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 not effective as of the end of the fiscal year covered by this Annual Report as a result of the material weaknesses in Internal Control over Financial Reporting described below.    Management’s Report on Internal Control over Financial Reporting   Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a- 15(f) and 15d-15(f) under the Exchange Act and based upon the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO framework”). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. GAAP.   An effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error or overriding of controls, and therefore can provide only reasonable assurance with respect to reliable financial reporting. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect all misstatements, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.   Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the COSO framework. Based on evaluation under these criteria and based upon the existence of the material weakness described below, management determined, that we did not maintain effective internal control over financial reporting as of December 31, 2022.   A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.   We identified deficiencies in the control environment component of the COSO Framework that constitute a material weakness:     ● We lack sufficient appropriate accounting and reporting knowledge to effectively perform review controls surrounding technical accounting matters and significant and/or unusual transactions.    84 Table of Contents   Management believes that the material weakness set forth above is the result of the scale of our operations, is intrinsic to our size, and intends to take remedial actions described below.   Plan for Remediation of Material Weakness   We continue to work to strengthen our internal control over financial reporting and are committed to ensuring that such controls are designed and operating effectively. We are implementing process and control improvements to address the above material weakness as follows:     ● We have supplemented existing accounting resources with external advisors to assist with performing certain technical accounting activities. We have hired an additional full-time employee with technical accounting expertise and public company experience. Management will continue to supplement existing internal resources as needed. In addition, Management will continue to review the qualifications of our finance organization to ensure our personnel have the appropriate technical and SOX related expertise.   ● We have begun the process of implementing a contract management platform that will integrate functions governing the initiation, authorization, and execution of contracts with enhancements for our existing contract review control. This tool will improve the ability of the finance organization to review new and renewed contracts for potential financial reporting implications.   We are committed to continuing to improve our internal control processes related to these matters and will continue to review our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address deficiencies or modify certain of the remediation measures described above.   Changes in Internal Control Over Financial Reporting   Other than as described above, there have been no changes in our internal control over financial reporting in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   Item 9B. Other Information.   On March 21, 2023, the Company entered into a settlement agreement with Ladenburg (the “2023 Ladenburg Agreement”, and the action brought by Ladenburg, the “Ladenburg Action”), effective March 23, 2023. In connection with the Ladenburg Agreement, on March 24, 2023, the Company (i) issued to Ladenburg a warrant to purchase up to 300,000 shares of common stock, exercisable for three years from the date of issuance at $0.5424 per share; and (ii) furnished to Ladenburg a one-time cash payment of $500,000. Pursuant to the terms and subject to the conditions set forth in the 2023 Ladenburg Agreement, the Company will (i) no later than June 30, 2023, pay $1.5 million to Ladenburg in cash or shares of common stock, at the Company’s option; and (ii) no later than December 31, 2023, pay $1.1 million to Ladenburg in cash or shares of common stock, at the Company’s option. Following the completion of the Company’s obligations under the Ladenburg Agreement, Ladenburg has agreed to dismiss the Ladenburg Action with prejudice and extinguish any and all obligations of the Company in connection therewith. Any issuance of securities under the Ladenburg Agreement has been made or shall be made pursuant to exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering, and Rule 506 of Regulation D promulgated under the Securities Act.   The Company notes the consideration due to Ladenburg under the 2023 Ladenburg Agreement, excluding the warrants issuable thereunder, are contained within the 2021 and 2022 audited consolidated balance sheets within accrued expenses and other current liabilities.   Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.   Not applicable.   85 Table of Contents     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   67   Class III Director Eddie J. Sullivan, PhD   57   Class III Director, President and Chief Executive Officer Jeffrey G. Spragens   81   Class II Director William Polvino, MD   62   Class I Director David Link, MBA   67   Class II Director Scott Giberson   53   Class I Director Erick Lucera   55   Class I Director Russell P. Beyer, MBA, CMA   68   Chief Financial Officer Christoph Bausch, PhD   52   Chief Science Officer Alexandra Kropotova, MD   50   Chief Medical 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.   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.   Christoph Bausch, PhD, MBA , is our Chief Operating Officer as of May 2022, overseeing all Research & Manufacturing operations of the company. Prior to his role as COO, he served as Chief Science Officer since joining SAB in April 2017, providing leadership in all areas of Research & Development, and functioned as drug development lead for a Stage 3 clinically advanced drug product. Dr. Bausch is an experienced research scientist, biotech entrepreneur and business development executive who has led the successful discovery, development, biomanufacturing, and commercialization of platform technologies in the life sciences. Previously, Dr. Bausch has served as founder and director of a molecular diagnostic company and has provided life science consulting for Keion Group, LLC. Dr. Bausch held several science-based business development positions prior to joining SAB, most recently for multi-billion-dollar global industrial biomanufacturing 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 received his PhD in Microbiology at The Ohio State University, Columbus, Ohio, completed Post-Doctoral Training at the Stowers Institute for Medical Research, Kansas City, Missouri and earned an MBA from St. Louis University, St. Louis, Missouri, in addition to a BA in Biology from the University of Nebraska-Lincoln, Lincoln, Nebraska.   86 Table of Contents   Alexandra Kropotova, M.D. , is our Executive Vice President & Chief Medical Officer, joining SAB in June, 2022 to lead the strategy, direction, and execution of the company’s clinical development for the entire portfolio. Dr. Kropotova is a biopharmaceutical executive with expertise in all phases of global clinical development, translational medicine and medical affairs. Prior to joining SAB Biotherapeutics, as a Therapeutic Area Head of Global Specialty R&D at Teva Pharmaceuticals, Alexandra led innovative drug development focused on delivering a broad portfolio of immunology, respiratory, and immuno-oncology assets spanning from pre-IND to BLA/NDA filing of biologics and complex drug-device combination products. Prior to Teva, Dr. Kropotova served in various roles at Sanofi, including Vice President, Strategy & Strategic Planning Head, North American Medical Affairs; Associate Vice President and subsequently Vice President, Immuno-Inflammation, Global R&D Clinical Development; and Senior Medical Director, Respiratory, Allergy & Anti-Infectives. She also served in various roles at Pfizer Inc., most recently as Director & Head of Global Clinical Respiratory and Analgesics. She continues to serve on the Board of Directors at iBio, a global leader in plant-based biologics manufacturing and development of novel biopharmaceuticals. Dr. Kropotova received her MBA from Ohio University Graduate School of Business, Athens, Ohio; and her M.D. in Internal Medicine from the Vladivostok State Medical University, Vladivostok, Russia.   Non-Employee Directors   Biographical information for Eddie J. Sullivan, our President, Chief Executive Officer and Class III director, and Samuel J. Reich, our Executive Chairman of the Board and Class III director, is set forth above in “Item 10. Executive Officers”.   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 owner and managing partner of Christiansen Land and Cattle, Ltd., a fourth-generation diversified farming and ranching enterprise. She also owns Dakota Packing, Inc., a wholesale company based in Las Vegas that provides high-end, "center-of-the-plate" protein products to a national customer base. Ms. Hamilton has served on the board of directors for several financial and public companies including HF Financial Corporation, Home Federal Bank (now Great Western Bancorp, NYSE: GWB) and, in 2018, was recognized for her exemplary service as a board member of the Federal Reserve Bank (Ninth District) after a four-year term. She currently serves as a board member for publicly traded Titan Machinery, Padlock Ranch, and Meadowlark Institute. Ms. Hamilton was a governor-appointed commissioner for South Dakota Game Fish & Parks and is a 2016 inductee to the South Dakota Hall of Fame for her contributions to the state and agribusiness. In 2000, Ms. Hamilton and her family formed the Matson Halverson Christiansen Hamilton Foundation (MHCH), a not-for-profit foundation with a mission to improve the quality of life and create opportunities for growth and enterprise development in South Dakota. Ms. Hamilton holds a philosophy degree from Smith College in Northampton, Massachusetts, and an MBA in entrepreneurship from the University of Arizona. Ms. Hamilton is well qualified to serve on our board of directors because of her extensive public company board experience.    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. Polvino is well qualified to serve on our board of directors because of his extensive experience in the biotechnology industry and his extensive public company management experience.    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. Mr. Link is well qualified to serve on our board of directors because of his extensive experience in the biotechnology industry and his extensive public company board experience.    87 Table of Contents   Scott Giberson, RPh, MPH, D.Sc., Rear Admiral (retired),  joined the SAB board of directors in July 2022. He is currently the President of AMI Expeditionary Healthcare, a private global healthcare solutions company where he fosters global client relations at the highest levels. Clients include senior leadership of multiple U.S. and foreign government entities, the WHO, UN and private industry partners such as the Gates Foundation. RADM Giberson retired after 27 years as two-star admiral and as an Assistant U.S. Surgeon General. RADM (ret.) Giberson served as the acting Deputy Surgeon General of the United States (2013-2014), he was the Surgeon General's principal liaison with health leadership in multiple U.S. Departments. He also held executive positions as the Senior Advisor to the Office of Surgeon General, Director of Commissioned Corps Headquarters, Chief Pharmacist of the USPHS (2010-2014), Director of the IHS National HIV/AIDS Program and Senior Public Health Advisor for Pacific Command's Center of Excellence in Disaster Management and Humanitarian Assistance (2003-2006). He served as overall Commander of the Commissioned Corps' Ebola Response in West Africa. RADM Giberson has authored numerous articles and delivered well over 100 keynote lectures on leadership, global health, and public health at numerous venues both domestically and internationally. RADM Giberson has received many awards including the Presidential Unit Citation from President Obama in the Oval Office for leadership during the West African Ebola response. The Military Officers Association of America selected him as on the of the "Top 100 Veterans in the Last 100 Years You Need to Know". RADM Giberson is a graduate of Temple University and U. of Massachusetts/Amherst, holds a Pharmacy degree and licensure, MPH, and graduate certificate in Health Emergencies in Large Populations from the International Committee of the Red Cross. He has received three honorary Doctoral degrees (one for his pioneering work in interprofessional practice). He is also a Fellow of Wharton Business School (U. of Pennsylvania) Executive Leadership Program. Mr. Giberson is well qualified to serve on our board of directors because of his extensive experience in the medical industry.    Erick Lucera , joined the SAB board of directors in April 2023. From 2020 to February 2023, Mr. Lucera served as Chief Financial Officer of AVEO Oncology, a public biotech company, and subsequent to the close of its acquisition, worked on integration with LG Chem, Ltd. From 2016 to 2020, Mr. Lucera served as Chief Financial Officer, Treasurer and Secretary of VALERITAS, a publicly traded commercial-stage medical technology company where he led multiple successful public offerings. From 2017 to the present, Mr. Lucera has served as a member of the Board of Directors and Audit Committee Chairman of Beyond Air, a publicly held commercial-stage medical device and biopharmaceutical company developing a platform of nitric oxide generators and delivery systems. From 2021 to the present, Mr. Lucera has served as a member of the Board of Directors and Audit Committee Chairman of Bone Biologics Corporation, a publicly held company focusing on regenerative medicine therapies to treat bone disorders. From 2015 to 2016, Mr. Lucera served as Chief Financial Officer, Treasurer and Secretary of VIVENTIA Bio, acquired by Eleven Biotherapeutics, Inc., now Sesen Bio, a biotechnology company focused on developing targeted protein therapeutics for the treatment of cancer. Early in his career, Mr. Lucera spent more than 15 years covering healthcare and the life sciences in investment management. Given Mr. Lucera’s extensive experience in strategic planning and finance, we believe that Mr. Lucera is well qualified to serve as a member of the Board of Directors.   Director Independence   The listing rules of Nasdaq require us to maintain a board of directors comprised of a majority of independent directors, as determined affirmatively by our board of directors. In addition, the Nasdaq listing rules require that, subject to specified exceptions, each member of our audit, compensation and nominating and corporate governance committees must be independent. Audit committee members and compensation committee members must also satisfy the independence criteria set forth in Rule 10A-3 and Rule 10C-1, respectively, under the Exchange Act. Under the Nasdaq listing rules, a director will only qualify as an “independent director” if, in the opinion of our board of directors, the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out his or her responsibilities.   Our board of directors has undertaken a review of the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that none of Christine Hamilton, Jeffrey Spragens, William Polvino, David Link, Scott Giberson. and Erick Lucera (representing six of our eight directors), has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that they each are an “independent director” as that term is defined under the Nasdaq listing rules.   In making these determinations, our board of directors considered the relationships that each nonemployee director has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence, including consulting relationships, family relationships and the beneficial ownership of our capital stock by each non-employee director.   Board Composition   Our business and affairs are organized under the direction of our board of directors. Our board currently consists of eight (8) 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, 2025;   ● 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.   Messrs. Dr. Polvino, Mr. Lucera and Mr. Giberson 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 2022, our board of directors held 6 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.   88 Table of Contents   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, David Link, and Erick Lucera serve 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.   The audit committee charter is available on the corporate governance section of our website, which is located at https://ir.sab.bio/static-files/a6bd0fd3-9f6f-4927-9a79-806338ec0ee9   Compensation Committee   On October 22, 2021, we established a compensation committee of the board of directors. Christine Hamilton, Scott Giberson and William Polvino serve 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 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 Annual Report, 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.   89 Table of Contents   Compensation Committee Interlocks and Insider Participation   No person who served as a member of the compensation committee during the fiscal year ended December 31, 2022 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, 2022, 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.   The compensation committee charter is available on the corporate governance section of our website, which is located at https://ir.sab.bio/static-files/3f29e14f-e5da-45b5-9844-20a98ba5f4cd   Nominating Committee   On October 22, 2021, we established a nominating committee of the board of directors. David Link, Christine Hamilton, Scott Giberson and Jeff Spragens 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 and Mr. Spragens 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, diversity, 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.   The nominating committee charter is available on the corporate governance section of our website, which is located at https://ir.sab.bio/static-files/3f29e14f-e5da-45b5-9844-20a98ba5f4cd   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.   Board Diversity   Effective corporate governance is critical for both our long-term performance and maintaining stockholder trust. Our board of directors is responsible for overseeing the governance, strategy and operation of the Company. Our eight directors come from diverse backgrounds, drawing on their substantial experience across industries and professional designations, including experience related to: biotechnology and pharmaceutical; finance, including investment management and capital markets; healthcare and medical services and operations; philanthropy; public accounting; and higher education.   Board Leadership Structure   Our board of directors is currently chaired by Samuel Reich. Our board of directors believes that we and our stockholders are currently best served by this leadership structure. As Executive Chairman, Mr. Reich promotes unified leadership and direction for our board of directors and management and provides the critical leadership necessary for carrying out our strategic initiatives. Mr. Reich, together with our board of director’s strong committee system and independent directors, allows our board of directors to maintain effective oversight of our business operations, including independent oversight of our financial statements, executive compensation, selection of director candidates, and corporate governance programs. We believe our current board of director’s leadership structure enhances its ability to effectively carry out its roles and responsibilities on behalf of our stockholders.   Role of Board in Risk Oversight Process   Our board of directors has an active role, as a whole and also at the committee level, in overseeing risk management. Our board of directors is responsible for general oversight and regular review of risk management, including financial, strategic, and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, and whether our compensation policies and programs have the potential to encourage excessive risk taking. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting. The nominating committee is responsible for overseeing our corporate governance practices and the management of risks associated with board of director independence and potential conflicts of interest. Although each committee is responsible for evaluating and overseeing the management of certain risks, the entire board of directors is regularly informed through discussions from committee members about such risks. The board of directors believes its leadership structure is consistent with and supports the administration of its risk oversight function.   90 Table of Contents   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, 2022, 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 Conduct and Ethics (the "Code of Ethics") applicable to our directors, officers, and employees. A copy of our Code of Ethics is available on our website at https://ir.sab.bio/static-files/cf6414d7-b1d5-40d6-83f9-f7598094d99.   In addition, a copy of the Code of Ethics will be provided without charge by making a written request and mailing it to our corporate headquarters offices to the attention of the Investor Relations Department.   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.   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, 2022 and 2021.         Salary     Option Awards (1)       Stock Awards (2)       Non-Equity Incentive Plan Compensation     All Other Compensation     Total   Name and Principal Position Year   ($)     ($)       ($)       ($)     ($)     ($)   Eddie J. Sullivan, PhD. 2022     377,200       44,725   (3)     —         42,435       10,982       475,342   President and Chief Executive Officer 2021     376,154       —         —         140,000       9,750       525,904   Samuel J. Reich 2022     350,000       304,600   (4)     —         14,000       12,200       680,800   Executive Chairman of the Board of Directors 2021     52,731       2,741,235         —         —       1,660       2,795,626   Alexandra Kropotova, MD 2022     282,692       13,029         567,000   (5)     —       2,423       865,144   EVP, Chief of Medical Officer 2021     —       —         —         —       —       —     (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, 2022 set forth in this Annual Report. These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented.     (2) Represents the aggregate grant date fair value of restricted stock units granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. Restricted stock units are valued at market price of the Company’s common stock at the closing price at the date of grant. These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented.     (3) We granted Eddie Sullivan a stock option to purchase up to 21,218 shares of our common stock at an exercise price of $1.78 per share, the closing price of our common stock on March 16, 2022. The shares subject to this stock option award will vest 100% of the shares on the one-year anniversary of the grant date and We granted Eddie Sullivan a stock option to purchase up to 35,000 shares of our common stock at an exercise price of $0.71 per share, the closing price of our common stock on September 13, 2022. The shares subject to this stock option will vest as to 25% of the shares one-year anniversary of the grant date, and vest as to the remainder of the shares in 36 equal monthly installments thereafter.     (4) We granted Samuel J. Reich a stock option to purchase up to 7,000 shares of our common stock at an exercise price of $1.78 per share, the closing price of our common stock on March 16, 2022. The shares subject to this stock option award will vest 100% of the shares on the one-year anniversary of the grant date and We granted Samuel J. Reich a stock option to purchase up to 525,000 shares of our common stock at an exercise price of $0.71 per share, the closing price of our common stock on September 13, 2022. The shares subject to this stock option will vest as to 25% of the shares one-year anniversary of the grant date, and vest as to the remainder of the shares in 36 equal monthly installments thereafter.     (5) We granted Alexandra Kropotova 300,000 restricted shares of our common stock under our 2021 Equity Incentive Plan. The shares subject to this stock award will vest as to 25% of the RSU’s on the one-year anniversary of the grant date, and the remainder of the RSU’s in 36 equal monthly installments thereafter.   91 Table of Contents   Outstanding Equity Awards at Fiscal 2022 Year-End   The following table sets forth information regarding outstanding equity awards held by our named executive officers as of December 31, 2022.       Option Awards     Stock Awards   Name   Number of Securities Underlying Unexercised Options (#) Exercisable     Number of Securities Underlying Unexercised Options (#) Unexercisable       Option Exercise Price ($)     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       —         —         —       21,218   (1)     1.78     3/16/2032       —         —         —       35,000   (2)     0.71     9/13/2032       —         —   Samuel J. Reich     136,110       213,890   (3)     11.17     11/16/2031       —         —         —       7,000   (4)     1.78     3/16/2032       —         —         —       525,000   (5)     0.71     9/13/2032       —         —   Alexandra Kropotova, MD     —       18,325   (6)     0.71     9/13/2032       —         —         —       —         —       —       300,000   (7)     177,000     (1) The shares subject to this stock option award will vest 100% of the shares on the one-year anniversary of the grant date.     (2) The shares subject to this stock option award will vest as to 25% of the shares on one-year anniversary of the grant date, and vest as to the remainder of the shares in 36 equal monthly installments thereafter.     (3) The shares subject to this stock option award will vest in 22 equal monthly installments.     (4) The shares subject to this stock option award will vest 100% of the shares on the one-year anniversary of the grant date.     (5) The shares subject to this stock option award will vest as to 25% of the shares on one-year anniversary of the grant date, and vest as to the remainder of the shares in 36 equal monthly installments thereafter.     (6) The shares subject to this stock option award will vest as to 25% of the shares on one-year anniversary of the grant date, and vest as to the remainder of the shares in 36 equal monthly installments thereafter.     (7) The shares subject to this stock award will vest as to 25% of the RSU’s on the one-year anniversary of the grant date, and the remainder of the RSU’s in 36 equal monthly installments thereafter.   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 1 st 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.   92 Table of Contents   Alexandra Kropotova   On May 20, 2022, we entered into an Executive Employment Agreement with Dr. Kropotova to serve as our Executive Vice President – Chief Medical Officer.  The agreement provides Dr. Kropotova an annual base salary of $525,000, and her eligibility to participate in the Company’s benefit plans generally.  The agreement also subjects Dr. Kropotova to standard nondisclosure, invention assignment, and arbitration provisions.  If Dr. Kropotova’s employment is terminated by the Company without Cause (as defined in the employment agreement) (other than for death or disability) or the term of her employment is not renewed, Dr. Kropotova will receive (i) the applicable accrued but unpaid Annual Bonus, if any, for the calendar year ended prior to her Date of Termination payable at the same time annual bonuses for such calendar year are paid to other key Employees of the Company pursuant to the terms of the Bonus Plan (ii) one hundred percent (100%) of the Employee’s outstanding unvested Equity Awards as of the Date of Termination will be fully vested and exercisable (iii) a severance payment payable in a single lump sum within five (5) business days after the Employee’s Release becomes final, binding and irrevocable in accordance with Section 10 of the Employment Agreement, in an amount equal to twelve (12) months of Base Salary (iv) Reimbursement of the COBRA premiums, if any, paid by the Employee for continuation coverage for the Employee, her spouse and dependents under the Company’s group health, dental and vision plans for six (6) month period from the Date of Termination.   Summary Director Compensation Table   The following table sets forth information regarding the compensation awarded to, earned by or paid to our directors for the fiscal year ended December 31, 2022.       Fees Earned                               or Paid in Cash     Option Awards (1)     Stock Awards (2)     Total   Name   ($)     ($)     ($)     ($)   Samuel J. Reich     —       304,600       —       304,600   Christine Hamilton, MBA     25,000       —       —       25,000   Eddie J. Sullivan, PhD     —       44,725       —       44,725   Jeffrey G. Spragens     23,408       —       —       23,408   William Polvino, MD     25,000       —       —       25,000   David Link, MBA     25,000       —       —       25,000   Scott Giberson     5,928       14,000       —       19,928   Erick Lucera     —       —       —       —     (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, 2022 set forth in this Annual Report. These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented.     (2) Represents the aggregate grant date fair value of restricted stock units granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. Restricted stock units are valued at market price of the Company’s common stock at the closing price at the date of grant. These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented.   SAB Biotherapeutics, Inc. 2021 Omnibus Equity Incentive Plan   The SAB Biotherapeutics, Inc. 2021 Omnibus 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.   93 Table of Contents   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.   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;   ● 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.   94 Table of Contents   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.   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.   95 Table of Contents   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.   SAB Biotherapeutics, Inc. 2021 Employee Stock Purchase Plan   The SAB Biotherapeutics, Inc. 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, 2022, the Company had approximately 53 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 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.   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).   96 Table of Contents   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.   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.   97 Table of Contents   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."   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, 2022, 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                                         Alexandra Kropotova, MD     525,000       —       —       —       525,000   EVP, Chief of Medical Officer                                           98 Table of Contents   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 March 28. 2023, 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 50,397,762 shares of common stock outstanding as of March 28, 2023. Shares of common stock subject to warrants, options or rights currently exercisable, or exercisable within 60 days of March 28, 2023 are counted as beneficially owned by the selling stockholder.   Beneficial Owner   Number of Shares Beneficially Owned     Percentage of Common Stock Beneficially Owned   Five Percent Stockholders                 Christine Hamilton, MBA (1)     8,717,861       17.1 % Eddie J. Sullivan, PhD (2)     5,740,331       11.3 %                   Executive Officers and Directors                 Christine Hamilton, MBA (1)     8,717,861       17.1 % Eddie J. Sullivan, PhD (2)     5,740,331       11.3 % Samuel J. Reich (3)     957,388       1.9 % Jeffrey G. Spragens (4)     414,925       * % William Polvino, MD (5)     116,320       * % David Link, MBA (6)     150,834       * % Scott Giberson (7)     6,944       * % Erick Lucera     —       * % All current executive officers and directors as a group (11)     16,451,442       31.5 %   (1) Consists of (i) 4,993,090 shares of common stock held by Ms. Hamilton; (ii) 174,248 shares of common stock held as a co-owner by Ms. Hamilton with her spouse, Dr. Edward Hamilton; (iii) 2,909,022 shares of common stock held by Ms. Hamilton’s spouse, Dr. Edward Hamilton; (iv) 25,000 shares held by Christiansen Investments; (v) 151,216 shares of common stock underlying stock options held by Ms. Hamilton exercisable within 60 days of March 28, 2023; and (vi) 465,285 shares of common stock underlying stock options held by her spouse, Dr. Edward Hamilton, exercisable within 60 days of March 28, 2023. Ms. 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. Ms. Hamilton disclaims beneficial ownership of such securities except to the extent of her pecuniary interest therein, directly or indirectly.   (2) Consists of (i) 5,230,564 shares of common stock held by Dr. Sullivan; and (ii) 509,767 shares of common stock underlying stock options held by Dr. Sullivan exercisable within 60 days of March 28, 2023.   (3) Consists of (i) 207,001 shares of common stock held by Mr. Reich; (ii) 1,000 shares of common stock held jointly by Mr. Reich and Mr. Reich’s spouse; (iii) 547,698 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 Business Combination Closing Date; (iv) 9,968 shares of common stock underlying warrants that are currently exercisable; and (v) 191,721 shares of common stock underlying stock options held by Mr. Reich exercisable within 60 days of March 28, 2023. 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 (i) 95,987 shares of common stock held by Mr. Spragens; (ii) 299,002 shares of common stock distributed to Mr. Spragens as a member of Big Cypress Holdings, LLC; and (iii) 19,936 shares of common stock underlying warrants that are currently exercisable.   (5) Consists of 116,320 shares of common stock underlying stock options held by Dr. Polvino exercisable within 60 days of March 28, 2023.   (6) Consists of (i) 57,313 shares of common stock held by Mr. Link; (ii) 12,097 of shares of common stock held by Iron Horse Investments, LLC; and (iii) 81,424 shares of common stock underlying stock options held by Mr. Link exercisable within 60 days of March 28, 2023. 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   (7) Consists of 6,944 shares of common stock underlying stock options held by Mr. Giberson exercisable within 60 days of March 28, 2023.    99 Table of Contents   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 the lesser of $120,000 and one percent of the average of our total assets at year-end for the last two completed fiscal years, 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.   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.   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.   100 Table of Contents   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, 2021 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.   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.   Item 14. Principal Accounting Fees and Services.   The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2022 and 2021 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) 2022   2021 Audit fees $ 710,644   $ 662,887 Audit-related fees   —     — Tax fees   —     — All other fees   —     — Total $ 710,644   $ 662,887   Audit fees for the fiscal years ended December 31, 2022 and 2021 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.   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.   101 Table of Contents     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 Annual Report, 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¥ Executive Employment Agreement, dated November 17, 2021, by and between SAB Biotherapeutics, Inc. and Samuel J. Reich 8-K 001-39871 10.1¥ November 12, 2021 10.4¥ Employment Agreement, dated September 15, 2021, by and between SAB Biotherapeutics, Inc. and Russell Beyer.  8-K 001-39871 10.5¥* October 28, 2021 10.5¥* A. Kropotova Agreement.         10.6 Form of Indemnification Agreement. 8-K 001-39871 10.6 October 28, 2021 10.7¥ SAB Biotherapeutics, Inc. 2021 Omnibus Equity Incentive Plan. 8-K 001-39871 10.7 ¥ October 28, 2021 10.8¥ SAB Biotherapeutics, Inc. 2021 Employee Stock Purchase Plan. 8-K 001-39871 10.8 ¥ October 28, 2021 10.9 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 10.10 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 10.11 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   102 Table of Contents   10.11 BCYP Stockholders Support Agreement. S-4 333-258869 10.7 September 22, 2021 10.13 SAB Stockholders Support Agreement. S-4 333-258869 10.8 September 22, 2021 10.14 Third Amendment to Amended and Restated Lease Agreement         10.15 Fourth Amendment to Amended and Restated Lease Agreement 8-K 001-39871 10.1 October 13, 2022 10.16*** Manufacturing Option Agreement, dated October 26, 2022 8-K 001-39871 10.1 November 1, 2022 10.17*** Right of First Refusal Agreement, dated October 26, 2022 8-K 001-39871 10.2 November 1, 2022 10.18 Securities Purchase Agreement dated December 6, 2022, by and between the Company and the purchasers thereto 8-K 001-39871 10.1 December 12, 2022 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.         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. **In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. **** Certain portions of this exhibit (indicated by “[***]”) have been redacted pursuant to Regulation S-K, Item 601(b)(10)(iv). + 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.   103 Table of Contents   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: April 14, 2023   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   Director and Chief Executive Officer   April 14, 2023 Eddie J. Sullivan   (Principal Executive Officer)               /s/ Russell Beyer   Chief Financial Officer   April 14, 2023 Russell Beyer   (Principal Financial Officer and Principal Accounting Officer)               /s/ Samuel J. Reich   Director and Executive Chairman   April 14, 2023 Samuel J. Reich                   /s/ Christine Hamilton, MBA   Director   April 14, 2023 Christine Hamilton, MBA                   /s/ David Charles Link   Director   April 14, 2023 David Charles Link                   /s/ William Polvino, MD, PhD   Director   April 14, 2023 William Polvino, MD, PhD                   /s/ Jeffrey G. Spragens   Director   April 14, 2023 Jeffrey G. Spragens                   /s/ Scott Giberson   Director   April 14, 2023 Scott Giberson                   /s/ Erick Lucera   Director   April 14, 2023 Erick Lucera           104 Table of Contents   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS     Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 (Restated) F-3 Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 F-4 Consolidated Statements of Changes In Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 (Restated) F-6 Notes to Consolidated Financial Statements F-7     F-1 Table of Contents   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, 2022 and 2021, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2022, 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, 2022 and 2021, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.   Going Concern Uncertainty   The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company does not generate sufficient cash flows from operations to maintain operations and, therefore, is dependent on additional financing to fund operations.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the financial statements. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.   Restatement of 2021 Financial Statements   As discussed in Note 2 to the financial statements, the 2021 financial statements have been restated to correct certain misstatements.   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 April 14, 2023   F-2 Table of Contents     SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Balance Sheets       December 31, 2022     December 31, 2021 (Restated)                   Assets                 Current assets                 Cash and cash equivalents   $ 15,046,894     $ 33,206,712   Restricted cash     —       6,338,306   Accounts receivable, net     5,556,577       8,010,708   Prepaid expenses     1,493,982       2,636,224   Total current assets     22,097,453       50,191,950   Long-term prepaid insurance     467,694       —   Operating lease right-of-use assets     1,192,054       2,615,204   Financing lease right-of-use assets     3,896,873       4,019,322   Property, plant and equipment, net     23,250,853       24,314,455   Total assets   $ 50,904,927     $ 81,140,931   Liabilities and Stockholders’ Equity                 Current liabilities                 Accounts payable   $ 3,679,116     $ 4,458,525   Forward share purchase liability     —       6,338,306   Notes payable     772,665       1,796,724   Operating lease liabilities, current portion     490,794       1,142,413   Finance lease liabilities, current portion     132,788       161,050   Due to related party     —       2,367   Deferred grant income     —       100,000   Accrued expenses and other current liabilities     9,917,981       12,455,888   Total current liabilities     14,993,344       26,455,273   Operating lease liabilities, noncurrent     361,225       1,653,185   Finance lease liabilities, noncurrent     3,629,642       3,762,430   Warrant liabilities     320,930       10,720,130   Convertible Debt     541,644       —   Total liabilities     19,846,785       42,591,018   Commitments and contingencies (Note 18)                     Stockholders’ equity                 Preferred stock; $ 0.0001 par value; 10,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively     —       —   Common stock; $ 0.0001 par value; 490,000,000 shares authorized at December 31, 2022 and December 31, 2021; 50,940,920 and 43,487,279 shares issued, respectively, and 50,394,262 and 43,487,279 outstanding at December 31, 2022 and December 31, 2021, respectively     5,094       4,349   Treasury stock, at cost; 546,658 and 0 shares held at December 31, 2022 and December 31, 2021, respectively     ( 5,521,246 )     —   Additional paid-in capital     84,444,049       67,674,515   Accumulated deficit     ( 47,869,755 )     ( 29,128,951 ) Total stockholders’ equity     31,058,142       38,549,913   Total liabilities and stockholders’ equity   $ 50,904,927     $ 81,140,931     See accompanying notes to the consolidated financial statements   F-3 Table of Contents   SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Statements of Operations         Year Ended December 31,       2022     2021   Revenue                 Grant revenue   $ 23,904,181     $ 60,876,078   Total revenue     23,904,181       60,876,078   Operating expenses                 Research and development     36,438,513       57,183,589   General and administrative     16,383,285       17,085,692   Total operating expenses     52,821,798       74,269,281   Loss from operations     ( 28,917,617 )     ( 13,393,203 ) Other income (expense)                 Changes in fair value of warrant liabilities     10,399,200       ( 4,151,068 ) Gain on debt extinguishment of Paycheck Protection Program SBA Loan     —       665,596   Other income     33,754       5,488   Interest expense     ( 301,584 )     ( 294,459 ) Interest income     71,072       23,115   Total other income (expense)     10,202,442       ( 3,751,328 ) Loss before income taxes     ( 18,715,175 )     ( 17,144,531 ) Income tax expense     25,629       —   Net loss   $ ( 18,740,804 )   $ ( 17,144,531 ) Loss per common share attributable to the Company’s shareholders                 Basic and diluted loss per common share   $ ( 0.43 )   $ ( 0.63 ) Weighted-average common shares outstanding – basic and diluted     43,524,971       27,339,180     See accompanying notes to the consolidated financial statements.   F-4 Table of Contents     SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Statements of Changes In Stockholders ’ Equity (Deficit) For the years ended December 31, 2022 and 2021                                                                                                                           Common stock             Treasury Stock                       Shares     Amount     Additional Paid-In Capital     Shares     Amount     Accumulated Deficit     Total Stockholders’ Equity   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   Forward Share Purchase Agreement, final settlement     —       —       817,060       —       —       —       817,060   Repurchase of common stock pursuant to the Forward Share Purchase Agreement     —       —       5,521,246       ( 546,658 )     ( 5,521,246 )     —       —   Stock-based compensation     —       —       2,674,204       —       —       —       2,674,204   Issuance of common stock for exercise of stock options     90,264       9       76,962       —       —       —       76,971   Issuance of common stock and warrants under private placement offering, net of issuance costs of $ 0.3 million     7,363,377       736       7,680,062       —       —       —       7,680,798   Net loss     —       —       —       —       —       ( 18,740,804 )     ( 18,740,804 ) Balance at December 31, 2022     50,940,920     $ 5,094     $ 84,444,049       ( 546,658 )   $ ( 5,521,246 )   $ ( 47,869,755 )   $ 31,058,142     See accompanying notes to the consolidated financial statements.   F-5 Table of Contents     SAB Biotherapeutics, Inc. and Subsidiaries Consolidated Statements of Cash Flows       Year Ended December 31,       2022     2021 (Restated)   Cash flows from operating activities:                 Net loss   $ ( 18,740,804 )   $ ( 17,144,531 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                 Gain on debt extinguishment of Paycheck Protection Program SBA Loan     —       ( 665,596 ) Depreciation and amortization     3,169,429       1,488,614   Amortization of right-of-use assets     122,449       164,983   Stock-based compensation expense     2,674,203       2,314,682   Gain on sale of equipment     ( 15,805 )     ( 5,488 ) Gain on partial lease termination     ( 32,208 )     —   Changes in fair value of warrant liabilities     ( 10,399,200 )     4,151,068   Changes in operating assets and liabilities                 Accounts receivable     2,454,131       12,558,790   Prepaid expenses     674,552       ( 1,258,348 ) Operating lease right-of-use assets     53,441       ( 63,626 ) Accounts payable     ( 779,425 )     ( 2,935,521 ) Due to related party     ( 2,367 )     ( 2,727 ) Deferred grant income     ( 100,000 )     —   Accrued expense and other current liabilities     ( 2,537,907 )     3,384,573   Net cash (used in) provided by operating activities     ( 23,459,511 )     1,986,873                     Cash flows from investing activities:                 Proceeds from the sale of property, plant and equipment     76,390       —   Purchases of property, plant and equipment     ( 2,166,414 )     ( 10,943,657 ) Net cash used in investing activities     ( 2,090,024 )     ( 10,943,657 )                   Cash flows from financing activities:                 Proceeds from Business Combination, net of transaction costs     —       34,340,225   Proceeds from issuance of notes payable     1,236,125       2,840,619   Payments on notes payable     ( 2,260,183 )     ( 1,093,051 ) Payments related to the Forward Share Purchase Agreement     ( 5,521,246 )     —   Principal payments on finance leases     ( 161,055 )     ( 203,124 ) Proceeds from exercise of stock options     76,971       6,750   Proceeds from issuance of common stock     7,680,799       —   Net cash used in financing activities     1,051,411       35,891,419                     Net increase (decrease) in cash, cash equivalents, and restricted cash     ( 24,498,124 )     26,934,635   Cash, cash equivalents, and restricted cash                 Beginning of year     39,545,018       12,610,383   End of period   $ 15,046,894     $ 39,545,018                       See accompanying notes to the consolidated financial statements.   F-6 Table of Contents   SAB BIOTHERAPEUTICS, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   ( 1 ) Nature of Business   On October 22, 2021 ( the "Closing Date"), the Company 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 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, BCYP 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.   Going Concern   As of December 31, 2022 , the Company has experienced net losses, negative cash flows from operations and had an accumulated deficit of $ 47.9  million. The Company anticipates to continue to generate losses for the foreseeable future, and expects the losses to increase as the Company continues the development of, and seek regulatory approvals for, product candidates, and begin commercialization of products. As a result, the Company will require additional capital to fund operations in order to support long-term plans, in particular, following the JPEO Rapid Response Contract Termination. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the one -year period following the date that these financial statements were issued.   To continue as a going concern, the Company will need, among other things, to raise additional capital resources. The Company plans to seek additional funding through a combination of equity or debt financings, or other third -party financing, collaborative or other funding arrangements. Should the Company seek additional financing from outside sources, the Company may not be able to raise such financing on terms acceptable to the Company or at all. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate the Company's assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.   The consolidated financial statements as of December 31, 2022 , have been prepared on the basis that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability for the Company to continue as a going concern.     ( 2 ) Restatement of Financial Statements   In March 2023, the Audit Committee of the Company’s Board of Directors and the Company’s management concluded that the Company’s previously issued audited financial statements contained within the Annual Report on Form 10 -K for the year ended December 31, 2021 ( the “Prior Year Financial Statements”), and the Company's previously issued interim financial statements included in the Company's Quarterly Reports on Forms 10 -Q for the three months ended March 31, 2022, the six months ended June 30, 2022, and nine months ended September 30, 2022 ( the “Prior Period Interim Financial Statements”), should no longer be relied upon as a result of the following accounting errors:     ● The Company concluded that it did not correctly account for a financed insurance premium whereby a third -party lender prepaid the Company's annual insurance premiums to our insurance companies in exchange for a short-term interest bearing note (the “Insurance Financing Agreement”). The Company previously recognized, on its consolidated balance sheet, a current prepaid asset for the amount paid by the Company under the Insurance Financing Agreement in excess of the total amortized value of the prepaid insurance policy. The Company reassessed its accounting for the Insurance Financing Agreement and determined that the Insurance Financing Agreement should be classified as a current note payable with the full amount of the insurance premium recognized as current prepaid asset at the time the Company entered into the Insurance Financing Agreement.          ● The Company concluded that the Insurance Financing Agreement and corresponding payment to the third -party lender constitutes a constructive receipt and disbursement of cash. As a result, the Company determined the cash flows from financing activities contained within the Prior Year Financial Statements is understated—this error is accompanied by a corresponding overstatement in cash flows from operating activities due to an understated prepaid asset.         ● Similar to the above assessment, the Company concluded that the cash payments to the third -party lender should be presented within cash flows from financing activities. As a result, the Company determined the cash flows from financing activities contained within the Prior Period Interim Financial Statements are overstated—this error is accompanied by a corresponding understatement in cash flows from operating activities due to the derecognition of the previously unrecognized prepaid asset.   F- 7 Table of Contents   Impact of the Restatement   The Company has restated herein its audited financial statements at December 31, 2022 for the year ended December 31, 2021. We have also restated interim financial statement periods for the  three months ended March 31, 2022, the six months ended June 30, 2022, and nine months ended September 30, 2022, See Note 21, Quarterly Financial Information (Unaudited) .       December 31, 2021       As Previously Reported     Adjustment     As Restated   Assets                         Current assets                         Cash and cash equivalents   $ 33,206,712     $ —     $ 33,206,712   Restricted cash     6,338,306       —       6,338,306   Accounts receivable, net     8,010,708       —       8,010,708   Prepaid expenses     864,513       1,771,711       2,636,224   Total current assets     48,420,239       1,771,711       50,191,950   Operating lease right-of-use assets     2,615,204       —       2,615,204   Financing lease right-of-use assets     4,019,322       —       4,019,322   Equipment, net     24,314,455       —       24,314,455   Total assets   $ 79,369,220     $ 1,771,711     $ 81,140,931   Liabilities and Stockholders’ Equity                         Current liabilities                         Accounts payable   $ 4,458,525     $ —     $ 4,458,525   Forward share purchase liability     6,338,306       —       6,338,306   Notes payable – current portion     25,013       1,771,711       1,796,724   Operating lease liabilities, current portion     1,142,413       —       1,142,413   Finance lease liabilities, current portion     161,050       —       161,050   Due to related party     2,367       —       2,367   Deferred grant income     100,000       —       100,000   Accrued expenses and other current liabilities     12,455,888       —       12,455,888   Total current liabilities     24,683,562       1,771,711       26,455,273   Operating lease liabilities, noncurrent     1,653,185       —       1,653,185   Finance lease liabilities, noncurrent     3,762,430       —       3,762,430   Warrant liabilities     10,720,130       —       10,720,130   Notes payable, noncurrent     —       —       —   Total liabilities     40,819,307       1,771,711       42,591,018   Commitments and contingencies (Note 17)                               Stockholders’ equity                         Preferred stock; $ 0.0001 par value; 10,000,000 shares authorized, 0 shares issued 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       —       4,349   Additional paid-in capital     67,674,515       —       67,674,515   Accumulated deficit     ( 29,128,951 )     —       ( 29,128,951 ) Total stockholders’ equity     38,549,913       —       38,549,913   Total liabilities and stockholders’ equity   $ 79,369,220     $ 1,771,711     $ 81,140,931     F- 8 Table of Contents       Year Ended December 31, 2021       As Previously Reported     Adjustment     As Restated   Cash flows from operating activities:                         Net (loss) income   $ ( 17,144,531 )   $ —     $ ( 17,144,531 ) 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 )     —       ( 665,596 ) Depreciation and amortization     1,488,614       —       1,488,614   Amortization of right-of-use assets     164,983       —       164,983   Stock-based compensation expense     2,314,682       —       2,314,682   Gain on sale of equipment     ( 5,488 )     —       ( 5,488 ) Changes in fair value of warrant liabilities     4,151,068       —       4,151,068   Changes in operating assets and liabilities                         Accounts receivable     12,558,790       —       12,558,790   Prepaid expenses     513,363       ( 1,771,711 )     ( 1,258,348 ) Right-of-use assets – operating lease     ( 63,626 )     —       ( 63,626 ) Accounts payable     ( 2,935,521 )     —       ( 2,935,521 ) Deferred income     —       —       —   Due to related party     ( 2,727 )     —       ( 2,727 ) Accrued expense and other current liabilities     3,384,573       —       3,384,573   Net cash provided by operating activities     3,758,584       ( 1,771,711 )     1,986,873                             Cash flows from investing activities:                         Proceeds from the sale of equipment     —       —       —   Purchases of equipment     ( 10,943,657 )     —       ( 10,943,657 ) Net cash used in investing activities     ( 10,943,657 )     —       ( 10,943,657 )                           Cash flows from financing activities:                         Proceeds from Business Combination, net of transaction costs     34,340,225       —       34,340,225   Proceeds from issuance of notes payable     —       2,840,619       2,840,619   Payments of notes payable     ( 24,143 )     ( 1,068,908 )     ( 1,093,051 ) Principal payments on finance leases     ( 203,124 )     —       ( 203,124 ) Proceeds from exercise of stock options     6,750       —       6,750   Net cash provided by financing activities     34,119,708       1,771,711       35,891,419                             Net increase in cash, cash equivalents, and restricted cash     26,934,635       —       26,934,635   Cash, cash equivalents, and restricted cash                         Beginning of year     12,610,383       —       12,610,383   End of year   $ 39,545,018     $ —     $ 39,545,018     F- 9 Table of Contents     ( 3 ) 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. 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; and   ● the operations of SAB comprise the ongoing operations of the Company.   Emerging growth company status   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.     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. Additional funding may be needed to cover operational costs as the Company moves forward with the Company's 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 prior to becoming a public company, determination of the fair value of the Company's warrants, 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.   F- 10 Table of Contents   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   Certain of the Company's financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to the short-term nature of their maturities, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses.    The Company accounts for warrants to purchase its common stock pursuant to ASC Topic 470, Debt , and ASC Topic 480, Distinguishing Liabilities from Equity , and classifies warrants for common stock as liabilities or equity. The warrants classified as liabilities are reported at their estimated fair value (see Note 14  -  Fair Value Measurements ) and any changes in fair value are reflected in other income and expense. The warrants classified as equity are reported at their estimated relative fair value with no subsequent remeasurement. The Company’s outstanding warrants are discussed in more detail in Note 14  -  Fair Value Measurements .     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, 2022 and 2021 was as follows:       2022     2021   Cash and cash equivalents   $ 15,046,894     $ 33,206,712   Restricted cash     —       6,338,306   Total cash, cash equivalents, and restricted cash   $ 15,046,894     $ 39,545,018       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, 2022 and 2021 .   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 % of its total revenue through grants from government organizations during the years ended December 31, 2022 and 2021 , 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 FASB 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.   F- 11 Table of Contents   During the years ended December 31, 2022 and 2021 , the Company had contracts with multiple CRO to complete studies as part of research grant agreements. In the case of SAB- 185, the CRO was contracted and paid by the US government - as of December 31, 2022, there is no active CRO engaged by the Company in work on the SAB- 185. 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 95 % of the contract has been paid as of  December 31, 2022 . 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 95 % of the contract has been paid as of December 31, 2022 .     Property, plant and equipment, net   The Company records equipment at cost less depreciation. Depreciation is calculated using straight-line method over the following estimated useful lives:   (in years)         Animal facility equipment     7   Laboratory equipment     7   Leasehold improvements     Shorter of asset life or lease term   Office furniture & equipment     5   Vehicles     5     Repairs and maintenance expenses are expensed as incurred.   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, 2022 and 2021 .     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 the Company's 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.   F- 12 Table of Contents   Comprehensive income   The Company had no items of comprehensive income other than its net loss.   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   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 the Company's securities, the Company's 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 the Company's 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.     ( 4 ) New accounting standards     Recently-adopted standards   In May 2021, FASB issued Accounting Standards Update ("ASU") 2021 - 04, Earnings Per Share (Topic 260 ), Debt — Modifications and Extinguishments (Subtopic 470 - 50 ), Compensation — Stock Compensation (Topic 718 ), and Derivatives and Hedging — Contracts in Entity ’ s Own Equity (Subtopic 815 - 40 ): Issuer ’ s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . The amendments in ASU 2021 - 04 provide guidance to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU 2021 - 04 are effective for all entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, including interim periods within those fiscal years. The Company adopted ASU 2021 - 04 at January 1, 2022, and the adoption did not have a material impact on its consolidated financial statements.   In November 2021, the FASB issued ASU 2021 - 10, Government Assistance (Topic 832 ): Disclosures by Business Entities about Government Assistance . This ASU increases the transparency of government assistance to include the disclosure of ( 1 ) the types of assistance, ( 2 ) an entity's accounting for the assistance, and ( 3 ) the effect of the assistance on an entity's financial statements. The guidance in ASU 2021 - 10 is effective for financial statements of all entities, including private companies, for annual periods beginning after December 15, 2021, with early application permitted. Entities are required to provide the new disclosures prospectively for all transactions with a government entity that are accounted for under either a grant or a contribution accounting model and are reflected in the financial statements at the date of initially applying the new amendments, and to new transactions entered into after that date. The Company adopted ASU 2021 - 10 at January 1, 2022, and the adoption did not have a material impact on its consolidated financial statements.   F- 13 Table of Contents     ( 5 ) 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").   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:     ● 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”).     ● 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”).     ● 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”).     ● 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 the Company's 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. The Company 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 Table of Contents   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 forward share purchase liability was fully settled during the year ended December 31, 2022.   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 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, redeemable 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 Table of Contents      ( 6 ) Revenue   During the years ended December 31, 2022 and 2021 , the Company worked on the following grants:     Government grants   The total revenue for government grants was approximately $ 23.9  million and $ 60.9  million respectively, for the years ended December 31, 2022 and 2021 .   NIH-NIAID (Federal Award #1R44AI117976 - 01A1 ) – this grant was for $ 1.4  million and started in September 2019 through August 2021.  The grant was subsequently amended to extend the date through August  2022. For the years ended December 31, 2022 and 2021 , there was approximately $ 182,000  and $ 518,000 , respectively, in grant income recognized. This grant was completed in 2022.     NIH-NIAID (Federal Award #1R41AI131823 - 02 ) – this grant was for approximately $ 1.5  million and started in April 2019 through March 2021. The grant was subsequently amended to extend the date through March 2023. For the years ended December 31, 2022 and 2021 , there was approximately $ 328,000  and $ 51,000  respectively, in grant income recognized. There is approximately $ 429,000  in funding remaining for this grant as of December 31, 2022 .   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. This grant was subsequently amended to extend the date through July 2023. For the years ended December 31, 2022 and 2021 , there was approximately $ 1,052,000  and $ 94,000 , 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 $ 0.4  million in funding remaining for this grant as of December 31, 2022 .   DoD, JPEO through Advanced Technology International – this grant was for a potential of $ 25 million, awarded in stages starting in August 2019 and with potential stages running through February 2023. Additional contract modifications were added to this contract in 2020 and 2021 for work on a COVID therapeutic, bringing the contract total to $ 203.6  million. For the years ended December 31, 2022 and 2021 , there was approximately $ 22.2  million and $ 60.2  million, respectively, in grant income recognized from this grant. This grant was terminated in 2022.   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 %).   On August 3, 2022, the Company received noticed from the DoD to terminate the JPEO Rapid Response contract, dated as of August 7, 2019 with the DoD most recently amended as of September 14, 2021, relating to a prototype research and development of Rapid Response Antibody Program and advanced clinical development through licensure and commercial manufacturing for SAB- 185 (the “JPEO Rapid Response Contract Termination”).  The Company engaged in negotiations with the DoD to compensate the Company for services provided prior to the JPEO Rapid Response Contract Termination and costs the Company would be expected to bear in future periods.     ( 7 ) Earnings per share   Since the Company reported a net loss for the years ended December 31, 2022 and 2021 , it was required by ASC 260 to use basic weighted-average shares outstanding when calculating diluted net loss per share for the years ended December 31, 2022 and 2021 , as the potential dilutive securities are anti-dilutive.       2022     2021   Calculation of basic and diluted loss per share attributable to the Company’s shareholders                 Net loss attributable to the Company’s shareholders   $ ( 18,740,804 )   $ ( 17,144,531 ) Weighted-average common shares outstanding – basic and diluted     43,524,971       27,339,180   Net loss per share, basic and diluted   $ ( 0.43 )   $ ( 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,       2022     2021   Stock options and awards     2,193,365       3,724,957   Convertible debt     368,298       —   Common stock warrants (1)     5,958,600       5,958,600   Earnout Shares (2)     10,491,937       10,491,937   Contingently issuable Earnout Shares from unexercised Rollover Options     1,508,063       1,508,063   Total     20,520,263       21,683,557       ( 1 )  The PIPE Warrants and Placement Agent Warrants to purchase 7,363,377 and 210,193 shares of common stock, respectively, are excluded from the calculation of diluted earnings per share as they are not exercisable until June 7, 2023.   ( 2 )  As the Earnout shares are subject to certain vesting requirements not satisfied as of the year ended December 31, 2022 , the Earnout Shares held in escrow are excluded from calculating both basic and diluted earnings per share.   F- 16 Table of Contents     ( 8 ) Property, plant and equipment, net   As of December 31, 2022 and 2021 , the Company’s equipment was as follows:       2022     2021   Laboratory equipment   $ 9,000,114     $ 7,431,988   Animal facility     8,357,667       8,357,667   Animal facility equipment     1,141,213       1,253,879   Construction-in-progress     308,317       4,608,778   Leasehold improvements     9,296,343       5,700,364   Vehicles     192,683       135,593   Office furniture and equipment     1,233,038       46,202   Less: accumulated depreciation and amortization     6,278,522       3,220,016   Property, plant and equipment, net   $ 23,250,853     $ 24,314,455     Depreciation and amortization expense for the years ended December 31, 2022 and 2021 was $ 3,169,429  and $ 1,488,614 , 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, 2022 and 2021 , the Company’s construction-in-progress was as follows:       2022     2021   New office space at Headquarters   $ 85,767     $ 11,183   Laboratory space at Headquarters     —       2,506,482   Laboratory equipment at Headquarters     —       246,801   IT equipment at Headquarters     84,739       212,209   Software     137,811       137,811   Bioreactors     —       1,280,728   Other     —       213,564   Total construction-in-progress   $ 308,317     $ 4,608,778         ( 9 ) Leases   The Company has an operating lease for lab space from Sanford Health, 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. This lease was amended again in October 2022 to reduce the Company's leased area to 21,014 square feet.  Additionally, pursuant to the amendment in October 2022, the Company and Sanford Health agreed for the period of October 2022 to September 2023, the Company's obligation to pay the Annual Rent shall be abated and not required to be paid when normally due (the "Abated Rent"). In exchange for the Abated Rent, effective October 1, 2022, the Company issued Sanford Health an 8 % unsecured, convertible promissory note (see Note 11, Notes Payable for further discussion). The October 2022 amendment was accounted for as a lease modification under ASC 842 - Leases and the right-of-use asset and lease liability were remeasured at the modification date of October 1, 2022. The re-measurement of the lease resulted in a $ 480,000 decrease in the noncurrent portion of the operating lease liability, a $ 448,000 decrease in the operating right-of-use asset and a $ 32,000 gain reflected in other income. The October 2022 lease amendment reduced the lease payment to $ 44,252 per month. The lease does not provide an implicit rate, and, therefore, the Company used an IBR of 6.92 % as the discount rate when measuring the operating lease liability. The operating lease does not include an option to extend beyond the life of the current term. 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, the lease was amended in July 2022 to add additional administrative and lab space. This amended 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 July 2022 amendment was accounted for as a separate contract under ASC 842 – Leases . The lease costs are $ 36,125 and $ 2,747 per month for the original leased space on November 2020 and the amendment on July 2022, respectively. The Company used an IBR of 4.69 % and 6.60 % as the discount rate when measuring the operating lease liability for the original leased space on November 2022 and the amended on July 2022, respectively. 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 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 operating lease ended in 2022 and is now classified as a short-term lease with a one -year annual renewal.   F- 17 Table of Contents   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 purchased the propane tank in November 2022.  ● 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 purchased the Ruby Cell Analyzer in December 2022.  ● 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:   (in years)         Animal Facility     40   Equipment     3 –7   Land     Indefinite     The Company’s weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of December 31, 2022 are:       Operating     Finance   Weighted-average remaining lease term (in years)     1.30       15.90   Weighted-average discount rate     6.00 %     7.72 %   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, 2022 :       Operating     Finance   2023 - remaining   $ 528,520     $ 406,339   2024     368,318       401,496   2025     —       401,496   2026     —       401,496   2027     —       401,496   Thereafter     —       4,382,998   Undiscounted future minimum lease payments     896,838       6,395,321   Less: Amount representing interest payments     ( 44,819 )     ( 2,632,891 ) Total lease liabilities     852,019       3,762,430   Less current portion     ( 490,794 )     ( 132,788 ) Noncurrent lease liabilities   $ 361,225     $ 3,629,642     Operating lease expense was approximately $ 1.2  million and $ 1.1  million, respectively, for the years ended December 31, 2022 and 2021 . 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, 2022 and 2021 included approximately $ 122,000  and $ 165,000 , respectively, in right-of-use asset amortization and approximately $ 284,000  and $ 296,000 , 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 $ 1.2  million and $ 0.4  million, respectively, for the year ended December 31, 2022 . Cash payments under operating and finance leases were approximately $ 1.1  million and $ 0.5  million, respectively, for the year ended December 31, 2021 .   F- 18 Table of Contents     ( 10 ) Accrued Expenses and Other Current Liabilities   As of December 31, 2022 and 2021 , accrued expenses and other current liabilities consisted of the following:       2022     2021   Accrued vacation   $ 511,849     $ 552,629   Accrued payroll     357,390       674,858   Accrued construction-in-progress     85,767       548,988   Accrued supplies     —       709,027   Accrued consulting     186,833       179,082   Accrued clinical trial expense     355,479       423,634   Accrued outside laboratory services     1,106,903       128,752   Accrued bonus & severance     950,324       1,804,288   Accrued contract manufacturing     25,129       1,000,824   Accrued legal     856,505       833,646   Accrued financing fees payable     4,910,500       5,100,000   Accrued franchise tax payable     50,000       216,251   Accrued interest     8,192       —   Other accrued expenses     513,110       283,909       $ 9,917,981     $ 12,455,888       ( 11 ) Notes Payable   As of December 31, 2022 and 2021 , notes payable was as follows:       2022     2021   Tractor loan   $ —     $ 25,013   Insurance financing note payable     772,665       1,771,711   8 % Unsecured Convertible Note     541,644       —   Total notes payable     1,314,309       1,796,724   Less: notes payable - current portion     772,665       1,796,724   Notes payable, noncurrent   $ 541,644     $ —     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 was paid off in full in November 2022.    On March 27, 2020, President Trump signed into law the 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. The Company 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.    8% Unsecured Convertible Note   Additionally, pursuant to the Fourth Amendment to the Company's lease with Sanford Health, the Company and Sanford Health agreed to a period of Abated Rent from  October 1, 2022 to September 30, 2023. In exchange for the Abated Rent, effective as of October 1, 2022, the Company issued to Sanford Health an 8 % unsecured, convertible promissory note (the "8% Unsecured Convertible Note").   Pursuant to the October Note, the Company shall pay the sum of $ 541,644 (the “Principal”) plus accrued and unpaid interest thereon on September 31, 2024 (the “Maturity Date”). Simple interest shall accrue on the outstanding Principal from and after the date of the October Note, and shall be payable on the Maturity Date. Sanford Health shall have the right, but not the obligation, to convert all or any part of the outstanding Principal of the October Note, together with any accrued and unpaid interest thereon to the date of such conversion, into such number of fully paid and non-assessable shares of the Company’s common stock, at any time and from time to time, prior to the later of the Maturity Date and the date on which the October Note is paid in full, subject to certain restrictions, at a conversion price per share of Common Stock equal to greater of ( x ) $ 1.50 and (y) the price at which the Company sells shares of common stock in any bona fide private or public equity financing prior to the Maturity Date.   F- 19 Table of Contents   The Company evaluated the treatment of the  8% Unsecured Convertible Note under ASC 470 and ASU 2020 - 06 (early adopted by the Company as of January 1, 2021) and determined the Note in its entirety would be allocated to debt without separating the nonconvertible debt. The Company's consolidated balance sheet as of  December 31, 2022  includes accrued interest of approximately $ 8,000   Insurance Financing   The Company obtained financing for certain Director & Officer liability insurance policy premiums. The agreement assigns First Insurance Funding (Lender) a first priority lien on and security interest in the financed policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums. If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy.   The total premiums, taxes and fees financed is approximately $ 1,236,000 with an annual interest rate of 5.47 %. In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker, the Company unconditionally promises to pay Lender the amount Financed plus interest and other charges permitted under the Agreement. At December 31, 2022 and 2021 the Company recognized approximately $ 773,000 and $ 1,772,000 , respectively, as an insurance financing note payable in its consolidated balance sheets. The Company will pay the insurance financing through installment payments with the last payment for the current note being on September 22, 2023.   ( 12 ) Preferred Stock   On the Closing Date, pursuant to the Business Combination (as described in Note 5 ), 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.   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 prior to the Business Combination 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.     ( 13 ) 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. As of the beginning of the 2022 calendar year, the shares reserved for future issuance increased by, 869,746 , or two percent ( 2 %) of the total number of shares of Common Stock issued and outstanding, to a total of 11,869,746 shares of common stock reserved for issuance under the 2021 Omnibus Equity Incentive Plan   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- 20 Table of Contents   Stock Options    Stock option activity for employees and non-employees under the Equity Compensation Plans for the year ended December 31, 2022 :       Options     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (years)     Aggregate Intrinsic Value   Outstanding options, December 31, 2021     5,107,672     $ 2.44       5.78     $ 28,948,535   Granted     2,934,051     $ 1.54                   Forfeited     ( 855,007 )   $ 3.32                   Exercised     ( 90,264 )   $ 0.85                   Expired     ( 990 )   $ 4.97                   Outstanding options, December 31, 2022     7,095,462     $ 1.99       5.79     $ 109,891   Options vested and exercisable at December 31, 2022     4,269,351     $ 1.84       3.36     $ 109,891     Total unrecognized compensation cost related to non-vested stock options as of  December 31, 2022  was approximately $ 4.2  million and is expected to be recognized within future operating results over a weighted-average period of  3.17  years.     The weighted average grant date fair value of options granted during the year ended December 31, 2022 and 2021 , was $ 0.78  and $ 5.36 per share, respectively. During the year ended December 31, 2022 and 2021, 634,658 shares with a fair value totaling $ 3.1 million, and 461,701 shares with a fair value totaling $ 1.7 million, respectively, vested.   The estimated fair value of stock options granted during to employees and consultants for the years ended December 31, 2022 and 2021 , were calculated using the Black-Scholes option-pricing model using the following assumptions:        2022     2021   Expected volatility     78.0 - 97.4 %     75.9 - 104.3 % Weighted-average volatility     94.1 %     92.8 % Expected dividends     — %     — % Expected term (in years)     5.50 - 6.08       6.25   Risk-free rate     1.38 - 3.56 %     0.14 - 1.38 %   Restricted Stock   Restricted stock unit activity for employees and non-employees under the Equity Compensation Plans for the year ended December 31, 2022 was as follows:        Number of shares     Weighted Average Grant Date Fair Value   Unvested as of December 31, 2021     —     $ —   Granted     350,000     $ 1.72   Vested     —     $ —   Forfeited     —     $ —   Unvested as of December 31, 2022     350,000     $ 1.72     At December 31, 2022 , the Company had an aggregate of $ 519,000  of unrecognized equity-based compensation related to restricted stock units outstanding. The unrecognized expense for restricted stock units is expected to be recognized over a weighted average period of 3.46 years.   Stock-based compensation expense for the years ended December 31, 2022 and 2021 was as follows:       2022     2021   Research and development   $ 857,331     $ 964,926   General and administrative     1,816,873       1,349,756   Total   $ 2,674,204     $ 2,314,682     F- 21 Table of Contents     ( 14 ) 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.   The following tables present information about the Company's assets and liabilities that are measured at fair value on a recurring basis at December 31, 2022  and  2021 , and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair values:       As of December 31, 2022       Total     Quoted Prices In Active Markets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Other Unobservable Inputs (Level 3)   Liabilities:                                 Public Warrant liability   $ 310,500     $ 310,500     $ —     $ —   Private Placement Warrant liability   $ 10,430       —       —       10,430   Total   $ 320,930     $ 310,500     $ —     $ 10,430         As of December 31, 2021       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 sends the notice of redemption to the warrant holders.   F- 22 Table of Contents   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, 2022 , 5,750,000 Public Warrants classified as liabilities 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, 2022 , 208,600 Private Placement Warrants classified as liabilities were outstanding.   PIPE Private Placement Warrants and  PIPE Placement Agent Warrants   In December 2022, the Company entered into a Securities Purchase Agreement with certain institutional and accredited investors for the sale by SAB of 7,363,377 Shares, 7,363,377 Warrants, and in a private placement offering. The combined purchase price per Share and accompanying warrant was $ 1.08 . Three directors of the Company participated in the Private Placement, each paying a $ 0.125 premium per Share and accompanying warrants, (the “PIPE Private Placement Warrants”). The PIPE Private Placement Warrants, including those purchased by the participating directors of SAB are exercisable beginning six months from the date of issuance at an exercise price equal to $ 1.08 per Share, and are exercisable for five years from the date of issuance. SAB received gross proceeds of approximately $ 8.0 million before deducting transaction related fees and expenses. SAB paid Brookline Capital Markets, the placement agent, a cash fee equal to seven percent of the gross proceeds received by SAB in the Private Placement. SAB also issued Brookline Capital Markets a warrant to purchase up to an aggregate of 210,913 shares of Common Stock (the “PIPE Placement Agent Warrants”), equal to seven percent of the number of Shares purchased by Investors introduced to the Company by Brookline Capital Markets. The Placement Agent Warrants have an exercise price equal to $ 1.35 per share and are exercisable six months from the date of issuance and expires five years from the date of issuance.   As of  December 31, 2022 , 7,363,377 PIPE Private Placement Warrants and 210,913 PIPE Placement Agent Warrants classified as equity were outstanding.   Presentation and Valuation of the Warrants   Liability Classified Warrants   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, 2022  and 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 years ended December 31, 2022  and 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 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.   Equity Classified Warrants   The Company determined the PIPE Private Placement Warrants and PIPE Placement Agent Warrants met all necessary criteria to be accounted for as equity in accordance with ASC 815 - 40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity.  As such, they are presented within additional paid-in capital within Company's Consolidated Statements of Changes In Stockholders’ Equity (deficit) and consolidated balance sheets.    F- 23 Table of Contents   Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.    Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. The initial fair value of each PIPE Private Placement Warrant and PIPE Placement Agent Warrant issued has been determined using the Black-Scholes option-pricing model. All relevant terms and conditions for the PIPE Private Placement Warrant and PIPE Placement Agent Warrant are identical with the exception of the exercise prices of $ 1.08 and $ 1.35 , respectively; the key inputs into the valuations as of the initial measurement date were as follows:       Initial       Measurement   Risk-free interest rate     3.62 % Expected term remaining (years)     5.00   Implied volatility     89.0 % Closing common stock price on the measurement date, less discount for lack of marketability (1)   $ 0.66       ( 1 ) As the underlying shares are restricted from sale for a period of 180 days from the date of the 2022 Private Placement, the fair value of the warrants were estimated using the Black-Scholes option pricing model that uses several inputs, including market price of the Company's common shares at the end of each reporting period (a level one input), less a discount for lack of marketability (a level two input). The discount for lack of marketability was estimated upon consideration of volatility and the length of the lock-up period.   Upon initial measurement, the fair value of the PIPE Private Placement Warrants and PIPE Placement Agent Warrants were determined to be $ 0.42 and $ 0.39 , respectively, per warrant for aggregate values of approximately $ 3,072,000 and $ 82,000 , respectively. In the Private Placement, the Company recognized the PIPE Private Placement Warrants and PIPE Placement Agent Warrants on a relative fair value basis with approximately $ 2.2 million and $ 58,000  being allocated to each as a component of additional paid-in capital within the Company's consolidated statements of changes in stockholders’ equity (deficit) and consolidated balance sheets.   The following table provides a summary of the changes in the Company's Level 3 fair value measurements:   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   Change in fair value of Private Placement Warrant liability     ( 417,200 ) Balance, December 31, 2022   $ 10,430     The measurement as of  December 31, 2021  for the Public Warrant liability was approximately $ 428,000  and the change in fair value of the Public Warrant liability was approximately $ 417,000  for the year ended December 31, 2022 .   The key inputs into the valuations as of December 31, 2022  and 2021  were as follows:       December 31,     December 31,       2022     2021   Risk-free interest rate     4.00 %     1.24 % Expected term remaining (years)     3.81       4.81   Implied volatility     82.0 %     43.0 % Closing common stock price on the measurement date   $ 0.59     $ 7.81     As of December 31, 2022 and 2021 , the Company did not 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- 24 Table of Contents     ( 15 ) Income Taxes   Net deferred tax assets as of December 31, 2022 and 2021 consisted of the following:       2022     2021   Deferred tax assets:                 Tax Carryforwards   $ 5,576,496     $ 5,078,429   Compensation Accruals     1,781,746       1,255,535   Amortizable R&D Intangibles     7,243,110       —   Other Deferred Tax Assets     1,220,784       2,040,143   Total deferred tax assets     15,822,136       8,374,107   Less valuation allowance     ( 12,330,481 )     ( 5,300,689 ) Total deferred tax assets   $ 3,491,655     $ 3,073,418   Deferred tax liabilities:                 PPE     3,240,489       2,521,871   Other Deferred Tax Liabilities     251,166       551,547   Total deferred tax liabilities     3,491,655       3,073,418   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:       2022             2021           Rate reconciliation:                                 Net (loss) income before tax   $ ( 18,715,175 )           $ ( 17,144,531 )         Federal income tax at statutory rate     ( 3,930,187 )     21.00 %     ( 3,600,352 )     21.00 % Permanent items     ( 2,207,588 )     12.79 %     1,029,874       ( 6.01 )% Valuation allowance     7,029,790       ( 39.04 )%     2,679,238       ( 15.63 )% Other     ( 866,386 )     5.05 %     ( 108,760 )     0.64 %     $ 25,629       ( 0.20 )%   $ —       ( 0.00 )%   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 $ 7.0  million and approximately $ 3.0  million, respectively, for the years ended December 31, 2022 and 2021 .   As of December 31, 2022 , the Company had approximately $ 22.0  million of federal net operating losses, which were generated after December 31, 2017 and can be carried forward indefinitely under the Tax Act and may generally be used to offset up to 80% of future taxable income. In addition, the Company had federal tax credit carryforwards of approximately $ 938,000 and approximately $ 0 , respectively for years ended  December 31, 2022 and 2021  which are available to reduce future federal income taxes through 2042.      Prior to 2022, taxpayers had the option under Section 174 of the Internal Revenue Code to either deduct their research and development costs or capitalize and amortize such costs over a period of not less than 60 months. As part of the tax law changes in the Tax Act enacted in 2017, starting with tax years beginning after December 31, 2021, Congress requires taxpayers to capitalize expenditures that qualify as Section 174 research and development costs and recover them over 5 years for expenditures attributed to domestic research and 15 years for expenditures attributed to foreign research. The 2022 effective income tax rate was impacted by the Section 174 capitalization requirement combined with the restriction on net operating losses to only reduce taxable income by 80%.     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, 2022 and 2021 , there were no uncertain tax provisions. There was no interest or penalties related to income taxes for the years ended December 31, 2022 and 2021 , and there was no accrued interest or penalties associated with uncertain tax positions as of December 31, 2022 and 2021 .   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 2019  to present. However, to the extent allowed by law, the taxing authorities may have the right to examine the period from 2016  through 2022  where 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.   On August 16, 2022, the President of the United States signed and enacted into law the Inflation Reduction Act   ("IRA"). Among other provisions, the IRA directs new federal spending toward reducing carbon emissions, lowering healthcare costs, funding the Internal Revenue Service, and improving taxpayer compliance.  The IRA did not have a material impact on the Company’s tax provision as of December 31, 2022.   F- 25 Table of Contents   ( 16 ) Related Party Transactions   For the year-ended December 31, 2022, under the Related Party Transaction Policy the Company adopted in the fourth quarter of 2021, there were no related party transactions with beneficial ownership 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.    For the year-ended December 31, 2021, preceding the Company's Merger and adoption of the aforementioned Related Party Transaction Policy, the Company had related party transactions as follows:      ● The Company paid consulting fees to a board member, Christine Hamilton, who is also a shareholder, of $ 25,000 .   ● The Company made lease and insurance payments to Dakota Ag Properties of approximately $ 401,000 . Dakota Ag Investments (part of Dakota Ag Properties) is a shareholder and owner of the Company.   ● The Company made lab supply payments to Sandford Health totaling approximately $ 108,000 . The Company had no related party payables with Sanford Health as of December 31, 2021.     ( 17 ) 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 Code, 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, 2022 and 2021 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 $ 410,000  and $ 325,000 , respectively, of matching contributions paid by the Company.     ( 18 ) 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.     ( 19 ) 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, 2022 and 2021 , 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, 2022 and 2021 . 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. This project is on hold given the Company's choice to engage Emergent to provide contract development and manufacturing (CDMO) services to produce the Company's fully-human polyclonal antibody products.   ( 20 ) Supplemental Disclosures   Supplemental cash flow information and non-cash investing and financing activities are as follows for the years ended December 31, 2022  and 2021 :       2022     2021   Supplemental cash flow information:                 Cash paid for interest   $ 293,392     $ 294,459   Cash paid for income taxes   $ 25,629     $ —   Non-cash investing and finance activities:                 Right-of-use assets obtained in exchange for operating lease liabilities   $ 65,088     $ 505,187   Right-of-use assets forfeited due to partial lease terminations   $ 447,810     $ —   Operating lease liabilities eliminated due to partial lease terminations   $ 480,035     $ —   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 the accrued expense and other current liabilities   $ —     $ 2,000,000         F- 26 Table of Contents   ( 21 ) Quarterly Financial Information (Unaudited)   As further described in Note 2, Restatement of Financial Statements , the previously reported balance sheets as of  March 31, 2022, and June 30, 2022, as well as, the statement of cash flows for the three months ended March 31, 2022, six months ended June 30, 2022 and nine months ended September 30, 2022, have been restated. Relevant restated financial information for each relevant period is included in this Annual Report on Form 10 -K in the tables that follow. As part of the restatement, the Company recorded adjustments to correct the misstatements in the impacted periods. Descriptions of the restatement can be found in Note 2, Restatement of Financial Statements . The unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.   Balance sheets         March 31, 2022 (unaudited)     June 30, 2022 (unaudited)       As Previously Reported     Adjustments     Restated     As Previously Reported     Adjustments     Restated   Assets                                                 Current assets                                                 Cash and cash equivalents   $ 22,408,409     $ —     $ 22,408,409     $ 16,616,493     $ —     $ 16,616,493   Accounts receivable, net     11,786,420       —       11,786,420       9,612,672       —       9,612,672   Prepaid expenses     1,974,908       1,014,754       2,989,662       1,521,376       253,428       1,774,804   Total current assets     36,169,737       1,014,754       37,184,491       27,750,541       253,428       28,003,969   Long-term prepaid insurance     —       —       —       535,082       —       535,082   Operating lease right-of-use assets     2,351,193       —       2,351,193       2,085,923       —       2,085,923   Financing lease right-of-use assets     3,978,116       —       3,978,116       3,946,306       —       3,946,306   Property, plant and equipment, net     24,973,432       —       24,973,432       24,837,073       —       24,837,073   Total assets   $ 67,472,478     $ 1,014,754     $ 68,487,232     $ 59,154,925     $ 253,428     $ 59,408,353   Liabilities and Stockholders’ Equity                                                 Current liabilities                                                 Accounts payable   $ 4,981,385     $ —     $ 4,981,385     $ 4,943,581     $ —     $ 4,943,581   Notes payable     25,013       1,014,754       1,039,767       25,013       253,428       278,441   Operating lease liabilities, current portion     1,154,680       —       1,154,680       1,169,139       —       1,169,139   Finance lease liabilities, current portion     145,898       —       145,898       140,767       —       140,767   Income tax payable     92,281       —       92,281       —       —       —   Accrued expenses and other current liabilities     11,856,627       —       11,856,627       9,858,719       —       9,858,719   Total current liabilities     18,255,884       1,014,754       19,270,638       16,137,219       253,428       16,390,647   Operating lease liabilities, noncurrent     1,358,829       —       1,358,829       1,061,122       —       1,061,122   Finance lease liabilities, noncurrent     3,728,941       —       3,728,941       3,694,834       —       3,694,834   Warrant liabilities     2,870,558       —       2,870,558       1,140,478       —       1,140,478   Notes payable, noncurrent     —       —       —       —       —       —   Total liabilities     26,214,212       1,014,754       27,228,966       22,033,653       253,428       22,287,081   Commitments and contingencies (Note 18)                                                           Stockholders’ equity                                                 Preferred stock; $ 0.0001 par value; 10,000,000 shares authorized, 10,000,000 shares issued and outstanding at June 30, 2022, and March 31, 2022, respectively     —       —       —       —       —       —   Common stock; $ 0.0001 par value; 490,000,000 shares authorized at June 30, 2022, and March 31, 2022; 43,501,779 and 43,577543 shares issued, respectively, and 42,955,121 and 43,030,885 outstanding at March 31, 2022 and June 30, 2022, respectively     4,350       —       4,350       4,358       —       4,358   Treasury stock, at cost; 546,658 shares held at March 31, 2022 and June 30, 2022     ( 5,521,246 )     —       ( 5,521,246 )     ( 5,521,246 )     —       ( 5,521,246 ) Additional paid-in capital     74,918,250       —       74,918,250       75,557,244       —       75,557,244   Accumulated deficit     ( 28,143,088 )     —       ( 28,143,088 )     ( 32,919,084 )     —       ( 32,919,084 ) Total stockholders’ equity     41,258,266       —       41,258,266       37,121,272       —       37,121,272   Total liabilities and stockholders’ equity   $ 67,472,478     $ 1,014,754     $ 68,487,232     $ 59,154,925     $ 253,428     $ 59,408,353     F- 27 Table of Contents   Statements of Cash Flows     Three Months Ended March 31, 2022 (unaudited)     Six Months Ended June 30, 2022 (unaudited)     Nine Months Ended September 30, 2022 (unaudited)       As Previously Reported     Adjustments     Restated     As Previously Reported     Adjustments     Restated     As Previously Reported     Adjustments     Restated   Cash flows from operating activities:                                                                         Net income   $ 985,863     $ —     $ 985,863     $ ( 3,790,132 )   $ —     $ ( 3,790,132 )   $ ( 10,866,209 )   $ —     $ ( 10,866,209 ) Adjustments to reconcile net income to net cash provided by (used in) operating activities:                                                                         Depreciation and amortization     636,235       —       636,235       1,385,427       —       1,385,427       2,270,621       —       2,270,621   Amortization of right-of-use assets     41,207       —       41,207       73,016       —       73,016       97,733       —       97,733   Stock-based compensation expense     897,600       —       897,600       1,467,461       —       1,467,461       2,045,664       —       2,045,664   Gain on sale of equipment     ( 14,278 )     —       ( 14,278 )     ( 14,278 )     —       ( 14,278 )     ( 15,793 )     —       ( 15,793 ) Changes in fair value of warrant liabilities     ( 7,849,572 )     —       ( 7,849,572 )     ( 9,579,652 )     —       ( 9,579,652 )     ( 10,362,614 )     —       ( 10,362,614 ) Changes in operating assets and liabilities                                                                         Accounts receivable     ( 3,775,713 )     —       ( 3,775,713 )     ( 1,601,964 )     —       ( 1,601,964 )     ( 4,931,330 )     —       ( 4,931,330 ) Prepaid expenses     ( 1,110,395 )     755,783       ( 354,612 )     ( 1,191,944 )     1,516,833       324,889       ( 544,737 )     1,771,746       1,227,009   Operating lease right-of-use assets     ( 18,080 )     —       ( 18,080 )     ( 36,056 )     —       ( 36,056 )     ( 75,276 )     —       ( 75,276 ) Accounts payable     522,816       —       522,816       485,058       —       485,058       1,025,751       —       1,025,751   Due to related party     ( 2,367 )     —       ( 2,367 )     ( 2,367 )     —       ( 2,367 )     ( 2,367 )     —       ( 2,367 ) Deferred grant income     ( 100,000 )     —       ( 100,000 )     ( 100,000 )     —       ( 100,000 )     ( 100,000 )     —       ( 100,000 ) Income tax payable     92,281       —       92,281       —       —       —       —       —       —   Accrued expense and other current liabilities     ( 599,105 )     —       ( 599,105 )     ( 2,597,169 )     —       ( 2,597,169 )     ( 2,217,676 )     —       ( 2,217,676 ) Net cash (used in) provided by operating activities     ( 10,293,508 )     755,783       ( 9,537,725 )     ( 15,502,600 )     1,516,833       ( 13,985,767 )     ( 23,676,233 )     1,771,746       ( 21,904,487 )                                                                           Cash flows from investing activities:                                                                         Proceeds from the sale of equipment     76,390       —       76,390       76,390       —       76,390       76,390       —       76,390   Purchases of equipment     ( 1,357,324 )     —       ( 1,357,324 )     ( 1,970,156 )     —       ( 1,970,156 )     ( 2,048,660 )     —       ( 2,048,660 ) Net cash used in investing activities     ( 1,280,934 )     —       ( 1,280,934 )     ( 1,893,766 )     —       ( 1,893,766 )     ( 1,972,270 )     —       ( 1,972,270 )                                                                           Cash flows from financing activities:                                                                         Payments of notes payable     —       ( 755,783 )     ( 755,783 )     —       ( 1,516,833 )     ( 1,516,833 )     —       ( 1,771,746 )     ( 1,771,746 ) Payments related to the Forward Share Purchase Agreement     ( 5,521,246 )     —       ( 5,521,246 )     ( 5,521,246 )     —       ( 5,521,246 )     ( 5,521,246 )     —       ( 5,521,246 ) Principal payments on finance leases     ( 48,751 )     —       ( 48,751 )     ( 87,884 )     —       ( 87,884 )     ( 120,053 )     —       ( 120,053 ) Proceeds from exercise of stock options     7,830       —       7,830       76,971       —       76,971       76,972       —       76,972   Net cash used in financing activities     ( 5,562,167 )     ( 755,783 )     ( 6,317,950 )     ( 5,532,159 )     ( 1,516,833 )     ( 7,048,992 )     ( 5,564,327 )     ( 1,771,746 )     ( 7,336,073 )                                                                           Net (decrease) increase in cash, cash equivalents, and restricted cash     ( 17,136,609 )     —       ( 17,136,609 )     ( 22,928,525 )     —       ( 22,928,525 )     ( 31,212,830 )     —       ( 31,212,830 ) Cash, cash equivalents, and restricted cash                                                                         Beginning of year     39,545,018       —       39,545,018       39,545,018       —       39,545,018       39,545,018       —       39,545,018   End of period   $ 22,408,409     $ —     $ 22,408,409     $ 16,616,493     $ —     $ 16,616,493     $ 8,332,188     $ —     $ 8,332,188     F- 28 Table of Contents     ( 22 ) Subsequent Events   On March 21, 2023, the Company entered into a settlement agreement with Ladenburg (the “2023 Ladenburg Agreement”, and the action brought by Ladenburg, the “Ladenburg Action”), effective March 23, 2023. In connection with the Ladenburg Agreement, on March 24, 2023, the Company (i) issued to Ladenburg a warrant to purchase up to 300,000 shares of common stock, exercisable for three years from the date of issuance at $ 0.5424 per share; and (ii) furnished to Ladenburg a one -time cash payment of $ 500,000 . Pursuant to the terms and subject to the conditions set forth in the 2023 Ladenburg Agreement, the Company will (i) no later than June 30, 2023, pay $ 1.5 million to Ladenburg in cash or shares of common stock, at the Company’s option; and (ii) no later than December 31, 2023, pay $ 1.1 million to Ladenburg in cash or shares of common stock, at the Company’s option. Following the completion of the Company’s obligations under the Ladenburg Agreement, Ladenburg has agreed to dismiss the Ladenburg Action with prejudice and extinguish any and all obligations of the Company in connection therewith. Any issuance of securities under the Ladenburg Agreement has been made or shall be made pursuant to exemptions provided by Section 4 (a)( 2 ) of the Securities Act as transactions not involving a public offering, and Rule 506 of Regulation D promulgated under the Securities Act.   The Company notes the consideration due to Ladenburg under the 2023 Ladenburg Agreement, excluding the warrants issuable thereunder, are contained within the 2021 and 2022  consolidated balance sheets within accrued expenses and other current liabilities.   F-29