SAB Biotherapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2025

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes included in Part I, Item 1 of this Form 10-Q. Some of the information contained in this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors.” Please also refer to the section titled “Special Note Regarding Forward Looking Statements.”

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report” or “Form 10-Q”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act of 1934, as amended (the "Exchange Act"), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements involved known and unknown risks, relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. In addition, historic results, including but not limited to those related to IND enabling GLP safety/toxicology of SAB-142; and Phase 1 & Phase 2a results of SAB-176; do not guarantee that future research or trials will suggest the same conclusions, nor that historic results referred to herein will be interpreted in the same manner due to future preclinical and clinical trial results or otherwise. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the sections entitled “Risk Factors” in this Quarterly Report, our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and other periodic reports filed with the Securities and Exchange Commission (the “SEC”) and available at https://www.sec.gov/. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as expressly required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

Company Overview

We are a clinical-stage biopharmaceutical company focused on developing human, multi-specific, high-potency immunoglobulins (IgGs), without the need for human donors or convalescent plasma, to treat and prevent autoimmune disorders. Our programs are based on mechanisms of action that have achieved proof-of-concept in clinical trials in indications with significant unmet medical needs. We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases, including type 1 diabetes (T1D) and other autoimmune disorders. Our internally discovered antibodies are multi-specific, meaning they are comprised of multiple human IgG (hIgG) and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.

Our proprietary platform holds the potential to generate additional novel therapeutic candidates to expand our pipeline, utilizing the human immune response to generate the optimal repertoire of hIgG for drug targets of interest. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors. We have optimized genetic engineering in the development of transchromosomic cattle, or Tc Bovine, which produce hIgG. Our engineering of our production platform drives IgG1 production across our pipeline. In addition, this differentiated approach using polyclonal antibodies has no biosimilar pathway, which provides a significant barrier to competitive polyclonal approaches.

SAB-142: Our Lead Product Candidate

Our wholly owned lead product candidate, SAB-142 is a human anti-thymocyte globulin (ATG) focused on preventing or delaying the progression of T1D. SAB-142 is a first-in-class, human, multi-target ATG treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D. SAB-142 is expected to reduce autoimmune β-cell destruction and delay progression or onset of T1D in patients with Stage 3 or Stage 2 T1D, respectively. The mechanism of action of SAB-142 has been clinically validated in numerous clinical trials with a rabbit anti-thymocyte globulin (rATG). In addition, data from more than 700 human subjects treated with antibodies produced by our platform support expectation of a zero-serum sickness rate and zero incidence of neutralizing anti-drug antibodies (ADA) within the upcoming SAB-142 clinical trials.

We received an Investigational New Drug (IND) clearance from the FDA in May 2024 and announced positive topline data from our Phase 1 clinical trial of SAB-142 in January 2025. Next, we intend to advance SAB-142 into a Phase 2b clinical trial called the SAFEGUARD study. On May 29, 2025, the Company held a constructive Type B meeting with the FDA. The meeting followed positive topline data from a Phase 1 single-ascending dose trial in healthy volunteers for SAB-142. The primary discussion centered on questions related to all aspects of SAB-142’s Phase 2b SAFEGUARD clinical trial design and chemistry, manufacturing, and controls processes. The FDA provided clear, constructive, and actionable guidance during the discussion leading to alignment on the design and advancement of our Phase 2b SAFEGUARD study. SAB confirmed its intent with the FDA to utilize the data from this study as supportive evidence for future regulatory approval.

Other Immunology Indications

T- and B-cells are multifunctional lymphocytes whose dysregulation was shown to have a central role in the pathogenesis of more than 80 autoimmune diseases, including T1D, systemic lupus erythematosus (SLE), rheumatoid arthritis (RA), multiple sclerosis (MS) and celiac disease. The therapeutic success to date of lymphocyte- mediating therapies in variety of autoimmune diseases and our in vivo and in vitro pre-clinical and Phase 1 work from SAB-142 in T1D will support direct progression into Phase 2 clinical trials in other autoimmune indications.

Since the commencement of our operations, we have devoted substantially all of our resources to research and development activities, organizing and staffing our company, business planning, raising capital, establishing and maintaining our intellectual property portfolio, conducting preclinical studies and clinical trials and providing general and administrative support for these operations.

Components of Results of Operations

Revenue

Government grants

There was no revenue recognized for the three and six months ended June 30, 2025. Total revenue recognized from government grants was approximately $0.3 million and $1.2 million for the three and six months ended June 30, 2024, respectively. The Company had various grants from the US Department of Defense that terminated in 2022. The Company satisfied all obligations under these arrangements as of December 31, 2024.

Operating Expenses

Research and Development Expenses

Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials for employees and contractors engaged in research and product development, licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that perform certain research and testing on our behalf. Research and development expenses are tracked by target/project code. Indirect general and administrative costs are allocated based upon a percentage of direct costs. We expense all research and development costs in the period in which they are incurred.

Research and development activities consist of discovery research for our platform development and the indications we are working on. For SAB-142, Avance Clinical PTY, Ltd (“Avance”), acts as the contract research organization (“CRO”) overseeing our Phase 1 safety study. This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current. Pursuant to an agreement between the Company and Fortrea Holdings Inc. (“Fortrea”). Fortrea will act as the CRO overseeing our Phase 2b efficacy and safety study for SAB-142. The study is expected to start in December 2025.

For the three and six months ended June 30, 2025 and 2024, we continued to incur costs to advance our progress towards commercialization of SAB-142. We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications. We expect to hire additional employees and continue research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period.

Major components within our research and development expenses are salaries and benefits (laboratory & animal care), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expense.

Research and development expenses by component for the three and six months ended June 30, 2025 and 2024:

General and Administrative Expenses

General and administrative expenses primarily consist of salaries, benefits, and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs. We anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations. We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue.

Nonoperating (Expense) Income

Gain (loss) on change in fair value of warrant liabilities

Gain (loss) on change in fair value of warrant liabilities consists of the changes in the fair value of the warrant liabilities.

Other Income (expense)

Other income primarily consists of income associated with the refundable portion of Australian research and development tax credits and dividend income from non-interest bearing short-term investments.

Interest income

Interest income consists of interest earned on our investments in debt securities, cash, and cash equivalents.

Interest expense

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

Results of Operations

The following tables set forth our results of operations for the three months ended June 30, 2025 and 2024:

The following tables set forth our results of operations for the six months ended June 30, 2025 and 2024:

Comparison of the three and six months ended June 30, 2025 and 2024

Revenue

Revenue decreased by $0.3 million, or 100.0%, in the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, due to the JPEO Rapid Response Contract Termination. There was no revenue recognized for the three months ended June 30, 2025. Included in revenues for the three months ended June 30, 2024, are closeout activities and charges of $0.3 million due to outside services for laboratory supply disposal.

Revenue decreased by $1.2 million, or 100.0%, in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, due to the JPEO Rapid Response Contract Termination. There was no revenue recognized for the six months ended June 30, 2025. Included in revenues for the six months ended June 30, 2024, are closeout activities and charges of $1.2 million due to outside services for laboratory supply disposal.

As a result of the JPEO Rapid Response Contract Termination, we do not expect to generate revenues during the development phase of our primary pipeline development target of Type 1 diabetes, which remains independently financed as we explore potential partnerships, co-development opportunities, and licensing arrangements.

Research and Development

Research and development expenses increased by $0.2 million, or 2.6%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to an increase in salaries and benefits (year-over-year increase of $0.8 million, 33.0%) and clinical trial costs (year-over-year increase of $1.2 million, 204.3%), offset by decreases in outside lab services (year-over-year decrease of $1.2 million, 85.8%), overhead (year-over-year decrease of $0.3 million, 16.7%), animal care (year-over-year decrease of $0.1 million, 62.4%), and laboratory supplies (year-over-year decrease of $0.2 million, 71.8%). We expect Research and Development expenses to increase in future years as we advance our lead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to support potential commercialization.

Research and development expenses decreased by $0.1 million, or 0.8% for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The year-over-year change includes a decreases in outside lab services (year-over-year decrease of $2.2 million, 70.2%), overhead (year-over-year decrease of $1.5 million, 26.5%), project consulting (year-over-year decrease of $0.1 million, 26.5%), laboratory supplies (year-over-year decrease of $0.3 million, 50.7%), animal care (year-over-year decrease of $0.1 million, 54.5%), offset by an increase in salaries and benefits (year-over-year increase of $1.7 million, 37.1%) and clinical trial costs (year-over-year increase of $2.4 million, (167.7%). We expect Research and Development expenses to increase in future years as we advance our lead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to support potential commercialization.

General and Administrative

General and administrative expenses decreased by $0.9 million, or 24.9%, in the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to salaries and benefits (year-over-year decrease of $0.4 million, 19.9%), insurance costs (year-over-year decrease of $0.1 million, 19.7%), other immaterial administrative support fees relating to IT and human resources (year-over-year decrease of $0.6 million, 51.7%), offset by an increase in project consulting (year-over-year increase of $0.2 million, 103.2%).

General and administrative expenses decreased by $2.2 million, or 27.2%, in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to salaries and benefits (year-over-year decrease of $0.9 million, 22.6%), insurance costs (year-over-year decrease of $0.2 million, 22.6%) and other immaterial administrative support fees relating to IT and human resources (year-over-year decrease of $1.2 million, 42.5%) offset by an increase in project consulting (year-over-year decrease of $0.1 million, 15.6%).

While administrative support and non-capitalized financing costs declined as of June 30, 2025, as compared to June 30, 2024, we anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.

Non-operating Income

Total non-operating income decreased by $2.9 million, or 112.8%, in the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to the change in fair value of warrant liabilities (year-over-year decrease of $2.8 million 128.3%), and a net decrease of $0.1 million in the Australian research and development tax credit and dividend income.

Total non-operating income decreased by $3.3 million, or (38.43)%, in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to the change in fair value of warrant liabilities (year-over-year decrease of $3.3 million, 42.6%). The Australian research and development tax credit and dividend income for the six months ended June 30, 2025 was consistent with the Australian research and development tax credit and dividend income for the six months ended June 30, 2024.

Interest Expense

Interest expense in the three months ended June 30, 2025 was consistent with interest expense in the three months ended June 30, 2024.

Interest expense in the six months ended June 30, 2025 was consistent with interest expense in the six months ended June 30, 2024.

Interest Income

Interest income decreased by $0.4 million, or 96.4%, during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to interest earned on our investments in debt securities, and lower interest earning cash, and cash equivalent balances.

Interest income decreased by $0.8 million, or (91.28)%, during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to interest earned on our investments in debt securities, and lower interest earning cash, and cash equivalent balances.

Future interest income will be largely dependent on our total liquid cash and investment balances, which are in turn influenced by our capital resources and future fundraising activities.

Liquidity and Capital Resources

The Company has experienced net losses, negative cash flows from operations and, as of June 30, 2025, had an accumulated deficit of $139.5 million. The Company anticipates that it will continue to generate losses for the foreseeable future, and expects the losses to increase as the Company continues the development of, or seeks regulatory approvals for product candidates, and begins commercialization of products. As a result, the Company will require additional capital to fund operations in order to support long-term plans.

On July 21, 2025, the Company entered into the July 2025 Purchase Agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in the Series B Offering, (i) 1,000,000 Series B Shares, convertible into 100,000,000 Series B Conversion Shares, (ii) the Release Date Warrants to purchase up to 500,000 the Release Date Warrant Shares, and (iii) the Enrollment Date Warrants to purchase up to 1,000,000 Release Date Warrant Shares. The Company generated approximately $175 million in gross proceeds, before fees and expenses, from the Series B Offering. The Series B Preferred Stock is convertible into common stock, subject to stockholder approval. The net proceeds are intended to fund the Phase 2b SAFEGUARD study of SAB-142 and for general corporate purposes.

See Note20, Subsequent Events, in our condensed consolidated financial statements for more information about the Series B Offering.

Based on the Company’s current level of operating expenses, existing resources will be sufficient to cover operating cash needs through the twelve months following the date of this report. In the future, the Company may 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 assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.

Sources of Liquidity

Since our inception, we have financed our operations primarily from revenue in the form of government grants and from equity financings.

Notes payable

Insurance Financing Note

We obtained financing for certain Director & Officer liability insurance policy premiums. In 2024, we entered into an agreement that assigned to AFCO Direct (the “Lender”) a first priority lien on and security interest in the financed policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums. If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy.

The total premiums, taxes, and fees financed under the current insurance financing agreement are approximately $516 thousand, for AFCO Direct with an annual interest rate of 7.37%. In consideration of the premium payment by the Lender to the insurance companies or the Agent or Broker (as defined in the agreement with the Lender), we unconditionally promise to pay the Lender the amount financed plus interest and other charges permitted under the agreement.

We did not have an insurance financing note payable at June 30, 2025. At December 31, 2024, we recognized approximately $276 thousand, as an insurance financing note payable in our condensed consolidated balance sheets. We incurred $1 thousand and $6 thousand of interest expense related to the insurance financing note for the three and six months ended June 30, 2025, respectively, and $4 thousand and $12 thousand for the three and six months ended June 30, 2024, respectively. Our current insurance financing agreement was repaid through installment payments, with the final payment on June 22, 2025.

In 2023, we entered into an agreement with First Insurance Funding, which assigned them a first-priority lien on the security interest in the financed policies and associated rights. During the six months ended June 30, 2024, we made payments on the prior insurance financing agreement with First Insurance Funding with an original principal balance of $765 thousand and an annual interest rate of 7.96%. This prior agreement, structured with similar lien and collateral terms, was fully repaid upon the final installment on September 22, 2024

Please refer to Note 9, Notes Payable, in our condensed consolidated financial statements for additional information on our debt.

Shelf Registration Statement

On May 3, 2023, we filed a Registration Statement on Form S-3 (Registration No. 333-271768) (the “Shelf Registration Statement”), declared effective on May 17, 2025 by the SEC, which includes a base prospectus that allows us to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $50.0 million. The Shelf Registration Statement is intended to preserve our flexibility to raise capital from time to time, if and when needed. On January 26, 2024, we entered into a Controlled Equity Offering℠ Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), relating to shares of our common stock registered for sale under the Shelf Registration Statement. In accordance with the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $20.0 million from time to time through Cantor, acting as our sales agent.

Cash Flows

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024:

Operating Activities

Net cash used in operating activities decreased by $3.5 million in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to a decrease in cash used in operating activities related to change in our operating assets and liabilities of $4.5 million, offset by an increase in our net loss adjusted for non-cash items of $1.0 million. Year-over-year changes in cash used by operating activities is explained by shifts in the working capital balances as we continue to invest in the development of our lead product candidate, SAB-142.

Investing Activities

Net cash used by investing activities decreased by $30.0 million in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to decreased purchases of short-term investments. Capital expenditures were minimal through the six months ended June 30, 2025. We do not anticipate a significant increase in capital asset purchases in the near term, as our investment focus remains on advancing our lead therapeutic candidate through Phase 2 clinical trials.

Financing Activities

Net cash used by financing activities decreased by $0.4 million in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, primarily due to the decrease in payments on the insurance financing note.

Contractual Obligations and Commitments

We enter into contracts in the normal course of business with third parties, including contract research organizations (“CRO”).

As of June 30, 2025, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations.

Income Taxes

Due to current and prior year losses we do not expect to have any Income Tax Provision.

We continue to record a valuation allowance on its net deferred tax assets. The valuation increased by approximately $4.5 million during the six months ended June 30, 2025. We have not recognized any reserves for uncertain tax positions.

Off-Balance Sheet Arrangements

We did not have, for the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

We have prepared our condensed consolidated financial statements in accordance with U.S. GAAP. Our preparation of these condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.

Our most critical accounting estimates and assumptions are included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025 and our most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 9, 2025. There have been no significant changes to our critical accounting policies during the three months ended June 30, 2025. See Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements for further details.

JOBS Act Accounting Election

The Jumpstart Our Business Startups (“JOBS”) Act, enacted in April 2012, permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have and intend to continue to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards, for an emerging growth company under Section 107 of the JOBS Act.

We may use these provisions until the last day of our fiscal year in which the fifth anniversary of the completion of our initial public offering occurred. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.235 billion, or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

We have elected to take advantage of certain of the reduced disclosure obligations in this Form 10-Q and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than the information you receive from other public companies in which you hold stock.

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, until those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will adopt the recently issued accounting standard.

Concentration of Credit Risk

The Company recognized no revenue for the three and six months ended June 30, 2025. We received 100% of our total revenue through grants from government organizations for the three and six months ended June 30, 2024, respectively. To date, no receivables have been written off.

Interest Rate Risk

As of June 30, 2025 and December 31, 2024, we had cash, cash equivalents, U.S. treasury securities, investments in exchange traded mutual funds, and money market funds of $5.7 million and $20.8 million, respectively, all of which was maintained in bank accounts, money market funds, mutual funds, and U.S. treasury securities. Our primary exposure to market risk is to interest income volatility, which is affected by changes in the general level of interest rates. A 10% change in the market interest rates would not have a material effect on our business, financial condition, or results of operations.

Foreign Currency Risk

We conduct materially all of our business in U.S. dollars. We do not have any foreign currency or other derivative financial instruments. Our primary exposure to changes in foreign currency exchange rates relates mainly to SAB Australia. We do not currently hedge our foreign currency exchange rate risk. As of June 30, 2025 and December 31, 2024, our liabilities denominated in foreign currencies were not material. Accordingly, we do not believe a 10% increase or decrease in current exchange rates would have a material effect on our financial results.

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 the evaluation as of June 30, 2025, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025, which we strongly encourage you to review (the “2024 Annual Report”). Other than as set forth below, there have been no material changes from the risk factors described in our 2024 Annual Report.

We are obligated to file a registration statement to register for resale the shares of common stock issuable upon conversion of all shares of Series B Preferred Stock, including shares of Series B Preferred Stock issuable upon the exercise of warrants. The sale of such underlying shares of common stock would represent the sale of a significant number of our securities in the public market, and the perception that such sales may occur, may cause the market price of our securities to decline significantly.

In connection with the Series B Offering, we are obligated to file a registration statement to register for sale all shares of common stock issuable upon conversion of all shares of Series B Preferred Stock, including shares of Series B Preferred Stock issuable upon exercise of the Enrollment Date Warrants and Release Date Warrants. If all shares of Series B Preferred Stock are converted, it would represent 2,690% of total common stock outstanding as of June 30, 2025. The registration of these securities, the sale of these securities in the public market, or the perception that holders of a large number of securities intend to sell their securities, could reduce the market price of our common stock and public warrants. Although each stockholder for whom the shares of common stock to be registered for resale hereunder is not permitted to convert their shares of Series B Preferred Stock into shares of common stock to the extent that after giving effect to such conversion, such holder would (together with such holder’s affiliates and related parties) beneficially own in excess of 4.99% (or 9.99% at the election of the holder) of the shares of common stock outstanding immediately after giving effect to such conversion, the market price of our common stock could decline if the holders of such shares sell them over time or are perceived by the market as intending to sell them.