SAB Biotherapeutics, Inc.

Notes to condensed consolidated FINANCIAL statements (Unaudited)

(1) Nature of Business and Liquidity

SAB Biotherapeutics, Inc., a Delaware corporation (“SAB”, “SAB Biotherapeutics” or “SAB BIO”, and together with its subsidiaries, the “Company”), is a clinical-stage biopharmaceutical company focused on developing multi-specific, high-potency, human immunoglobulin G (hIgG) to treat and prevent immune and autoimmune disorders. Using advanced genetic engineering and antibody science, SAB BIO developed a proprietary technology which holds the potential to generate additional novel therapeutic candidates utilizing the human immune response, without the need for human donors or convalescent plasma. SAB BIO has optimized genetic engineering in the development of transchromosomic cattle, or Tc-Bovine, to produce hIgG. SAB BIO's drug development production system is able to generate a diverse repertoire of specifically targeted, high-potency, hIgGs that can address a wide range of serious unmet needs in human diseases. The Company's lead candidate, SAB-142, targets autoimmune type 1 diabetes (“T1D”) with a disease-modifying therapeutic approach that aims to change the T1D treatment paradigm by delaying onset and potentially preventing disease progression of Stage 3 T1D patients. SAB-142 is currently being evaluated in newly diagnosed Stage 3 autoimmune T1D patients in a registrational Phase 2b clinical trial called SAFEGUARD.

Liquidity

As of September 30, 2026, the Company had an accumulated deficit of$174.6 million. The Company anticipates that it will continue to generate losses for the foreseeable future and expects the losses to increase as the Company funds product development, regulatory approval efforts, clinical trials, and commercial readiness activities, and will require additional capital to support its long-term plans.

The Company has funded its operations through, among other sources, the sale of equity securities, including the March 2026 Public Offering, and the exercise of Enrollment Date and Release Date Warrants from the Series B Offering, as defined in Note 8. During the three months ended September 30, 2026, the Company received gross proceeds of$13.4 million from the exercise of Enrollment Date Warrants and Release Date Warrants, before deducting placement agent fees. During the nine months ended September 30, 2026, the Company received gross proceeds of $95.0 million from the March 2026 Public Offering, before deducting underwriting discounts and commissions and offering expenses, and gross proceeds of$17.4 million from the exercise of Enrollment Date Warrants and Release Date Warrants, before deducting placement agent fees. As of September 30, 2026, the Company had cash, cash equivalents, and short-term and long-term investments of$205.3 million.

Based on the Company’s current level of operating expenses, existing resources will be sufficient to cover operating cash needs for at least one year from the date these condensed consolidated financial statements are issued. 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.

(2) Summary of Significant Accounting Policies

A summary of the significant accounting policies applied in preparation of the accompanying condensed consolidated financial statements is set forth below.

Basis of presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our audited consolidated financial statements, including the notes thereto, appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position, consolidated results of operations and other comprehensive income (loss) and consolidated cash flows, for the periods indicated, have been made. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or any other period.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net income (loss), stockholders' equity, or net cash flows from operating, investing or financing activities.

Emerging growth company status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. The Company will cease to be an emerging growth company on December 31, 2026, the last day of the fiscal year following the fifth anniversary of the January 14, 2021 closing of the initial public offering of Big Cypress Acquisition Corp.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (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. Beginning with its Annual Report on Form 10-K for the year ending December 31, 2026, the Company will no longer be eligible for the extended transition period and will be required to adopt new or revised accounting standards as of the effective dates applicable to public business entities, including any standards for which it previously applied private company effective dates. The Company does not expect the loss of emerging growth company status to have a material impact on its consolidated financial statements.

Principles of consolidation

The accompanying condensed consolidated financial statements include the results of the Company and its wholly owned subsidiaries, SAB Sciences, Inc., Diversity Therapeutics, Inc., SAB LLC, SAB Capra, LLC, Aurochs, LLC, and SAB BIO PTY LTD (“SAB Australia”). 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 key employees and obtaining and protecting intellectual property.

Use of estimates

Thepreparation 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 Private Placement Warrant and Preferred Tranche C Warrant liabilities, determination of the incremental borrowing rate (“IBR”) used in the calculation of the Company’s right-of-use-assets and lease liabilities, estimation of clinicaland other accruals and the valuation allowance on deferred tax assets. Actual amounts realized may differ from these estimates.

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, accrued interest receivable, accounts payable, accrued expenses and other current liabilities.

The Company accounts for warrants to purchase its common stock par value of $0.0001 per share (its “common stock”) pursuant to Accounting Standards Codification (“ASC”) Topic 470, Debt(“ASC 470”), and ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”), and classifies warrants for common stock as liabilities or equity. The warrants classified as liabilities are reported at their estimated fair value (see Note 11, Fair Value Measurements) and any changes in fair value are reflected in other income (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 10, Warrants.

Deferred Issuance Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred issuance costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of additional paid-in capital generated as a result of the issuance.

The Company didnot have any deferred issuance costs as of September 30, 2026. As of December 31, 2025, the Company had $0.2 million of deferred issuance costs, related to the Company’s Shelf Registration Statement. The Shelf Registration Statement is discussed further in Note 8, Stockholders’ Equity.

Short-term and long-term investments

The Company accounts for investments in accordance with ASC Topic 320, Investments - Debt and Equity Securities. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each reporting period.

At September 30, 2026, the Company’s short-term and long-term investments consisted of U.S. treasury securities with original maturity exceeding 90 days, and investments in exchange traded mutual funds. The Company classifies these securities as current and non-current. The Company considers all of its debt securities for which there is a determinable fair market value, and there are no restrictions on the Company’s ability to sell within the next twelve months, as available-for-sale securities.

In accordance with ASC Topic 321, Investments - Equity Securities, the Company recognizes the change in fair value of its equity securities with readily determinable fair values within other income in the condensed consolidated statements of operations and comprehensive income (loss), and available-for-sale debt securities are measured at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in the condensed consolidated balance sheets.

The Company reviews its investments at each reporting date to identify and evaluate whether a decline in fair value below the amortized cost basis of available-for-sale debt securities is due to credit-related factors and determines if such unrealized losses are the result of credit losses that require impairment. The Company records an allowance for credit losses on available-for-sale debt securities when a decline in fair value is determined to be credit-related, rather than recording a direct write-down of the investment's amortized cost. Factors considered in determining whether an unrealized loss is the result of credit-related factors include the extent to which the fair value is less than the cost basis, any changes to the rating of the security by a rating agency, the financial condition and near-term prospects of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any adverse legal or regulatory events affecting the issuer or issuer’s industry, any significant deterioration in economic condition and the

Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

The Company didnot recognize any credit losses on its short-term and long-term investments during thethree and nine months ended September 30, 2026 and 2025.

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. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the three and nine months ended September 30, 2026 and 2025.

Lease liabilities and right-of-use assets

The Company is party to certain contractual arrangements for equipment, lab space, and an animal facility, which meet the definition of leases under Financial Accounting Standards Board (“FASB”) 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.

The Company elected not to apply the recognition requirements of ASC 842 to short-term leases, which are deemed to be leases with a lease term of twelve months or less. Instead, the Company recognizes lease payments in the condensed consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term and variable payments in the period in which the obligation for these payments was incurred. The Company elected this policy for all classes of underlying assets.

Research and development expenses

Expenses incurred in connection with research and development activities are expensed as incurred. These include fees paid to consultants and various entities that perform certain research and testing on behalf of the Company, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.

During the three and nine months ended September 30, 2026 and 2025, the Company had contracts with multiple contract research organizations (“CRO”) to complete studies as part of research grant agreements. These costs include upfront, milestone and monthly expenses as well as reimbursement for pass through costs. All research and development costs are expensed as incurred except when the Company is accounting for refundable advance payments for goods or services to be used in future research and development activities. In these cases, these payments are capitalized at the time of payment and expensed in the period the research and development activity is performed. As actual costs become known, the Company will adjust the accrual; such changes in estimate may result in material changes in the Company’s clinical study accrual, which could also materially affect reported results of operations. For the three and nine months ended September 30, 2026 and 2025, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials.

Property, Plant and Equipment

The Company records property, plant, and equipment at cost less depreciation and amortization. Depreciation is calculated using straight-line methods over the estimated useful lives. 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, andno impairment was deemed necessary, during thethree and nine months ended September 30, 2026 and 2025.

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. The Company determines the fair value of common stock based on the closing market price on the date of the 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 often years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in the condensed consolidated statements of operations based on the function to which the related services are provided. The Company recognizes stock-based compensation expense over the vesting period.

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 using a weighted average of the Company’s historical volatility and the historical volatilities of a group of industry peer companies over a period 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.

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 condensed consolidated balance sheets. 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.

The Company maintains a 100% valuation allowance on its net deferred tax assets. The Company has not recognized any reserves for uncertain tax positions.

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 and convertible preferred stock. See Note 4, Earnings per share, for further details.

Segment reporting

In accordance with ASC 280, Segment Reporting, the Company’s business activities are organized intoone 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.

Australian Research and Development Tax Credit

In June 2023, the Company formed a new subsidiary in Australia, SAB Australia, a proprietary limited company, primarily to conduct preclinical and clinical activities for product candidates. SAB Australia's research and development activities qualify for the Australian government's tax credit program, which provides a 48.5%credit for qualifying research and development expenses. The research and development incentive is one of the key elements of the Australian Government's support for Australia's innovation systemand is supported by legislative law primarily in the form of the Australian Income Tax Assessment Act 1997, as long as eligibility criteria are met. Under the program, a percentage of eligible research and development expenses incurred by the Company through SAB Australia are reimbursed.

The Company recognizes other income from the Australian research and development incentive when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. Management has assessed the Company's research and development activities and expenditures to determine which are likely to be eligible under the research and development incentive regime described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time, which is included in other income in the condensed consolidated statements of operations and comprehensive income (loss). The Company recognized$0.1 million and$0.4 million in tax credit income for the three and nine months ended September 30, 2026, respectively, and$0.4 million and$1.2 million, in tax credit income for the three and nine months ended September 30, 2025, respectively.

(3) New accounting standards

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Topic 220)”. ASU 2024-03 requires additional disclosure in the notes to financial statements of specified information about certain expenses such as purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other expenses which are presented on the face of the income statement within continuing operations. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its condensed consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (”ASU 2025-06”) and is effective January 1, 2028 with early adoption permitted. ASU 2025-06 modernizes the accounting for internal use software costs and requires entities to start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is still assessing the impact of adopting this standard.

(4) Earnings per share

Since the Company reported a net loss for the three and nine months ended September 30, 2026, it was required by ASC 260 to use basic weighted-average shares outstanding when calculating diluted net loss per share for the three and nine months ended September 30, 2026, as the potential dilutive securities are anti-dilutive. For the three and nine months ended September 30, 2025, the Company reported net income, which resulted primarily from a non-cash gain on the change in fair value of the Enrollment Date Warrants and Release Date Warrants prior to their reclassification to stockholders’ equity on September 26, 2025. For those periods, undistributed earnings were allocated to participating securities under the two-class method, and diluted net loss per share reflects the assumed conversion of the Series B Preferred Stock and the assumed exercise of the Enrollment Date Warrants and, for the three months ended September 30, 2025, the Release Date Warrants.

In addition, regardless of whether the Company is in a net income or net loss position, the Company evaluates whether gains on the change in fair value of its liability-classified warrants, which consist of the Preferred Tranche C Warrants, Public Warrants, and Private Placement Warrants, are dilutive. A warrant is dilutive if the average market price of the Company's common stock for the period exceeds the warrant's exercise price, in which case the numerator would be adjusted to remove the gain and the incremental shares would be included in the denominator under the treasury stock method. For the three and nine months ended September 30, 2026, the exercise prices of these warrants exceeded the average market price of the Company's common stock, and as a result, the warrants would not have resulted in incremental shares under the treasury stock method. Accordingly, no adjustment was made to the numerator or denominator for these warrants, and they are included in the potentially dilutive securities excluded from the computation of diluted net loss per share below.

The following is a reconciliation of the numerator and denominator used to calculate basic earnings per share and diluted earnings per share for thethree and nine months ended September 30, 2026 and 2025 (in thousands, except share and per share amounts):

Included within weighted average common shares outstanding for the three and nine months ended September 30, 2026, are 2,753,246 and 1,973,834 weighted-average shares, respectively, issuable upon the exercise of the 2,753,246 pre-funded warrants issued in March 2026, as the warrants are exercisable at any time for nominal consideration, and, as such, the shares are considered outstanding for the purpose of calculating basic and diluted net loss per share attributable to common stockholders. No pre-funded warrants were outstanding during 2025.

The Company’s other potentially dilutive securities for the three and nine months ended September 30, 2026, which include stock options, restricted stock awards, common stock warrants, common stock underlying preferred stock warrants, earnout shares, and contingently issuable earnout shares have been excluded from the computation of diluted net income (loss) per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

For the three and nine months ended September 30, 2025, adjustments were made to the numerator for changes in fair value that would not have occurred assuming the exercise of in-the-money warrants to purchase Series B Preferred Stock, which were classified as liabilities until September 26, 2025. The numerator was adjusted by $62.0 million and $40.1 million for thethree and nine months ended September 30, 2025, respectively, under the treasury stock method, and the denominator was adjusted for the assumed exercise of these warrants and the conversion of all outstanding shares of Series B Preferred Stock under the if-converted method.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

(1)

Contained within common stock warrants are the 575,000 shares of common stock underlying public warrants (the “Public Warrants”),20,860 shares of common stock underlying warrants held by assignees of Big Cypress Holdings, LLC (the “Private Placement Warrants”),736,337 shares underlying warrants issued to the investors in the December 2022 Private Placement (the “PIPE Warrants”),21,091 shares underlying warrants issued to the placement agent in the December 2022 Private Placement (the “PIPE Placement Agent Warrants”), and 850,119 shares underlying the Preferred PIPE Placement Agent Warrants issued to the placement agent in the September 2023 Offering. The 2025 amount also included 30,000 shares underlying the Ladenburg Warrants, which expired unexercised in March 2026. The Public Warrants and Private Placement Warrants expired on October 22, 2026. See Note 10, Warrantsfor further details on the Company’s outstanding warrants.

(2)

Represents 4,504,824 and 4,617,681 shares of common stock underlying 28,380 and 29,091 issued and outstanding shares of Series A-2 Preferred Stock, at September 30, 2026 and 2025, respectively. See Note 8, Stockholders’ Equity for further details on the Company’s preferred stock.

(3)

Represents 17,002,381 shares of common stock underlying 107,115 outstanding Preferred Tranche C Warrants (as defined below) at September 30, 2026 and 2025. See Note 10, Warrants for further details on the Company’s outstanding warrants.

(4)

Represents 49,650,000 and 90,496,700 shares of common stock underlying the Release Date Warrants and Enrollment Date Warrants, respectively, at September 30, 2026, and 50,000,000 shares of common stock underlying the Release Date Warrants at September 30, 2025.

(5) Property, plant and equipment

As of September 30, 2026 and December 31, 2025, the Company’s property, plant and equipment was as follows:

Depreciation and amortization expense was$0.8 million and$2.3 million for the three and nine months ended September 30, 2026, respectively, and$0.7 million and$2.3 million for the three and nine months ended September 30, 2025, respectively. In June 2026, the Company purchased unimproved land and began construction of a second farm facility in South Dakota to increase manufacturing capacity and establish a redundant herd to support long-term commercial supply for SAB-142.

(6) Leases

Operating Leases

The Company has an operating lease for lab space from Sanford Health, that started in June 2014 and initially ended in June 2019, at which time the lease was extended through August 2024. This lease was renewed in January 2025 and amended in April 2026 to reduce the leased space, and has afive-year term ending on December 31, 2029.

The Company entered into a lease for office, laboratory, and warehouse space in November 2020, as amended in July 2022, and renewed in November 2023. This renewed 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 of September 30, 2026, because it was not reasonably certain that the Company would exercise them. In October 2026, the Company exercised its option to extend this lease for an additional three-year term through November 2029.

The Company entered into a lease for office space in Miami Beach, Florida in April 2024. In September 2025, the Company terminated this lease and entered into a new lease for expanded space. The new lease commenced in January 2026 with afive-year term.

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 $4.0 million in construction costs, with a 20-year term at an interest rate of 8%. 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.

The lease agreements do not require material variable lease payments, residual value guarantees or restrictive covenants.

The Company’s weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of September 30, 2026 and December 31, 2025 are:

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 condensed consolidated balance sheets as of September 30, 2026 (in thousands):

The components of lease expense were as follows for thethree and nine months ended September 30, 2026 and 2025 (in thousands):

(7) Accrued Expenses and Other Current Liabilities

As of September 30, 2026 and December 31, 2025, accrued expenses and other current liabilities consisted of the following (in thousands):

(8) Stockholders’ Equity

Authorized and Outstanding Capital Stock

The total number of shares of the Company’s authorized capital stock is 810,000,000. The total amount of authorized capital stock consists of 800,000,000 shares of common stock and 10,000,000 shares of preferred stock. As of September 30, 2026,91,138,023 shares of common stock,28,380 shares of Series A Preferred Stock, and 522,629 shares of Series B Preferred Stock were outstanding.

Series A Preferred Stock and Warrants

On September 29, 2023, the Company entered into a securities purchase agreement (the “September 2023 Purchase Agreement”) with certain accredited investors, in a private placement (the “September 2023 Offering”), pursuant to which the Company issued and sold 7,500 shares of Series A-1 Convertible Preferred Stock and Preferred Tranche A, B and C Warrants (collectively, the “Preferred Warrants”). During the fourth quarter of 2023, holders exercised Preferred Tranche A Warrants for an aggregate of 59,654 shares of Series A-1 Preferred Stock, for gross proceeds of $59.7 million, bringing the total of Series A-1 Preferred Stock issued under the September 2023 Offering and related exercises to 67,154 shares. All unexercised Preferred Tranche A and Preferred Tranche B

Warrants were subsequently forfeited and the Preferred Tranche C Warrants remain outstanding and exercisable until the five (5) year anniversary of their exercisability date.

Following receipt of required stockholder approval,24,918 shares of Series A-1 Preferred Stock were automatically converted into an aggregate of 3,954,674 shares of common stock at a conversion price of $6.30 per share and the remaining 42,236 shares of Series A-1 Preferred Stock were converted into an equal number of shares of Series A-2 Preferred Stock, which are convertible into common stock at the same conversion price of $6.30 per share. Holders of Series A Preferred Stock are entitled to receive dividends on an as-converted-to-common-stock basis and to vote together with holders of common stock, subject to a beneficial ownership blocker of either 4.99% or 9.99%, as elected by each holder.

There wereno Series A-2 Preferred Stock conversions during thenine months ended September 30, 2026, and 13,639 shares of Series A-2 Preferred Stock were converted into 2,164,918 shares of common stock during the year ended December 31, 2025.

Series B Convertible Preferred Stock and Warrants

On July 21, 2025, the Company entered into a securities purchase agreement with certain accredited investors (the “July 2025 Purchase Agreement”), in connection with a private placement (the “Series B Offering”) of 1,000,000 shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock,” and such shares, the “Series B Shares”), initially convertible into 100,000,000 shares of common stock (the “Conversion Shares”), together with Release Date Warrants to purchase up to 500,000 shares of Series B Preferred Stock with an exercise price of $218.75 per share, and Enrollment Date Warrants to purchase up to 1,000,000 shares of Series B Preferred Stock with an exercise price of $175.00 per share. The closing of the Series B Offering occurred on July 22, 2025 and generated gross proceeds of $175.0 million and net proceeds of $163.9 million after $11.1 million of offering costs. The Enrollment Date Warrants and Release Date Warrants were initially classified as liabilities at fair value because the underlying preferred shares were redeemable under certain conditions, with the remaining proceeds allocated to the Series B Preferred Stock.

At the Company’s special meeting of stockholders held on September 26, 2025 (the “2025 Special Meeting”), stockholders approved the issuance of the common stock underlying the Series B Preferred Stock (the “Requisite Approval”), after which 361,442 shares of Series B Preferred Stock converted into 36,144,200 shares of common stock, subject to a 4.99% beneficial ownership limitation. Upon receiving the requisite approval on September 26, 2025, the Series B Preferred Stock was no longer redeemable, and the Release Date Warrants and Enrollment Date Warrants were reclassified from liabilities to stockholders’ equity. Following the requisite approval on September 26, 2025, the change in fair value of $62.0 million was recorded as other income.

There were 95,033 Enrollment Date Warrants and 3,500 Release Date Warrants exercised for net proceeds of$15.6 million and$0.7 million, respectively, during the nine months ended September 30, 2026. There wereno Enrollment Date Warrants or Release Date Warrants exercised during the year ended December 31, 2025.

March 2026 Public Offering

On March 17, 2026, the Company entered into an underwriting agreement (the “March 2026 Public Offering”), pursuant to which the Company issued and sold 19,324,677 shares of common stock (the “Firm Shares”), at a public offering price of $3.85 per share, and pre-funded warrants to purchase up to 2,753,246 shares of common stock (the “Pre-Funded Warrants”), at a public offering price of $3.8499 per Pre-Funded Warrant (the Firm Shares price less the $0.0001 per share exercise price of each Pre-Funded Warrant). The sale of the Firm Shares and Pre-Funded Warrants closed on March 19, 2026, resulting in gross proceeds of approximately $85.0 million and net proceeds of approximately $79.3 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The Company also granted the underwriters a 30-day option to purchase up to an additional 3,311,688 shares of common stock at the public offering price, less underwriting discounts and commissions (the “Optional Shares”). As of March 31, 2026, the underwriters partially exercised their option and purchased an additional 2,000,000 shares of common stock at the public offering price of $3.85 per share, less underwriting discounts and commissions, resulting in additional net proceeds of $7.2 million. In April 2026, the underwriters partially exercised their option and purchased an additional 610,188 shares of common stock at the public offering price of $3.85 per share, less underwriting discounts and commissions, resulting in additional net proceeds of $2.2 million. The remaining Optional Shares of 701,500 expired without exercise in April 2026.

The Company received aggregate net proceeds from the offering, including the partial exercise of the underwriters’ option, of approximately $88.7 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Issuance costs were allocated between the common stock and the pre-funded warrants on a relative fair value basis and charged to additional paid-in capital.

Earnout Shares

On October 22, 2021 (the “Closing Date”), the Company consummated the business combination (the “Business Combination”) contemplated by the agreement and plan of merger, dated as of June 21, 2021, as amended on August 12, 2021, among Big Cypress Acquisition Corp., a Delaware corporation (“BCYP”), Big Cypress Merger Sub Inc. (“Merger Sub”), the Company, and Shareholder Representative Services LLC (the “Business Combination Agreement”). Upon closing of the Business Combination, 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.”

The Business Combination Agreement included an earnout provision under which SAB Biotherapeutics’ pre-closing securityholders (including vested option holders) had the contingent right to receive up to an aggregate of 1,200,000 additional shares (the “Earnout Shares”), released in four equal 25% increments if, at any time during thefive years following the Closing Date, the volume weighted average price (“VWAP”) of the Company’s common stock equaled or exceeded, $150.00, $200.00, $250.00, and $300.00, respectively, for any 20 trading days within a period of 30 consecutive trading days (or upon a qualifying change in control at a per share price exceeding the applicable threshold). Of the 1,200,000 Earnout Shares,150,806 were contingently issuable and 1,049,194 were legally issued and outstanding as of September 30, 2026, subject to return to the Company if the applicable VWAP thresholds were not met within the five-year period. Thefive-year earnout period ended on October 22, 2026 without any of the VWAP thresholds or a qualifying change in control having been achieved. As a result, the 150,806 contingently issuable Earnout Shares were not issued, and the 1,049,194 Earnout Shares held in escrow were released to the Company as treasury shares. The forfeiture had no impact on the Company’s condensed consolidated statement of operations and comprehensive income (loss).

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 1,200,000 Earnout Shares was $101.3 million, recorded as a stock dividend reducing additional paid-in capital, offset by the increase in additional paid-in capital associated with the Business Combination.

Shelf Registration Statement

On December 29, 2025, the Company filed a Registration Statement on Form S-3 (Registration No. 333-292482) (the “Shelf Registration Statement”), declared effective on January 7, 2026 by the SEC, which includes a base prospectus that allows the Company 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 $300.0 million. The Shelf Registration Statement is intended to preserve the Company’s flexibility to raise capital from time to time, if and when needed.

(9) Stock Option Plans

2014 Equity Incentive Plan

In 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 Company no longer grants new awards under the 2014 Equity Incentive Plan, and outstanding awards remain subject to its terms, which are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As of September 30, 2026, there were 535,204 shares available for grant and 193,446 shares underlying outstanding grants.

2021 Equity Incentive Plan

In 2021, the Company approved the 2021 Omnibus Equity Incentive Plan (as amended, the “2021 Equity Incentive Plan”). The 2021 Equity Incentive Plan provides for grants of stock options, restricted stock units and other stock-based awards to employees, directors, and non-employee consultants. The 2021 Equity Incentive Plan includes an annual evergreen provision that increases the shares reserved for issuance at the beginning of each calendar year, subject to a cap, and has been amended to increase the shares available for grant, most recently by stockholder approval at the 2024 Annual Meeting and the 2025 Special Meeting. The terms of the 2021 Equity Incentive Plan and these amendments are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As of September 30, 2026,47,592,575 shares of common stock were reserved for issuance under the 2021 Equity Incentive Plan, with 7,296,317 shares available for grant and 40,296,258 shares underlying outstanding grants.

Employee Stock Purchase Plan

The Company offers an Employee Stock Purchase Plan (“ESPP”) that allows eligible employees to purchase shares of common stock at a discount of up to 15%from the lower of the fair market value at the beginning or end of the offering period. Under ASC 718, the ESPP is classified as compensatory, and stock-based compensation expense is recognized for the fair value of the discount and any embedded option features. No shares were issued under the ESPP during thethree and nine months ended September 30, 2026 and 2025, andno stock-based compensation expense was recognized. As of September 30, 2026,100,000 shares remained available for future issuance.

Stock Options

Stock option activity for employees and non-employees under the Equity Compensation Plans for thenine months ended September 30, 2026, was as follows (in thousands, except share and per share amounts):

Total unrecognized compensation cost related to non-vested stock options as of September 30, 2026, was approximately$87.4 million and is expected to be recognized within future operating results over a weighted-average period of 3.09 years.

The weighted average grant date fair value of options granted during the three and nine months ended September 30, 2026, was$3.10 and$3.56 per share, respectively. During the three and nine months ended September 30, 2026,4,571,199 and 4,866,998 options vested with a fair value totaling$8.7 million and$9.7 million, respectively.

The weighted average grant date fair value of options granted during the three and nine months ended September 30, 2025, was$1.92 and$1.92 per share, respectively. During the three and nine months ended September 30, 2025,420,825 and 819,701 options vested with a fair value totaling$1.1 million and$2.7 million, respectively.

The estimated fair value of stock options granted to employees and consultants during thethree and nine months ended September 30, 2026 and 2025, was calculated using the Black-Scholes option-pricing model using the following assumptions:

Restricted Stock Units

Stock award activity for employees and non-employees under the Equity Compensation Plans for thenine months ended September 30, 2026, was as follows:

At September 30, 2026, the unrecognized equity-based compensation related to restricted stock units (“RSUs”) outstanding was de minimis. During the nine months ended September 30, 2026, a total of 10,660 RSUs vested and issued. The unrecognized expense for restricted stock units is expected to be recognized within future operating results over a weighted average period of 0.42 years.

Stock-based compensation expense

Stock-based compensation expense for thethree and nine months ended September 30, 2026 and 2025, was as follows (in thousands):

(10) Warrants

Liability Classified Warrants

Public Warrants

The Public Warrants were issued on October 22, 2021. Each whole Public Warrant entitled the holder to purchaseone share of the Company's common stock at a price of $115.00 per share, subject to adjustment. The Company could redeem the Public Warrants in whole and not in part, at $0.01 per Public Warrant, upon not less than 30 days’ prior written notice of redemption, if the last sale price of the common stock equaled or exceeded $180.00 per share for any 20 trading days within a 30-trading-day period, in which case the Company could require holders to exercise on a cashless basis. The Public Warrants remained outstanding as of September 30, 2026 and expired unexercised on October 22, 2026 (the fifth anniversary of the Business Combination). The Public Warrants have no further value and are no longer exercisable.

Private Placement Warrants

The Private Placement Warrants were issued on October 22, 2021, were exercisable on a cashless basis and were non-redeemable as long as they were held by the initial purchasers or their permitted transferees. If the Private Placement Warrants were transferred to other holders, they became redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Private Placement Warrants remained outstanding as of September 30, 2026 and expired unexercised on October 22, 2026(the fifth anniversary of the Business Combination). The Private Placement Warrants have no further value and are no longer exercisable.

September 2023 Purchase Agreement Warrants

The Preferred Tranche C Warrants were issued in connection with the Company’s September 2023 Purchase Agreement of Series A-1 Convertible Preferred Stock, in which the Company also issued Preferred Tranche A Warrants, Preferred Tranche B Warrants and Preferred Tranche C Warrants. The Preferred Tranche A Warrants were exercised or forfeited and the associated Preferred Tranche B Warrants were forfeited in 2023, leaving the Preferred Tranche C Warrants as the only tranche outstanding as of September 30, 2026. The Preferred Tranche C Warrants expire on November 23, 2028, unless exercised or redeemed. Once expired, the Preferred Tranche C Warrants will have no further value and will no longer be exercisable.

As of September 30, 2026, the Company had 107,115 Preferred Tranche C Warrants outstanding to purchase shares of Series A-3 Preferred Stock having an aggregate exercise price of approximately $107.1 million.

Equity Classified Warrants

PIPE Warrants and PIPE Placement Agent Warrants

In December 2022, the Company completed a private placement (the “December 2022 Private Placement”) in which it sold 736,337 shares of common stock and the PIPE Warrants exercisable for up to 736,337 shares of common stock. The combined purchase price of each share and accompanying PIPE Warrant was $10.80, except three participating directors of the Company each paid at a $1.25 premium per share and accompanying PIPE Warrant. Each PIPE Warrant has an exercise price of $10.80 per share and is exercisable for five years from the date of issuance.

In connection with the December 2022 Private Placement, the Company issued Brookline Capital Markets the PIPE Placement Agent Warrants to purchase up to 21,091 shares of common stock. The PIPE Placement Agent Warrants have an exercise price equal to $13.50 per share and expire five years from the date of issuance.

2023 Ladenburg Agreement Warrants

On March 21, 2023, the Company entered into a settlement agreement with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) pursuant to which the Company issued warrants to purchase up to 30,000 shares of common stock (the “Ladenburg Warrants”), exercisable forthree years from the date of issuance at $5.424 per share. The Ladenburg Warrants expired unexercised as of March 31, 2026.

Preferred PIPE Placement Agent Warrant

On November 21, 2023, the Company issued to Chardan Capital Markets LLC, the placement agent for the September 2023 Offering, a warrant to purchase 850,119 shares of the Company’s common stock (the “Preferred PIPE Placement Agent Warrants”). The Preferred PIPE Placement Agent Warrants have an exercise price equal to $6.30 per share (subject to adjustment for stock dividends and splits) and are exercisable in whole or in part, at any time or times on or after the issuance date and on or before October 2, 2028.

Preferred PIPE Series B Warrants

On July 21, 2025, the Company issued the Release Date Warrants and Enrollment Date Warrants to various investors as part of the Series B Offering providing for the purchase of up to 500,000 and 1,000,000 shares, respectively, of Series B Preferred Stock at exercise prices of $218.75 and $175.00 per share, respectively. The Release Date Warrants have an expiration of the earlier of five years from the issuance date or the Phase II Release Date (as defined in the Release Date Warrant). The Enrollment Date Warrants have an expiration date of the earlier of five years from the issuance date or the Phase II Enrollment Date (as defined in the Enrollment Date Warrant).

Pre-Funded Warrants

In March 2026, the Company issued pre‑funded warrants to purchase up to 2,753,246 shares of common stock at a public offering price of $3.8499 per warrant, which represents the public offering price of $3.85 per share of common stock less the $0.0001 exercise price per share.

The following table summarizes warrant activity for thenine months ended September 30, 2026 and the year ended December 31, 2025:

(1)

On January 1, 2025,42,846 Preferred Tranche B Warrants expired, unexercised. The valuation as of December 31, 2024, was based on a risk-free interest rate of 3.93%, an expected remaining term of 0.23 periods, implied volatility of 75%, and an underlying stock price of $309.37.

Presentation and Valuation of the Warrants

Public Warrants and Private Placement 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 condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025. Changes in fair value are recognized within changes in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2026 and 2025.

The Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis. Specifically, 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 assignees of Big Cypress Holdings LLC, were classified as a Level 3 fair value measurement, due to the use of unobservable inputs. See Note 11, Fair Value Measurements, for changes in fair value of the Private Placement Warrants.

The key inputs into the valuations as of September 30, 2026 and December 31, 2025, were as follows:

Series A Preferred Warrants

The Series A Preferred Warrants are accounted for as liabilities in accordance with ASC 480 and 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equityand are presented within warrant liabilities on the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025. Derivative-liability classification is required because, upon a fundamental transaction, the Company would be obligated to repurchase all outstanding Series A Preferred Warrants for cash equal to the Black-Scholes value of the unexercised portion of each warrant. Changes in fair value are recognized within changes in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2026 and 2025.

The Series A Preferred Warrants were classified as Level 3 fair value measurements, due to the use of unobservable inputs. See Note 11, Fair Value Measurements, for changes in fair value of the Preferred Warrants.

The key inputs utilized in determining the fair value of each Preferred Tranche C Warrant as of September 30, 2026 and December 31, 2025, were as follows:

(1)

Reflects a probability-weighted input derived from multiple Black-Scholes calculations. These calculations incorporate the Company’s estimated probability of survival, assuming SABS’ intellectual property yields positive results in forthcoming clinical trials, allowing the Company to continue as a going concern rather than face dissolution before 2028. The probability of survival was 70.0% and 40.0% as of September 30, 2026 and December 31, 2025, respectively.

(11) Fair Value Measurements

The following tables present information about the Company's assets and liabilities that are measured at fair value on a recurring basis at September 30, 2026 and December 31, 2025, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value (in thousands):

The following table provides a summary of the changes in Level 3 fair value measurements for the Private Placement Warrant liability:

The following table provides a summary of the changes in Level 3 fair value measurements for the Preferred Warrant liabilities:

As of September 30, 2026 and December 31, 2025, the Company didnot 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, accrued interest receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to their near-term maturities.

(12) Investments

Available-For-Sale Debt Securities

At September 30, 2026, the fair value and amortized cost of the Company’s available-for-sale debt securities, summarized by type of security, consisted of the following (in thousands):

At December 31, 2025, the fair value and amortized cost of the Company’s available-for-sale debt securities, summarized by type of security, consisted of the following (in thousands):

The amortized cost and estimated fair value by maturity or next repricing date of investment securities at September 30, 2026 are shown in the following table. Fixed rate securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. Accordingly, actual maturities may differ from contractual maturities.

The following table shows gross unrealized losses and fair values of available-for-sale securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position as of September 30, 2026 (in thousands, except for number of securities):

The following table shows gross unrealized losses and fair values of available-for-sale securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position as of December 31, 2025 (in thousands, except for number of securities):

The unrealized losses on the Company’s available-for-sale debt securities as of September 30, 2026 and December 31, 2025 were caused by fluctuations in market value and interest rates as a result of the economic environment. The Company concluded that an allowance for credit losses was unnecessary as of September 30, 2026 and December 31, 2025 because the decline in the market value was attributable to changes in market conditions and not credit quality, and that it is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery.

Gross realized gains and losses on the sale of short-term and long-term investments are included in other income in the Company’s condensed consolidated statements of operations and comprehensive income (loss). The following table summarizes the Company’s gross realized gains and losses on the sale of available-for-sale debt securities:

Accrued interest receivable related to the above investment securities was$1.5 million and$0.9 million at September 30, 2026 and December 31, 2025, respectively, and is included within accrued interest receivable on the condensed consolidated balance sheets.

Equity Securities

The Company holds investments in mutual funds that are classified as equity securities, primarily representing diversified portfolios of publicly traded equity instruments managed by third-party investment advisors. As of September 30, 2026 and December 31, 2025, the Company had$15.4 million and$59.1 million, respectively, of equity securities included within short-term investments on the condensed consolidated balance sheets. The following is a summary of unrealized and realized gains (losses) recognized on equity securities included in other income (expense) in the condensed consolidated statements of operations and comprehensive income (loss).

(13) Commitments and Contingencies

Legal Proceedings

From time to time, the Company may become subject to legal proceedings and claims arising in the ordinary course of business. The Company accrues a liability for such matters when a loss is probable and reasonably estimable. As of September 30, 2026, the Company was not a party to any material legal proceedings and, to its knowledge, none were threatened.

Contractual Obligations with Vendors

The Company enters into contracts in the normal course of business with contract research organizations (“CROs”), contract manufacturing organizations and other vendors for clinical trial, manufacturing and other services. These contracts are generally cancelable upon notice at the Company’s option and do not include significant cancellation penalties. Payments due upon cancellation consist of payments for services performed or expenses incurred, including non-cancelable obligations of the service providers, through the date of cancellation.

Manufacturing Service Agreement

In April 2026, the Company entered into a Master Manufacturing Services Agreement (the “MSA”) with Emergent BioSolutions Canada Inc. (“Emergent”) for the clinical and commercial manufacturing of SAB-142 (the “Product”). The MSA runs for five years from FDA approval of the Product and includes a minimum aggregate spend of $36.0 million following approval. Because FDA approval has not occurred, the Company hasnot recognized any liability related to the minimum spend commitment as of September 30, 2026.

Breakthrough T1D Grant and PRISE-hATG Study

In July 2026, the Company agreed to co-fund the investigator-led Phase 3 PRISE-hATG study of SAB-142, which is supported by a grant from Breakthrough T1D. The Company paid its funding commitment of $1.4 million. The Company has also agreed to make contingent payments to Breakthrough T1D of up to five times the grant amount (subject to a cap on the grant amount of $3.9 million) upon the occurrence of certain events, including regulatory approval of SAB-142. As of September 30, 2026, the Company hasnot recorded a liability for these contingent payments because the underlying events are not considered probable.

(14) Segment Reporting

Operating segments are defined as components of the entity for which separate financial information is made available and that is regularly evaluated by the chief operating decision maker (CODM) in making decisions regarding resource allocation and assessing performance. The Company's CODM is its chief executive officer and the Company manages its operations as asingle segment for the purposes of assessing performance and making operating decisions. The Company is focused on the development of a human anti-thymocyte globulin focused on preventing or delaying the progression of T1D.

The CODM assesses the Company's performance by reviewing GAAP operating expense and significant expenses by function along with the annual budget. The chief operating decision maker considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources.

The following table is representative of the significant expense categories regularly provided to the CODM when managing the Company's single reporting segment. A reconciliation to condensed consolidated operating expenses as our single segment operating loss for thethree and nine months ended September 30, 2026 and 2025, is included in the table below (in thousands):

The measure of segment assets is reported on the condensed consolidated balance sheets as cash and cash equivalents and short-term and long-term investments.

Long-lived assets are reported on the condensed consolidated balance sheets as property, plant and equipment, net of accumulated depreciation and these assets are held in the U.S.

(15) Subsequent Events

The Company has evaluated subsequent events through the date of issuance of these condensed consolidated financial statements. On October 22, 2026, thefive-year earnout period under the Business Combination Agreement ended and the 1,049,194 Earnout Shares held in escrow were returned to the Company as treasury shares (see Note 8, Stockholders’ Equity). Also on October 22, 2026, the 575,000 Public Warrants and 20,860 Private Placement Warrants expired unexercised in accordance with their terms (see Note 10, Warrants). On October 22, 2026, The Nasdaq Stock Market LLC filed a Form 25 with the SEC to delist the Public Warrants, and the delisting became effective on October 23, 2026. The withdrawal of the registration of the Public Warrants under Section 12(b) of the Exchange Act will become effective 90 days after the filing of the Form 25. Other than as disclosed above and elsewhere in these notes to the condensed consolidated financial statements, the Company has not identified any subsequent events requiring recognition or disclosure in these condensed consolidated financial statements.