agreement and Plan of Merger, dated August 12, 2021, by and among Big Cypress Acquisition Corp. and SAB Biotherapeutics, Inc. 8-K 001-39871 2.2+ October 28, 2021 3.1 Amended and Restated Certificate of Incorporation. 8-K 001-39871 3.1 October 28, 2021 3.2 Amended and Restated Bylaws. 8-K 001-39871 3.2 October 28, 2021 4.1 Specimen common stock Certificate of Registrant. S-1/A 333-258869 4.2 January 4, 2021 4.2 Specimen Warrant Certificate of Registrant (incorporated by reference to Exhibit 4.3 of Form S-1/A.) S-1/A 333-258869 4.3 January 4, 2021 4.3 Form of Warrant Agreement between Registrant and Continental Stock Transfer & Trust Company. S-1/A 333-258869 4.4 January 4, 2021 4.4* Description of Registrant’s Securities 10.1 Amended and Restated Registration Rights Agreement. 8-K 001-39871 10.1 October 28, 2021 10.2¥ Employment Agreement, dated March 1, 2021, by and between SAB Biotherapeutics, Inc. and Eddie J. Sullivan. 8-K 001-39871 10.2¥ October 28, 2021 10.3¥* Employment Agreement, dated March 1, 2021, by and between SAB Biotherapeutics, Inc. and Rick Finnegan. 10.4¥* Employment Agreement, dated June 6, 2021, by and between SAB Biotherapeutics, Inc. and Melissa Ullerich. 10.5 Form of Indemnification Agreement. 8-K 001-39871 10.6 October 28, 2021 10.6¥ SAB Biotherapeutics, Inc. 2021 Omnibus Equity Incentive Plan. 8-K 001-39871 10.7 ¥ October 28, 2021 10.7¥ SAB Biotherapeutics, Inc. 2021 Employee Stock Purchase Plan. 8-K 001-39871 10.8 ¥ October 28, 2021 10.8 Form of Securities Subscription Agreement, dated November 12, 2020, between BCYP and Big Cypress Holdings LLC. S-4 333-258869 10.3 September 22, 2021 10.9 Securities Purchase Agreement, dated December 7, 2020, between BCYP and Ladenburg Thalmann & Co. Inc. and certain of its employees. S-4 333-258869 10.4 September 22, 2021 10.10 Placement Unit Subscription Agreement dated January 11, 2021 between the Company and Big Cypress Holdings LLC. S-4 333-258869 10.5 September 22, 2021 141 10.11 BCYP Stockholders Support Agreement. S-4 333-258869 10.7 September 22, 2021 10.12 SAB Stockholders Support Agreement. S-4 333-258869 10.8 September 22, 2021 10.13* Third Amendment to Amended and Restated Lease Agreement 16.1 Letter to SEC from Marcum LLP 8-K 001-39871 16.1 October 28, 2021 21.1 List of Subsidiaries 8-K 001-39871 21.1 October 28, 2021 23.1* Consent of Mayer Hoffman McCann P.C. 24.1* Power of Attorney (included on a signature page of the initial filing of this Annual Report) 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.1* Press Release dated March 29, 2022 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. + Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. ¥ Denotes management contract or any compensatory plan, contract or arrangement. Item 16. Form 10-K Summary None. 142 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . SAB BIOTHERAPEUTICS, INC. Date: March 29, 2022 By: /s/ Eddie J. Sullivan Eddie J. Sullivan Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Eddie J. Sullivan Chief Executive Officer March 29, 2022 Eddie J. Sullivan (Principal Executive Officer) /s/ Russell Beyer Chief Financial Officer March 29, 2022 Russell Beyer (Principal Financial Officer and Principal Accounting Officer) /s/ Samuel J. Reich Director and Executive Chairman March 29, 2022 Samuel J. Reich /s/ Christine Hamilton, MBA Director March 29, 2022 Christine Hamilton, MBA /s/ David Link Director March 29, 2022 David Link /s/ William Polvino, MD, PhD Director March 29, 2022 William Polvino, MD, PhD /s/ Jeffrey G. Spragens Director March 29, 2022 Jeffrey G. Spragens /s/ Mervyn Turner, PhD Director March 29, 2022 Mervyn Turner, PhD 1 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F- 2 Consolidated Balance Sheets as of December 31, 2021 and 2020 F- 3 Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 F- 4 Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2021 and 2020 F- 5 Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020 F- 6 Notes to Consolidated Financial Statements F- 7 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of SAB Biotherapeutics, Inc. and Subsidiaries Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of SAB Biotherapeutics, Inc. and Subsidiaries (“Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in redeemable preferred stock and stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company's auditor since 2019. /s/ Mayer Hoffman McCann P.C. San Diego, California March 29, 2022 F- 2 SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2021 December 31, 2020 Assets Current assets Cash and cash equivalents $ 33,206,712 $ 12,610,383 Restricted cash 6,338,306 — Accounts receivable, net 8,010,708 20,569,497 Prepaid expenses 864,513 1,275,134 Total current assets 48,420,239 34,455,014 Operating lease right-of-use assets 2,615,204 3,053,022 Financing lease right-of-use assets 4,019,322 4,184,427 Equipment, net 24,314,455 14,845,470 Total assets $ 79,369,220 $ 56,537,933 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 4,458,525 $ 7,382,361 Forward share purchase liability 6,338,306 — Notes payable – current portion 25,013 538,731 Operating lease liabilities, current portion 1,142,413 924,265 Finance lease liabilities, current portion 161,050 194,717 Due to related party 2,367 16,778 Deferred grant income 100,000 100,000 Accrued expenses and other current liabilities 12,455,888 1,904,878 Total current liabilities 24,683,562 11,061,730 Operating lease liabilities, noncurrent 1,653,185 2,372,777 Finance lease liabilities, noncurrent 3,762,430 3,923,554 Warrant liabilities 10,720,130 — Notes payable, noncurrent — 172,037 Total liabilities 40,819,307 17,530,098 Commitments and contingencies (Note 17) Stockholders’ equity Preferred stock; $ 0.0001 par value; 10,000,000 shares authorized, 0 shares issued and and outstanding at December 31, 2021 and 2020 — — Common stock; $ 0.0001 par value; 490,000,000 shares authorized at December 31, 2021 and 2020; 43,487,279 and 25,973,406 shares issued and outstanding at December 31, 2021 and 2020, respectively 4,349 2,598 Additional paid-in capital 67,674,515 50,989,657 Accumulated deficit ( 29,128,951 ) ( 11,984,420 ) Total stockholders’ equity 38,549,913 39,007,835 Total liabilities and stockholders’ equity $ 79,369,220 $ 56,537,933 See accompanying notes to the consolidated financial statements F- 3 SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Statements of Operations Year Ended December 31, 2021 Year Ended December 31, 2020 Revenue Grant revenue $ 60,876,078 $ 55,237,759 Total revenue 60,876,078 55,237,759 Operating expenses Research and development 57,183,589 27,908,659 General and administrative 17,085,692 6,772,303 Total operating expenses 74,269,281 34,680,962 (Loss) income from operations ( 13,393,203 ) 20,556,797 Changes in fair value of warrant liabilities ( 4,151,068 ) — Gain on debt extinguishment of Paycheck Protection Program SBA Loan 665,596 — Other income 5,488 3,996 Interest expense ( 294,459 ) ( 469,151 ) Interest income 23,115 26,131 Net (loss) income $ ( 17,144,531 ) $ 20,117,773 Earnings (loss) per common share attributable to the Company’s shareholders Basic (loss) earnings per common share $ ( 0.63 ) $ 0.79 Diluted (loss) earnings per common share $ ( 0.63 ) $ 0.74 Weighted-average common shares outstanding – basic 27,339,180 25,391,084 Weighted-average common shares outstanding – diluted 27,339,180 27,011,482 See accompanying notes to the consolidated financial statements. F- 4 SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Statements of Changes In Redeemable Preferred Stock and Stockholders’ Equity (Deficit) For the years ended December 31, 2021 and 2020 Redeemable Preferred Stock Stockholders’ Equity (Deficit) Series A-2A Redeemable Preferred Stock Series A Preferred Stock Series A-1 Preferred Stock Series A-2 Preferred Stock Series B Preferred Stock Common stock Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity (Deficit) Balance at December 31, 2019 (as previously reported) 3,333,333 $ 9,999,999 6,615,000 $ 662 2,525,800 $ 253 4,039,963 $ 404 1,236,786 $ 124 35,216,000 $ 3,522 $ 29,791,662 $ ( 32,102,193 ) $ ( 2,305,566 ) Retrospective application of reverse recapitalization ( 3,333,333 ) ( 9,999,999 ) ( 6,615,000 ) ( 662 ) ( 2,525,800 ) ( 253 ) ( 4,039,963 ) ( 404 ) ( 1,236,786 ) ( 124 ) ( 10,570,449 ) ( 1,057 ) 10,002,499 — 9,999,999 Balance at December 31, 2019, after effect of Business Combination — $ — — $ — — $ — — $ — — $ — 24,645,551 $ 2,465 $ 39,794,161 $ ( 32,102,193 ) $ 7,694,433 Issuance of stock in private offerings, net of issuance cost of $ 87,949 — — — — — — — — — — 1,327,855 133 9,900,073 — 9,900,206 Stock-based compensation — — — — — — — — — — — — 1,295,423 — 1,295,423 Net income — — — — — — — — — — — — — 20,117,773 20,117,773 Balance at December 31, 2020 — $ — — $ — — $ — — $ — — $ — 25,973,406 $ 2,598 $ 50,989,657 $ ( 11,984,420 ) $ 39,007,835 Effect of Business Combination and recapitalization, net of redemptions and issuance costs of $ 3,294,096 — — — — — — — — — — 7,009,436 701 7,603,133 — 7,603,834 Issuance of restricted stock, subject to forfeiture — — — — — — — — — — 10,491,937 1,049 — — 1,049 Forward Share Purchase Agreement, partial settlement — — — — — — — — — — — — 6,760,294 — 6,760,294 Stock-based compensation — — — — — — — — — — — — 2,314,682 — 2,314,682 Issuance of common stock for exercise of stock options — — — — — — — — — — 12,500 1 6,749 — 6,750 Net loss — — — — — — — — — — — — — ( 17,144,531 ) ( 17,144,531 ) Balance at December 31, 2021 — $ — — $ — — $ — — $ — — $ — 43,487,279 $ 4,349 $ 67,674,515 $ ( 29,128,951 ) $ 38,549,913 See accompanying notes to the consolidated financial statements. F- 5 SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Statements of Cash Flows Year ended December 31, 2021 Year ended December 31, 2020 Cash flows from operating activities: Net (loss) income $ ( 17,144,531 ) $ 20,117,773 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Gain on debt extinguishment of Paycheck Protection Program SBA Loan ( 665,596 ) — Depreciation and amortization 1,488,614 383,142 Amortization of right-of-use assets 164,983 165,036 Stock-based compensation expense 2,314,682 1,295,423 Gain on sale of equipment ( 5,488 ) ( 2,252 ) Changes in fair value of warrant liabilities 4,151,068 — Changes in operating assets and liabilities Accounts receivable 12,558,790 ( 17,750,762 ) Prepaid expenses 513,363 ( 1,151,130 ) Right-of-use assets – operating lease ( 63,626 ) 215,122 Accounts payable ( 2,935,521 ) 5,211,593 Deferred income — 100,000 Due to related party ( 2,727 ) 10,528 Accrued expense and other current liabilities 3,384,573 1,410,322 Net cash provided by operating activities 3,758,584 10,004,795 Cash flows from investing activities: Proceeds from the sale of equipment — 9,000 Purchases of equipment ( 10,943,657 ) ( 12,731,702 ) Net cash used in investing activities ( 10,943,657 ) ( 12,722,702 ) Cash flows from financing activities: Proceeds from Business Combination, net of transaction costs 34,340,225 — Proceeds from the sale of stock, net of issuance costs — 9,900,206 Proceeds from Paycheck Protection Program SBA Loan — 661,612 Payments on related party notes payable — ( 1,364,644 ) Payments of notes payable ( 24,143 ) ( 32,506 ) Principal payments on finance leases ( 203,124 ) ( 182,347 ) Proceeds from exercise of stock options 6,750 — Net cash provided by financing activities 34,119,708 8,982,321 Net increase in cash, cash equivalents, and restricted cash 26,934,635 6,264,414 Cash, cash equivalents, and restricted cash Beginning of year 12,610,383 6,345,969 End of year $ 39,545,018 $ 12,610,383 Supplemental disclosures: Cash paid for interest $ 294,459 $ 469,151 Supplemental information on non-cash investing and finance activities: Right-of-use assets obtained in exchange for operating lease liabilities $ 505,187 $ 1,773,135 Warrant liabilities assumed related to the Business Combination $ 6,569,062 $ — Liabilities assumed related to the Forward Share Purchase Agreement $ 6,338,306 $ — Financing fee liabilities assumed related to the Business Combination included in accrued expense and other current liabilities $ 3,100,000 $ — Unpaid financing fees included in accrued expense and other current liabilities $ 2,000,000 $ — See accompanying notes to the consolidated financial statements. F- 6 SAb Biotherapeutics, Inc. and subsidiaries Notes to consolidated financial statements (1) Nature of Business On October 22, 2021 (the "Closing Date"), we consummated the business combination contemplated by the agreement and plan of merger, dated as of June 21, 2021, as amended on August 12, 2021, made by and among Big Cypress Acquisition Corp., a Delaware corporation (“BCYP”), Big Cypress Merger Sub Inc., a Delaware corporation (“Merger Sub”), SAB Biotherapeutics, Inc., a Delaware corporation (“SAB” or the “Company”), and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the representative, agent and attorney-in-fact of the SAB Stockholders. 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.”. SAB Biotherapeutics, Inc. is a clinical-stage biopharmaceutical company focused on the development and commercialization of a portfolio of products from its proprietary immunotherapy platform to produce fully targeted human polyclonal antibodies, without using human plasma or serum. SAB’s novel DiversitAb platform enables the rapid production of large amounts of targeted human polyclonal antibodies, leveraging transchromosomic cattle (Tc Bovine ™ ) that have been genetically designed to produce human antibodies (immunoglobulin G) rather than bovine in response to an antigen. Animal antibodies have been made in rabbits, sheep and horses. However, SAB's platform is the first to produce fully human antibodies in large animals. The COVID-19 pandemic continues to evolve, and the extent to which it may impact the Company’s business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the U.S. and other countries, business closures or business disruptions, and the effectiveness of actions taken in the U.S. and other countries to contain and treat the disease. The Company is following, and will continue to follow, recommendations from the U.S. Centers for Disease Control and Prevention, as well as federal, state, and local governments. To date, the Company has not experienced material business disruptions, but it cannot be certain of the future impact of the COVID-19 pandemic on its business and consolidated financial statements. (2) Summary of Significant Accounting Policies A summary of the significant accounting policies applied in preparation of the accompanying consolidated financial statements is set forth below. Basis of presentation The financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and include all adjustments necessary for the fair presentation of the Company’s financial position for the years presented. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, BCYP is treated as the “acquired” company and SAB Biotherapeutics is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of SAB Biotherapeutics issuing 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. SAB Biotherapeutics was determined to be the accounting acquirer based on the following predominant factors: • SAB Biotherapeutics’ shareholders have the largest portion of voting rights in the Company; • the Board and Management are primarily composed of individuals associated with SAB Biotherapeutics; • the operations of SAB comprise the ongoing operations of the Company. F- 7 The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of SAB Biotherapeutics. At the Closing Date, and subject to the terms and conditions of the Merger Agreement, each share of SAB Biotherapeutics common stock, par value $ 0.0001 per share, and each share of the SAB Biotherapeutics convertible preferred stock that was convertible into a share of SAB Biotherapeutics common stock at a one -to-one ratio, was converted into Common Stock equal to 0.4653 (the "Exchange Ratio"). The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the Exchange Ratio established in the Business Combination. Emerging growth company status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Principles of consolidation The accompanying consolidated financial statements include the results of the Company and its wholly owned subsidiaries, SAB Capra, LLC and Aurochs, LLC. Intercompany balances and transactions have been eliminated in consolidation. F- 8 Significant risks and uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to, the results of research and development efforts, clinical trial activities of the Company’s product candidates, the Company’s ability to obtain regulatory approval to market its product candidates, competition from products manufactured and sold or being developed by other companies, and the Company’s ability to raise capital. The Company currently has no commercially approved products and there can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and obtaining and protecting intellectual property. Funding from government grants is not guaranteed to cover all costs, and additional funding may be needed to cover operational costs as the Company moves forward to with our efforts to develop a commercially approved product. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the financial statements. The Company has used significant estimates in its determination of stock-based compensation assumptions, determination of the fair value of the Company’s common stock, determination of the fair value of the Private Placement Warrant liabilities, determination of the incremental borrowing rate (“IBR”) used in the calculation of the Company’s right of use assets and lease liabilities, and the valuation allowance on deferred tax assets. Actual amounts realized may differ from these estimates. Cash, cash equivalents, and restricted cash Cash equivalents include short-term, highly liquid instruments, consisting of money market accounts and short-term investments with original maturities at the date of purchase of 90 days or less. Amounts held in escrow by the Company pursuant to the Forward Share Purchase Agreement were reported as restricted cash on the consolidated balance sheet as of December 31, 2021. The reconciliation of cash, cash equivalents, and restricted cash as of the years ended December 31, 2021 and 2020 was as follows: December 31, 2021 December 31, 2020 Cash and cash equivalents $ 33,206,712 $ 12,610,383 Restricted cash 6,338,306 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 39,545,018 $ 12,610,383 F- 9 Accounts receivable Accounts receivable are carried at original invoice amount, less an allowance for doubtful accounts. The Company estimates an allowance for doubtful accounts for potential credit losses that are expected to be incurred, based on management’s assessment of the collectability of specific accounts, the aging of the accounts receivable, historical information and other currently available evidence. Receivables are written off when deemed uncollectible. To date, no receivables have been written off. The Company had no allowance for doubtful accounts as of December 31, 2021 and 2020 . Concentration of credit risk The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts, the balances of which, at times, may exceed federally insured limits. Exposure to credit risk is reduced by placing such deposits in high credit quality federally insured financial institutions. The Company received 100 % and approximately 96 % of its total revenue through grants from government organizations during the years ended December 31, 2021 and 2020 , respectively, and 0 % and approximately 4 % o f its total revenue through a grant from a non-government organization during the years ended December 31, 2021 and 2020, respectively. Lease liabilities and right-of-use assets The Company is party to certain contractual arrangements for equipment, lab space, and an animal facility, which meet the definition of leases under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”) . In accordance with ASC 842, the Company recorded right-of-use assets and related lease liabilities for the present value of the lease payments over the lease terms. The Company’s IBR was used in the calculation of its right-of-use assets and lease liabilities. Research and development expenses Expenses incurred in connection with research and development activities are expensed as incurred. These include licensing fees to use certain technology in the Company’s research and development projects, fees paid to consultants and various entities that perform certain research and testing on behalf of the Company, and expenses related to salaries, benefits, and stock-based compensation granted to employees in research and development functions. During the years ended December 31, 2021 and 2020, the Company had contracts with multiple contract research organizations (“CRO”) to complete studies as part of research grant agreements. 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 the 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 90 % of the contract has been paid as of December 31, 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 as of December 31, 2021 . Equipment The Company records equipment at cost less depreciation. Depreciation is calculated using straight-line methods over the following estimated useful lives: Animal facility equipment 7 years Laboratory equipment 7 years Leasehold improvements Shorter of asset life or lease term Office furniture & equipment 5 years Vehicles 5 years Repairs and maintenance expenses are expensed as incurred. F- 10 Impairment of long-lived assets The Company reviews the recoverability of long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If necessary, the Company compares the estimated undiscounted future net cash flows to the related asset’s carrying value to determine whether there has been an impairment. If an asset is considered impaired, the asset is written down to fair value, which is based either on discounted cash flows or appraised values in the period the impairment becomes known. The Company believes that long-lived assets are recoverable, and no impairment was deemed necessary, during the years ended December 31, 2021 and 2020 . Stock-based compensation FASB ASC Topic 718, Compensation – Stock Compensation , prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. The Company recognizes compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards. Prior to the Business Combination, the grant date fair value of the Company's common stock was typically be determined by the Company's board of directors with the assistance of management and a third-party valuation specialist. Subsequent to the Business Combination, the board of directors elected to determine the fair value of our post-merger common stock based on the closing market price at closing on the date of grant. In determining the fair value of stock-based awards, the Company utilizes the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value. The Black-Scholes option-pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options. For awards with performance-based vesting criteria, the Company estimates the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. No awards may have a term in excess of ten years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in the consolidated statements of operations based on the function to which the related services are provided. The company recognizes stock-based compensation expense over the expected term. Income taxes Deferred income taxes reflect future tax effects of temporary differences between the tax and financial reporting basis of the Company’s assets and liabilities measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will affect taxable income. When necessary, deferred tax assets are reduced by a valuation allowance, to reflect realizable value, and all deferred tax balances are reported as long-term on the consolidated balance sheet. Accruals are maintained for uncertain tax positions, as necessary. The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The Company has elected to treat interest and penalties related to income taxes, to the extent they arise, as a component of income taxes. Revenue recognition The Company’s revenue is primarily generated through grants from government and other (non-government) organizations. Grant revenue is recognized during the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grants are met. The Company 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. Comprehensive income (loss) The Company had no items of comprehensive income (loss) other than its net income (loss). F- 11 Litigation From time to time, the Company is involved in legal proceedings, investigations and claims generally incidental to its normal business activities. In accordance with U.S. GAAP, the Company accrues for loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal costs in connection with loss contingencies are expensed as incurred. Earnings per share On the Closing Date, the Company completed the Business Combination with BCYP, whereby the Company received 36,465,343 shares in exchange for all of its share capital. The effect of the Business Combination was reflected retroactively to January 1, 2020 and will be utilized for the calculation of earnings per share in all prior periods. The per share amounts have been updated to show the effect of the Exchange Ratio on earnings per share as if the exchange occurred at the beginning of both years for the consolidated financial statements of the Company. The impact of the stock exchange is also shown on the Company’s statements of changes in redeemable preferred stock and stockholders' equity (deficit). In accordance with ASC 260, Earnings per Share (“ASC 260”), basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common stock outstanding during the period. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted-average number of common stock outstanding for the period including potential dilutive common shares such as stock options. Segment reporting In accordance with ASC 280, Segment Reporting , the Company’s business activities are organized into one reportable segment, as only the Company’s operating results in their entirety are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated and to assess performance. Common stock valuations Prior to the Business Combination, the Company was required to periodically estimate the fair value of its common stock with the assistance of an independent third-party valuation firm, as discussed above, when issuing stock options and computing estimated stock-based compensation expense. The assumptions underlying these valuations represented the Company's best estimates, which involved inherent uncertainties and the application of significant levels of judgment. In order to determine the fair value of its common stock, the Company considered, among other items, previous transactions involving the sale of our securities, our business, financial condition and results of operations, economic and industry trends, the market performance of comparable publicly traded companies, and the lack of marketability of our common stock. Subsequent to the Business Combination, the Company now determines the fair value of common stock based on the closing market price at closing on the date of grant. Compensation expense related to stock-based transactions is measured and recognized in the financial statements at fair value of the post-merger common stock based on the closing market price at closing on the date of grant. Stock-based compensation expense is measured at the grant date based on the fair value of the equity award and is recognized as expense over the requisite service period, which is generally the vesting period, on the straight-line method. The Company estimates the fair value of each stock option award on the date of grant using the Black-Scholes option-pricing model. Determining the fair value of stock option awards at the grant date requires judgment, including estimating the expected volatility, expected term, risk-free interest rate, and expected dividends. F- 12 (3) New accounting standards Recently-adopted standards In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes (“ASC 740”) and by clarifying and amending existing ASC 740 guidance. The guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2020. Early adoption was permitted. The Company adopted the guidance as of January 1, 2021 . The adoption did not have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The guidance removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for such exception and simplifies the diluted earnings per share calculation in certain areas. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted in annual reporting periods ending after December 15, 2020. The Company early adopted the guidance as of January 1, 2021 . The adoption did not have a material impact on the Company’s consolidated financial statements. (4) Reverse Recapitalization and Business Combination On the Closing Date, BCYP closed the Business Combination with SAB Biotherapeutics, as a result of which SAB Biotherapeutics became a wholly-owned subsidiary of BCYP. While BCYP was the legal acquirer of SAB Biotherapeutics in the Business Combination, for accounting purposes, the Business Combination is treated as a Reverse Recapitalization. SAB Biotherapeutics is treated as the accounting acquirer with historical financial statements of SAB Biotherapeutics becoming the historic financial statements of BCYP (renamed SAB Biotherapeutics, Inc.) upon consummation of the Business Combination. Under this method of accounting, BCYP is treated as the "acquired" company and SAB Biotherapeutics is treated as the acquirer for financial reporting purposes. For accounting reporting purposes, the Business Combination was treated as the equivalent of SAB Biotherapeutics issuing stock for the net assets of BCYP, accompanied by a recapitalization. The net assets of BCYP were stated at historical cost, with no goodwill or other intangible assets recorded. Pursuant to the Business Combination Agreement, the aggregate consideration payable to stockholders of SAB Biotherapeutics at the Closing Date consisted of 36,465,343 shares of New SAB Biotherapeutics common stock, par value $ 0.0001 per share ("Common Stock"). Each option of SAB Biotherapeutics that was outstanding and unexercised immediately prior to the Effective Time (whether vested or unvested) was assumed by BCYP and converted into an option to acquire an adjusted number of shares of Common Stock at an adjusted exercise price per share, in each case, pursuant to the terms of the Business Combination Agreement (the "Rollover Options"). F- 13 Additionally, the Business Combination Agreement included 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. The Earnout Shares shall be released in four equal increments as follows: (i) 25 % of the Earnout Shares shall be released if, at any time during the five ( 5 )-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $ 15.00 for any twenty ( 20 ) trading days within a period of thirty ( 30 ) consecutive trading days (the “First Earnout”). (ii) 25 % of the Earnout Shares shall be released if, at any time during the five ( 5 )-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $ 20.00 for any twenty ( 20 ) trading days within a period of thirty ( 30 ) consecutive trading days (the “Second Earnout”). (iii) 25 % of the Earnout Shares shall be released if, at any time during the five ( 5 )-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $ 25.00 for any twenty ( 20 ) trading days within a period of thirty ( 30 ) consecutive trading days (the “Third Earnout”). (iv) 25 % of the Earnout Shares shall be released if, at any time during the five ( 5 )-year period immediately following the Closing Date, the VWAP of the Company's publicly traded common stock is greater than or equal to $ 30.00 for any twenty ( 20 ) trading days within a period of thirty ( 30 ) consecutive trading days (the “Fourth Earnout” and together with the First Earnout, the Second Earnout and the Third Earnout, the “Earnouts”). At the Effective Time, each outstanding share of SAB Biotherapeutics common stock, including shares of SAB Biotherapeutics common stock resulting from the conversion of outstanding shares of SAB Biotherapeutics preferred stock (as calculated pursuant to the SAB Biotherapeutics certificate of incorporation), immediately prior to the Effective Time, was converted into the right to receive a pro rata portion of the total consideration and the contingent right to receive a pro rata portion of the Earnout Shares. Pursuant to the terms of the Business Combination Agreement, SAB Biotherapeutics’ securityholders (including vested option holders) who own SAB Biotherapeutics securities immediately prior to the Closing Date will have the contingent right to receive their pro rata portion of (i) an aggregate of 12,000,000 shares of Common Stock (“Earnout Shares”), of which 1,508,063 are contingently issuable based upon future satisfaction of the aforementioned VWAP thresholds. The remaining 10,491,937 are legally issued and outstanding, if the Company does not meet the above VWAP thresholds, or a change in control with a per share price below the VWAP thresholds occurs within a five-year period immediately following the Closing Date, the shares will be returned to the Company. The Earnout Shares are indexed to our equity and meet the criteria for equity classification. On the Closing Date, the fair value of the 12,000,000 Earnout Shares was $ 101.3 million. We reflected the Earnout Shares in the consolidated balance sheet at December 31, 2021 as a stock dividend by reducing additional paid-in capital, which was offset by the increase in additional paid-in capital associated with the Business Combination. Preceding the Business Combination, on October 12, 2021, BCYP entered into a Forward Share Purchase Agreement (the “Forward Share Purchase Agreement”) with Radcliffe SPAC Master Fund, L.P., a Cayman Islands exempted limited partnership (“Radcliffe”). Under the Forward Share Purchase Agreement, Radcliffe shall sell and transfer to BCYP, and BCYP shall purchase from Radcliffe, up to 1,390,000 shares of common stock owned by Radcliffe at the closing of the Business Combination at a per Share price (the “Purchase Price”) equal to $ 10.10 per share (the "Market Sales Price"). Further, BCYP shall purchase the remaining shares held by Radcliffe not sold in the open market in excess of the Market Sales Price at the later of (a) the 90 th day after the closing of the Business Combination, or (b) the first business day following the 95 th day after the closing of the Business Combination if BCYP directs Radcliffe to sell shares at a mutually agreed upon price other than the Market Sales Price. As of the Closing Date, 1,296,891 shares of common stock were held by Radcliffe under the Forward Share Purchase Agreement. F- 14 Pursuant to the treatment of the Business Combination as a reverse recapitalization, SAB Biotherapeutics assumed the liability position as it existed as of the Effective Time. The net assets of the acquired entity were adjusted to include a forward share purchase liability of $ 13,098,599 . In connection with the Business Combination, an amount matching the assumed forward share purchase liability was transferred into escrow, pending final settlement of the Forward Share Purchase Agreement in January 2022. Given the short-term nature of the Forward Share Purchase Agreement, the Company did not present value the forward share purchase liability. Subsequent settlements whereby Radcliffe sold shares in the open market in excess of the Market Sales Price were treated as a reduction in the assumed forward share purchase liability, with an offsetting increase in equity of the Company. Prior to December 31, 2021, a portion of the forward share purchase liability was settled. As of December 31, 2021, the forward share purchase liability balance was $ 6,338,306 on the consolidated balance sheet. The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows for the year ended December 31, 2021: Recapitalization Cash - BCYP trust and cash, net of redemptions $ 22,535,723 Plus: restricted cash - Forward Share Purchase Agreement 13,098,599 Less: cash transaction costs allocated to the Company's equity ( 1,294,097 ) Total $ 34,340,225 The following table reconciles the elements of the Business Combination to the consolidated statement of changes in redeemable preferred stock and stockholders' equity (deficit) for the year ended December 31, 2021: Recapitalization Cash - BCYP trust and cash, net of redemptions $ 22,535,723 Plus: restricted cash - Forward Share Purchase Agreement 13,098,599 Less: non-cash net working capital assumed from BCYP ( 5,067,682 ) Less: forward share purchase liability assumed from BCYP ( 13,098,599 ) Less: fair value of redeemable warrants ( 6,569,062 ) Less: transaction costs allocated to the Company's equity ( 3,294,096 ) Total $ 7,604,883 The following table details the number of shares of common stock issued immediately following the consummation of the Business Combination: Shares Common stock, reedeemable and outstanding prior to Business Combination 11,500,000 Less: redemption of BCYP shares ( 8,030,289 ) Common stock of BCYP 3,469,711 BCYP Founder and private shares 3,292,200 Shares issued for services 247,525 Total BCYP shares 7,009,436 SAB Biotherapeutics, Inc and subsidiaries shareholders 36,465,343 Total shares of common stock immediately after Business Combination 43,474,779 The following table details the allocated assets acquired and liabilities assumed as follows: Assets Acquired BCYP trust and cash, net of redemptions $ 22,535,723 Restricted cash - Forward Share Purchase Agreement 13,098,599 Other assets 102,742 Assets acquired $ 35,737,064 Liabilities Assumed Forward share purchase liability $ 13,098,599 Fair value of redeemable warrants 6,569,062 Other liabilities and accrued expenses 5,170,424 Liabilities assumed 24,838,085 Net Assets Acquired $ 10,898,979 F- 15 (5) Revenue During the years ended December 31, 2021 and 2020, the Company worked on the following grants: Government grants The total revenue for government grants was approximately $ 60.9 million and $ 52.8 million respectively, for the years ended December 31, 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, 2021 and 2020 , there was approximately $ 518,000 and $ 228,000 , respectively, in grant income recognized. The corporation applied for an extension on the grant funding, and the extension is pending approval. If approved, there is approximately $ 203,000 in funding remaining for this grant as of December 31, 2021. 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, 2021 and 2020, there was approximately $ 51,000 and $ 99,000 respectively, in grant income recognized. There is approximately $ 823,000 in funding remaining for this grant as of December 31, 2021. 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, 2021 and 2020 , there was approximately $ 94,000 and $ 351,000 , respectively, in grant income recognized from this grant. The corporation applied for an extension on the grant funding, and the extension is pending approval. If approved, there is approximately $ 1.5 million in funding remaining for this grant as of December 31, 2021. 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 contract in 2020 and 2021 for work on a COVID therapeutic, bringing the contract total to $ 204 million. For the years ended December 31, 2021 and 2020, there was approximately $ 60.2 million and $ 52.1 million, respectively, in grant income recognized from this grant. There is approximately $ 89.2 million in funding remaining for this grant as of December 31, 2021. The grants for the JPEO contract are cost reimbursement agreements, with reimbursement of our direct research and development expense (labor and consumables) with an overhead charge (based on actual, reviewed quarterly) and a fixed fee ( 9 %). However, a portion of the funding ($ 12 million in 2020) from this contract was for capacity building, including funding for equipment and facilities. A majority of this was for a 200L purification suite and two production barns, which are in locations that are currently leased by the corporation. While the government and the Company have agreed to negotiate in good faith to afford government access to this equipment, the Company is allowed to use this equipment for any project. As a majority of the value is in leasehold improvements (and therefore cannot be returned to the government), the corporation is treating the assets as company owned, and recognized the proceeds from the reimbursement as revenue. Therefore, revenue significantly exceeded research and development expenses, as there were no research and development expenses to offset the $ 12 million in revenu e. Other grants (non-government) The total revenue for other grants (non-government) was approximately $ 0 and $ 2.4 million for the years ended December 31, 2021 and 2020, respectively. 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 ). F- 16 (6) Earnings per share On the Closing Date, the Company completed the Business Combination with BCYP, whereby the Company received 36,465,343 shares in exchange for all of its share capital. The effect of the Business Combination was recast to reflect the Exchange Ratio to January 1, 2020, and will be utilized for the calculation of earnings per share in all prior periods. The per share amounts have been updated to show the effect of the exchange on earnings per share as if the exchange occurred at the beginning of both years for the annual financial statements of the Company. The impact of the stock exchange is also shown on the Company’s consolidated statements of changes in redeemable preferred stock and stockholders’ equity (deficit). Since the Company reported a net loss for the year ended December 31, 2021, it was required by ASC 260 to use basic weighted-average shares outstanding when calculating diluted net loss per share for the year ended December 31, 2021, as the potential dilutive securities are anti-dilutive. Year Ended December 31, 2021 Calculation of basic and diluted EPS attributable to the Company’s shareholders Net loss attributable to the Company’s shareholders $ ( 17,144,531 ) Weighted-average common shares outstanding – basic and diluted 27,339,180 Net loss per common share, basic and diluted $ ( 0.63 ) The shares in the table below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: Year Ended December 31, 2021 Stock options 3,724,957 Common stock warrants 5,958,600 Earnout shares (1) 10,491,937 Contingently issuable earnout shares from unexercised Rollover Options 1,508,063 Total 21,683,557 (1) As the Earnout shares are subject to certain vesting requirements not satisfied as of the year ended December 31, 2021, the Earnout Shares held in escrow are excluded from calculating both basic and diluted earnings per share. The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for the year ended December 31, 2020: Year Ended December 31, 2020 Calculation of basic EPS attributable to the Company’s shareholders Net income attributable to the Company’s shareholders $ 20,117,773 Weighted-average common shares outstanding – basic 25,391,084 Net earnings per share, basic $ 0.79 Calculation of diluted EPS attributable to the Company’s shareholders Net income attributable to the Company’s shareholders $ 20,117,773 Weighted-average common shares outstanding – diluted 27,011,482 Net earnings per share, diluted $ 0.74 The following table reconciles the weighted-average common shares outstanding used in the calculation of basic earnings per share (“EPS”) to the weighted-average common shares outstanding used in the calculation of diluted EPS for the year ended December 31, 2020: Year Ended December 31, 2020 Weighted-average common shares outstanding – basic 25,391,084 Stock options 1,620,398 Total 27,011,482 F- 17 (7) Equipment As of December 31, 2021 and 2020, the Company’s equipment was as follows: 2021 2020 Laboratory equipment $ 7,431,988 $ 5,205,346 Animal facility 8,357,667 3,371,125 Animal facility equipment 1,253,879 1,003,629 Construction-in-progress 4,608,778 6,729,673 Leasehold improvements 5,700,364 185,971 Vehicles 135,593 96,693 Office furniture and equipment 46,202 20,219 Less: accumulated depreciation and amortization 3,220,016 1,767,186 Property, plant and equipment net $ 24,314,455 $ 14,845,470 Depreciation and amortization expense for the years ended December 31, 2021 and 2020 was $ 1,488,614 and $ 383,142 , respectively. All tangible personal property with a useful life of at least three years and a unit acquisition cost of $ 5,000 or more will be capitalized and depreciated over its useful life using the straight-line method of depreciation. The Company will expense the full acquisition cost of tangible personal property below these thresholds in the year of purchase. The basis of accounting for depreciable fixed assets is acquisition cost and any additional expenditures required to make the asset ready for use. The carrying amount at the balance sheet date of long-lived assets under construction-in-progress includes assets purchased, constructed, or being developed internally that are not yet in service. Depreciation commences when the assets are placed in service. The Company has several ongoing construction projects related to the expansion of its operating capacity. As of December 31, 2021 and 2020, the Company’s construction-in-progress was as follows: 2021 2020 200L commercial facility $ — $ 4,148,113 200L commercial facility equipment — 486,381 New animal barn (#6) — 1,551,167 New office space (at Headquarters) 11,183 477,907 Laboratory space at Headquarters 2,506,482 — Lab equipment at Headquarters 246,801 — IT equipment for new office space 212,209 — Software 137,811 — Bioreactors 1,280,728 — Other 213,564 66,105 Total construction-in-progress $ 4,608,778 $ 6,729,673 The Bioreactors, the laboratory space and equipment at Headquarters were placed into service at the end of March 2022. (8) Leases The Company has an operating lease for lab space from Sanford Health (a related party), under a lease that started in June 2014 and ran through June 2019 , at which time the lease was amended to run through August 2024 . This lease can be terminated with one year advance written notice. The lease is for $ 66,993 per month. The operating lease does not include an option to extend beyond the life of the current term. The lease does not provide an implicit rate, and, therefore, the Company used an IBR of 4.54 % as the discount rate when measuring the operating lease liability. The Company estimated the incremental borrowing rate based upon comparing interest rates available in the market for similar borrowings and the credit quality of the Company. The Company entered into a lease for office, laboratory, and warehouse space in November 2020 . This lease has a 3-year term, with options to extend for 3 additional periods of 3 years each. The options were not included in the right of use calculation as it is unclear as to whether or not the location will meet the Company’s requirements beyond the next three years. The lease cost is $ 36,125 per month. The Company used an IBR of 4.69 % as the discount rate when measuring the operating lease liability. The Company estimated the incremental borrowing rate based upon comparing interest rates available in the market for similar borrowings and the credit quality of the Company. F- 18 The Company entered into a lease for barn space for the housing of goats in April 2020 . This lease has a 2-year term, with automatic renewals for a one-year period after the initial term expires until either party terminates. The options were not included in the right of use calculation, as the goat project is mostly funded by government grants, and those grants do not currently extend beyond the initial lease term. The lease cost is $ 665 per month for the first year, then $ 678 per month for the second year. The Company used an IBR of 4.08 % as the discount rate when measuring the operating lease liability. The Company estimated the incremental borrowing rate based upon comparing interest rates available in the market for similar borrowings and the credit quality of the Company. The Company has the following finance leases: • In December 2018 , the Company entered into a finance lease with Dakota Ag Properties for a new animal facility which includes the surrounding land. The facility and the land have been accounted for as separate lease components. The lease is based upon payback of $ 4,000,000 in construction costs, with a 20-year term at an interest rate of 8 %. The monthly payment for this lease is $ 33,458 . The Company has the option to purchase the asset at any time during the term of the lease for the balance of the unamortized lease payments. • In December 2018 , the Company entered into an equipment lease for a 12,000 -gallon propane tank that is located on the Company’s animal facility. The lease is for five years , with an annual payment of $ 8,199 . The Company has the option to purchase the asset at any time during the term of the lease for the balance of the unamortized lease payments. • In July 2018 , the Company entered into a lease agreement with a bank, for a Ruby Cell Analyzer. The lease agreement is for a five-year term. The monthly payment for this lease is $ 807 . The Company has the option to purchase the asset at the end of the lease for $ 1 . • In March 2019 , the Company entered into two lease agreements for laboratory equipment. The leases are each for a 3-year term and a combined monthly payment of $ 5,956 . Both leases have a $ 1 purchase option at the end of the lease term. The lease agreements do not require material variable lease payments, residual value guarantees or restrictive covenants. The amortizable lives of the operating lease assets are limited by their expected lease terms. The amortizable lives of the finance lease assets are limited by their expected lives, as the Company intends to exercise the purchase options at the end of the leases. The following is the estimated useful lives of the finance lease assets: Animal Facility 40 years Equipment 3 – 7 years Land Indefinite The Company’s weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of December 31, 2021 are: Operating Finance Weighted-average remaining lease term 2.44 years 16.80 years Weighted-average discount rate 4.58 % 7.71 % The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the consolidated balance sheet as of December 31, 2021: Operating Finance 2022 $ 1,240,333 $ 444,928 2023 1,169,559 406,339 2024 535,943 401,496 2025 — 401,496 2026 — 401,496 Thereafter — 4,784,494 Undiscounted future minimum lease payments 2,945,835 6,840,249 Less: Amount representing interest payments ( 150,237 ) ( 2,916,769 ) Total lease liabilities 2,795,598 3,923,480 Less current portion ( 1,142,413 ) ( 161,050 ) Noncurrent lease liabilities $ 1,653,185 $ 3,762,430 F- 19 Operating lease expense was approximately $ 1,083,000 and $ 710,000 , respectively, for the years ended December 31, 2021 and 2020. Operating lease costs are included within research and development expenses on the consolidated statements of operations. Finance lease costs for the years ended December 31, 2021 and 2020 included approximately $ 165,000 and $ 165,000 , respectively, in right-of-use asset amortization and approximately $ 296,000 and $ 445,000 , respectively, of interest expense. Finance lease costs are included within research and development expenses on the consolidated statements of operations. Cash payments under operating and finance leases were approximately $ 1,147,000 and $ 491,000 , respectively, for the year ended December 31, 2021 . Cash payments under operating and finance leases were approximately $ 564,000 and $ 491,000 , respectively, for the year ended December 31, 2020 . (9) Accrued Expenses and Other Current Liabilities As of December 31, 2021 and 2020, accrued expenses and other current liabilities consisted of the following: 2021 2020 Accrued vacation $ 552,629 $ 438,936 Accrued payroll 674,858 314,451 Accrued construction-in-progress 548,988 637,776 Accrued supplies 709,027 301,989 Accrued consulting 179,082 120,744 Accrued clinical trial expense 423,634 — Accrued outside laboratory services 128,752 — Accrued bonus & severance 1,804,288 — Accrued contract manufacturing 1,000,824 — Accrued legal 833,646 — Accrued financing fees payable 5,100,000 — Accrued franchise tax payable 216,251 — Other accrued expenses 283,909 90,982 $ 12,455,888 $ 1,904,878 ( 10) Notes Payable As of December 31, 2021 and 2020, notes payable was as follows: 2021 2020 Tractor loan $ 25,013 $ 49,156 PPP loan — 661,612 Total notes payable 25,013 710,768 Less: notes payable - current portion 25,013 538,731 Notes payable, noncurrent $ — $ 172,037 On November 15, 2017, the Company entered into a loan agreement with a bank, for the financing of an ultrasound machine for $ 18,997 . The agreement was for a four-year term, with monthly payments of $ 440 . The note payable was paid off in full in September 2020. In December 2017, the Company entered into a loan agreement for the purchase of a tractor for $ 116,661 at a 3.6 % interest rate. The loan included annual payments of $ 25,913 for the next five years starting in December 2018. The tractor loan balance as of December 31, 2021 and 2020 was $ 25,013 and $ 49,156 , respectively. The total amount of the remaining loan balance is due in full in 2022. F- 20 On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). In April 2020, the Company entered into a loan agreement (the “PPP Loan”) with First Premier Bank under the Paycheck Protection Program (the “PPP”), which is part of the CARES Act administered by the United States Small Business Administration (“SBA”). As part of the application for these funds, the Company, in good faith, certified that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. The certification further requires the Company to take into account its current business activity and its ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. Under the PPP, the Company received proceeds of approximately $ 661,612 . In accordance with the requirements of the PPP, the Company utilized the proceeds from the PPP Loan primarily for payroll costs. The PPP Loan has a 1.00 % interest rate per annum, matures in April 2022 and is subject to the terms and conditions applicable to loans administered by the SBA under the PPP. Under the terms of PPP, all or certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses, as described in the CARES Act. The Company recorded the entire amount of the PPP Loan as debt. In February 2021, the Company submitted a forgiveness application related to its PPP Loan. In March 2021, the SBA approved the forgiveness of the PPP Loan, plus accrued interest. We recorded a gain on extinguishment of PPP Loan of $ 665,596 for the forgiveness of the PPP Loan and accrued interest within gain on debt extinguishment of Paycheck Protection Program SBA Loan on the consolidated statement of operations for the year ended December 31, 2021. Note payable, related party On February 24, 2016, the Company entered into a loan agreement with Christiansen Land and Cattle, Ltd. (“CLC”), a related party, for a $3.0 million revolving line of credit secured by a blanket security interest in the assets of the Company. The Company borrowed $2.5 million from the line of credit in 2016, and $350,000 in 2017. The line of credit bears a fixed rate per annum of 6% compounded annually. The initial agreement was based upon repayment following a significant capital event – closing of equity or debt financing with total proceeds to the Company of $15 million or more or one year from the agreement date, whichever occurred first. The agreement was amended in August 2018 to extend the repayment timeframe to August 31, 2019. The first payment to repay this loan was made on August 31, 2018 ($1.0 million payment). Additional voluntary payments were being made at the rate of $30,000 per month. In August 2019, the agreement was amended to extend the maturity date to the earlier of August 31, 2020 or the occurrence of a significant capital event, as defined above. In July 2020, the note payable was paid in full. (11) Preferred Stock On the Closing Date, pursuant to the Business Combination (as described in Note 4), 17,750,882 outstanding shares of Preferred Stock were automatically converted into 8,259,505 shares of common stock pursuant to the Exchange Ratio. In addition, upon the closing of the Business Combination, pursuant to the terms of the Second Amended and Restated Certificate of Incorporation, the Company authorized 10,000,000 shares of preferred stock with a par value $ 0.0001 . Prior to the Business Combination, in August 2019, the Company’s Certificate of Incorporation was amended to authorize the Company to issue 50,000,000 shares of preferred stock, of which 6,615,000 shares were designated as Series A preferred stock, 2,525,800 shares were designated as series A-1 preferred stock, 4,039,963 shares were designated as series A-2 preferred stock, 3,333,333 shares were designated as series A-2A preferred stock, and 8,571,429 shares were designated as series B preferred stock. The carrying value of Series A preferred stock was $ 1 per share, Series A-1 $ 1.88 per share, Series A-2 & A-2A $ 3.00 per share, and Series B $ 3.50 per share. The preferred stock was entitled to receive noncumulative dividends in preference to any dividend on the common stock when, as, and if declared by the Company’s board of directors. The holders of the preferred stock also were entitled to participate pro rata in any dividends paid on the common stock on an as-if-converted basis. Each holder of preferred stock was entitled to the number of votes equal to the number of shares of common stock that it could be converted into. As long as there were 8,000,000 shares of preferred stock outstanding, the vote or written consent of the holder of the majority of the outstanding preferred stock (all series voting as a single class) was required to approve any amendment of the certificate of incorporation that changes voting, preferences or privileges or restrictions of the preferred stock. In the event of liquidation or winding up of the Company, the preferred stockholders also were entitled to receive in preference to the holders of the common stock the greater of: a) a per share amount equal to their respective original purchase price plus any declared but unpaid dividends (the “Liquidation Preference”); or b) the amount to be paid on the common stock on an as-if-converted basis. The remaining assets would be distributed to the common stockholders. F- 21 The holders of preferred stock had the right to convert the preferred stock into common stock, at any time, utilizing the then- effective conversion rate. The effective conversion rate as of December 31, 2020 was 1:1. All preferred shares were automatically converted into common shares utilizing the then effective preferred conversion rate upon: a) the closing of the Company’s sale of its common stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, covering the sale of the Company’s common stock if gross proceeds are at least $ 20,000,000 and the Company’s shares have been listed on a stock exchange, as defined; or b) the election of the holders of a majority of the outstanding shares of preferred stock. With any change of control of the Company or financing, the preferred stockholders were to approve through majority vote any such change in control or financing event approved by the board of directors or the majority of the common stockholders. The preferred stock contained certain anti-dilution provisions, as defined. In addition to the rights described above, series A-2A preferred stock was redeemable at a price equal to $5 per preferred share at the option of the investor at any time during the redemption period, which was scheduled to commence in August 2022 and end in August 2023. As a result of the redemption feature, the Company classified the series A-2A preferred stock as mezzanine equity as of January 1, 2020. However, the redemption feature was terminated during the year ended December 31, 2020, and the series A-2A preferred stock was reclassified from mezzanine equity to permanent equity. (12) Stock Option Plans On August 5, 2014, the Company approved a stock option grant plan (the “2014 Equity Incentive Plan”) for employees, directors, and non-employee consultants, which provides for the issuance of options to purchase common stock. The total shares authorized under the plan was originally 8,000,000 ; however, during 2019, the Plan was amended to increase the total shares authorized under the plan to 16,000,000 . As a result of the Business Combination, the 2014 Equity Incentive Plan was amended to reduce the shares authorized to 7,444,800 based upon the impact of the Exchange Ratio. As a result of the Business Combination, the Company adopted the 2021 Omnibus Equity Incentive Plan (hereinafter collectively with the 2014 Equity Incentive Plan referred to as the "Equity Compensation Plans"), representing 11,000,000 shares of common stock reserved for issuance upon exercise of stock options. Vesting of the stock options is based upon years of service (employment). As of December 31, 2021 and 2020, 3,724,957 and 3,202,354 stock options, respectively, were vested and exercisable. During the year ended December 31, 2021, 12,500 of the vested options were exercised, while as of December 31, 2020 , no ne of the vested stock options were exercised. As of December 31, 2021, the aggregate intrinsic value of stock options outstanding was $ 28.9 million , of which $ 4.1 million was unvested and $ 24.8 million was vested and exercisable. The Company uses the Black Scholes model to estimate the fair value of the stock options granted. For stock options granted during the years ended December 31, 2021 and 2020, the Company utilized the following weighted-average assumptions: A risk free interest rate of 0.85 % and 0.13 % , respectively; expected term of 6.25 years (both years); expected dividend yield of 0 % (both years); and a volatility factor of 92.8 % and 106.1 % , respectively. There were 328,718 forfeitures and zero expirations during the year ended December 31, 2021 . There were no forfeitures or expirations during the year ended December 31, 2020. The expected term of the stock options was estimated using the “simplified” method, as defined by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment . The volatility assumption was determined by examining the historical volatilities for industry peer companies, as the Company does not have sufficient trading history for its common stock. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the options. The dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Therefore, the Company has assumed no dividend yield for purposes of estimating the fair value of the options. F- 22 Stock option activity for employees and non-employees under the Equity Compensation Plans for the years ended December 31, 2021 and 2020 was as follows: Options Weighted Average Fair Value Weighted Average Exercise Price Balance, December 31, 2019 3,139,855 $ 0.82 $ 0.88 Granted 962,088 $ 3.44 $ 2.69 Balance, December 31, 2020 4,101,943 $ 1.43 $ 1.30 Granted 1,346,947 $ 5.36 $ 5.81 Forfeited 328,718 $ 2.17 $ 2.06 Exercised 12,500 $ 0.39 $ 0.54 Balance, December 31, 2021 5,107,672 $ 2.30 $ 2.44 Unvested at December 31, 2021 1,382,715 $ 5.41 $ 5.92 Vested and exercisable at December 31, 2021 3,724,957 $ 1.14 $ 1.16 Total unrecognized compensation cost related to non-vested stock options as of December 31, 2021 was approximately $ 6.6 million and is expected to be recognized within future operating results over a weighted-average period of 2.31 years. As of December 31, 2021, the weighted-average contractual term of the options outstanding was approximately 5.78 years. As of December 31, 2021, the weighted-average contractual term of the vested options was approximately 4.46 years. During the years ended December 31, 2021 and 2020, 461,701 shares and 400,632 shares, respectively, vested. Stock-based compensation expense for the years ended December 31, 2021 and 2020 was as follows: 2021 2020 Research and development $ 964,926 $ 635,824 General and administrative 1,349,756 659,599 Total $ 2,314,682 $ 1,295,423 (13) Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques that would be used to measure fair value into one of three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. F- 23 The following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis at December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Total Quoted Prices In Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Liabilities: Public Warrant liability $ 10,292,500 $ 10,292,500 $ — $ — Private Placement Warrant liability 427,630 — — 427,630 Total $ 10,720,130 $ 10,292,500 $ — $ 427,630 Public Warrants Each whole Public Warrant entitles the holder to purchase one share of the Company's common stock at a price of $ 11.50 per share , subject to adjustment as discussed herein. The Public Warrants became exercisable 30 days after the Closing Date of the Business Combination, and will expire five years after the Closing Date of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may call the warrants for redemption: • in whole and not in part; • at a price of $ 0.01 per warrant; upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and • if, and only if, the reported last sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a • 30-trading day period ending three business days before the Company send the notice of redemption to the warrant holders. If the Company calls the warrants for redemption as described above, the management will have the option to require any holder that wishes to exercise its warrant to do so on a “cashless basis.” If the management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. As of December 31, 2021 , 5,750,000 Public Warrants were outstanding. Private Placement Warrants The Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or saleable until after the completion of the Company's Business Combination. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of December 31, 2021 , 208,600 Private Placement Warrants were outstanding. F- 24 Presentation and Valuation of the Warrants The Warrants (both the Public Warrants and Private Placement Warrants) are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity and were presented within warrant liabilities on the consolidated balance sheet as of December 31, 2021. The initial fair value of the warrant liabilities were measured at fair value at the Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in the consolidated statement of operations for the year ended December 31, 2021 . On the Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (“MCS”) analysis. Specifically, the Company considered an MCS to derive the implied volatility in the publicly-listed price of the Public Warrants. The Company then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants. The Company determined the fair value of the Public Warrants by reference to the quoted market price. The Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and the Private Placement Warrants held privately by Big Cypress Holdings LLC, a Delaware limited liability company which acted as the Company’s sponsor in connection with the IPO (the "Sponsor"), were classified as a Level 3 fair value measurement, due to the use of unobservable inputs. The following table provides a summary of the changes in our Level 3 fair value measurements: 2021 Balance, December 31, 2020 $ — Initial measurement on the Closing Date 244,062 Change in fair value of Private Placement Warrant liability 183,568 Balance, December 31, 2021 $ 427,630 The initial measurement on the Closing Date for the Public Warrant liability was approximately $ 6.3 million and the change in fair value of the Public Warrant liability was approximately $ 4.0 million for the year ended December 31, 2021. The key inputs into the valuations as of the Closing Date and December 31, 2021 were as follows: (Initial Measurement) October 22, 2021 December 31, 2021 Risk-free interest rate 1.22 % 1.24 % Expected term remaining (years) 5.00 4.81 Implied volatility 25.5 % 43.0 % Closing common stock price on the measurement date $ 8.44 $ 7.81 As of December 31, 2021 and 2020 , the Company did no t have any other assets or liabilities that are recorded at fair value on a recurring basis. The Company believes that the carrying amounts of its cash and cash equivalents, accounts receivable, and notes payable approximate their fair values due to their near-term maturities. F- 25 (14) Income Taxes Net deferred tax assets as of December 31, 2021 and 2020 consisted of the following: 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 5,078,429 $ 2,659,082 Stock-based compensation 1,156,235 600,592 Vacation accrual 99,300 84,553 Lease liabilities 623,286 727,587 Other accrued expenses 1,119,721 — Start-up costs 297,136 — Total deferred tax assets 8,374,107 4,071,814 Less valuation allowance ( 5,300,689 ) ( 2,320,958 ) Total deferred tax assets after valuation allowance $ 3,073,418 $ 1,750,856 Deferred tax liabilities: Operating lease right-of-use asset 551,547 641,135 Depreciation and amortization 2,521,871 1,109,721 Total deferred tax liabilities 3,073,418 1,750,856 Net deferred tax asset (liability) $ — $ — The reconciliation between the Company’s effective tax rate and the statutory tax rate of 21 % includes the following significant items: changes in the valuation allowance and permanent items including meals and entertainment. The rate reconciliation was as follows: 2021 2020 Rate reconciliation: Net (loss) income before tax $ ( 17,144,531 ) $ 20,117,773 Federal income tax at statutory rate ( 3,600,352 ) 21.00 % 4,224,732 21.00 % State income tax ( 9,849 ) 0.06 % — — % Permanent items 1,029,874 ( 6.01 )% 918 ( 0.01 )% Valuation allowance 2,679,238 ( 15.63 )% ( 4,225,651 ) ( 20.99 )% Other ( 98,911 ) 0.58 % 1 — % $ — — % $ — — % In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical losses and the uncertainty of future taxable income over the periods which the Company will realize the benefits of its net deferred tax assets, management believes it is more likely than not that the Company will not fully realize the benefits on the balance of its net deferred tax asset and, accordingly, the Company has established a valuation allowance on its net deferred tax assets. The valuation allowance increased by approximately $ 2,980,000 and decreased by approximately $ 4,226,000 , respectively, for the years ended December 31, 2021 and 2020. As of December 31, 2021, the Company had approximately $ 25,175,483 of federal net operating losses, which were generated after December 31, 2017 and can be carried forward indefinitely under the Tax Cuts and Jobs Act and may generally be used to offset up to 80 % of future taxable income. The Company has historically experienced ownership change(s) pursuant to Section 382 of the Internal Revenue Code ("the Code") of 1986, as amended, as well as similar state provisions. Utilization of the Company’s net operating loss carryforwards are subject to annual limitation(s) due to historical ownership change(s) that have occurred and may be further restricted in the event future ownership changes occur. These ownership changes may limit the amount of the net operating loss carryover that can be utilized annually to offset future taxable income. In general, an “ownership change”, as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. F- 26 U.S. GAAP provides that the tax effects from uncertain tax positions can be recognized in the consolidated financial statements only if the position is more likely than not of being sustained on audit, based on the technical merits of the position. As of December 31, 2021 and 2020 , there were no uncertain tax provisions. There was no interest or penalties related to income taxes for the years ended December 31, 2021 and 2020 , and there was no accrued interest or penalties associated with uncertain tax positions as of December 31, 2021 and 2020. The Company files tax returns as prescribed by the laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. The Company’s tax years are still open under the statute from 2018 to present. However, to the extent allowed by law, the taxing authorities may have the right to examine the period from 2015 through 2021 whe re net operating losses were generated and carried forward and make adjustments to the amount of the net operating loss carryforward amount. The Company is not currently under examination by federal or state jurisdictions. As discussed in Note 10, Notes Payable , on March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. It was determined the CARES Act did not materially impact the Company’s tax provision as of December 31, 2021 . (15) Related Party Transactions For the years ended December 31, 2021 and 2020, the Company paid consulting fees to a board member, Christine Hamilton, who is also an owner, of $ 25,000 and $ 25,000 , respectively. As of December 31, 2021 and 2020, there was $ 6,250 (both years) in accrued board member fees for this related party. For the year ended December 31, 2020 , the Company paid Network Plus, LLC (owner is the spouse of an employee) approximately $ 19,000 for IT assistance and computer setups. The spouse became an employee of the Company in July 2020, and there was no further activity with this vendor. For the years ended December 31, 2021 and 2020, the Company made lease payments to Dakota Ag Properties of $ 435,000 and $ 401,000 , respectively. Dakota Ag Investments (part of Dakota Ag Properties) is a shareholder and owner of the Company. For the years ended December 31, 2021 and 2020, not including lease payments, the Company made lab supply payments to Sanford Health (which is a shareholder of the Company) totaling approximately $ 108,000 and $ 152,000 , respectively. The Company had no related party payables with Sanford Health as of December 31, 2021 , and $ 10,000 of related party payables with Sanford Health as of December 31, 2020. As discussed in Note 10, Notes Payable , on February 24, 2016, the Company entered into a loan agreement with CLC for a $ 3.0 million revolving line of credit secured by a blanket security interest in the assets of the Company. The principal owners of CLC are owners, members of the board of directors, and former employees of the Company. In July 2020, the note payable was paid in full. Please refer to Note 10, Notes Payable , for additional information. (16) Employee Benefit Plan The Company sponsors a defined contribution retirement plan. All the Company’s employees are eligible to be enrolled in the employer-sponsored contributory retirement savings plan, which include features under Section 401(k) of the Internal Revenue Code of 1986, as amended, and provides for Company matching contributions. The Company’s contributions to the plan are determined by its Board of Directors, subject to certain minimum requirements specified in the plan. For the years ended December 31, 2021 and 2020 the Company made matching contributions of 100 % on 3 % of the employee contributions, with an additional 50 % match on the next 2 % of employee contributions, resulting in approximately $ 325,000 and $ 188,000 , re spectively, of matching contributions paid by the Company. (17) Commitments and Contingencies The Company is not a party to any litigation, and, to its best knowledge, no action, suit or proceeding has been threatened against the Company which are expected to have a material adverse effect on its financial condition, results of operations or liquidity. F- 27 (18) Joint Development Agreement In June 2019, the Company entered into a joint development agreement with the University of South Dakota Research Park, Inc. (“USDRP”) for the construction of a multi-tenant office building and a manufacturing building. Pursuant to the agreement, the Company also entered into a lease agreement for 41,195 square feet of leasable area located in the building. The lease will commence upon completion of the building for an initial term of 12 years at a monthly payment of approximately $ 118,000 . Aurochs, LLC, a wholly owned subsidiary, was founded to manage the construction funds for this project. All pre-construction costs up to a budgeted $ 2.7 million were paid directly by the Company and reimbursed by USDRP. As of December 31, 2021 and 2020 , USDRP has spent approximately $ 2.12 million in design costs for this facility, with approximately $ 580,000 of the $ 2.7 million budget remaining. There were no receivables or payables for this project as of December 31, 2021 and 2020. USDRP and the Company intend to secure outside funding for all expenses incurred after the pre-construction phase. If funding cannot be secured to finance the construction of this facility, the Company will not be required to refund any of the design costs incurred to date. Due to the work around SARS-2 and the JPEO contract (please refer to Note 5, Revenue , for additional information), this project is on hold as the Company focuses on development of our current internal manufacturing capabilities and completion of the JPEO contract work which will continue through the end of 2022. (19) Subsequent Events In January 2022, the Company received a final settlement notice related to the Forward Share Purchase Agreement. In conjunction with the final settlement, the Company repurchased 546,658 shares of common stock from Radcliffe at the Market Sales Price. The Company settled the repurchase with $ 5.5 million of the total $ 6.3 million held in restricted cash as of December 31, 2021 , with the remaining balance of $ 0.8 million released to the Company. As a result of the final settlement transaction, the forward share purchase liability was reduced to zero . On March 28, 2022, the Company entered into a Third Amendment to the Amended and Restated Lease Agreement with Sanford. The Third Amendment, among other things, provides for the least by the Company from Sanford of an additional 4,035 square feet of storage, laboratory and office space. The Third Amendment modifies the rent due under the Sanford Lease Agreement to $ 25.27 per square foot, or $ 841,061 due on an annual basis ($ 70,088 due on a monthly basis), until increased pursuant to the terms of the Sanford Lease Agreement. The associated amendment was retroactively applied to October 2021, and accounted for under ASC 842 as a separate right-of-use asset. The consolidated financial statements and Note 8, Leases , include the relevant adjustments for the Third Amendment. F- 28