SAB Biotherapeutics, Inc.

Previous wording

We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or hIgG, to address immunology 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 T1D and other autoimmune disorders. Our internally discovered antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgG and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.

Current wording

We are a clinical-stage biopharmaceutical company focused on developing multi-specific, high-potency, human immunoglobulin G (hIgG) to treat and prevent immune and 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. The Company’s lead candidate, SAB-142, targets autoimmune 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.

Previous wording

Our proprietary platform, referred to as holds the potential to generate additional novel therapeutic candidates to expand our pipeline. Our platform utilizes 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.

Current wording

We have optimized genetic engineering in the development of transchromosomic cattle, or Tc-Bovine™, to 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.

Previous wording

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. For the years ended December 31, 2024 and 2023 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.

Current wording

For the years ended December 31, 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.

Previous wording

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 expenses.

Current wording

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

Previous wording

Research and development expenses increased by $13.7 million, or 83.2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increases in outside lab services (year-over-year increase of $4.7 million, 479.4%), laboratory supplies (year-over-year increase of $0.4 million, 39.9%), an out-of-period adjustment of $0.9 million, salaries and benefits (year-over-year increase of $3.5 million, 53.4%), project consulting (year-over-year increase of $1.1 million, 288.6%), overhead costs (year-over-year increase of $0.5 million, 9.0%), clinical trial costs (year-over-year increase of $3.4 million, 415.0%), offset by contract manufacturing costs (year-over-year decrease of $0.4 million, 100.0%) and animal care (year-over-year decrease of $0.4 million, 43.2%). 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.

Current wording

Research and development expenses increased by $4.1 million, or 13.6%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to increases in salaries and benefits (year-over-year increase of $4.8 million, 47.8%; clinical trial costs (year-over-year increase of $6.0 million, 143.5%; animal care (year-over-year increase of $0.1 million, 28.6%); offset by a decrease in outside lab services (year-over-year decrease of $4.2 million, 74.2%); laboratory supplies (year-over-year decrease of $0.1 million, 5.8%); project consulting (year-over-year decrease of $0.9 million, 64.5%); and overhead costs (year-over-year decrease of $1.6 million, 64.5%). 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.

Previous wording

General and administrative expenses decreased by $9.8 million, or 41.3%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year decrease of $1.5 million, 25.3%); non-capitalized financing costs (year-over-year decrease of $7.5 million, 100.0%); salaries and benefits (year-over-year decrease of $0.2 million, 2.6%); insurance costs (year-over-year decrease of $0.5 million, 31.7%); and forgiveness of a trade payable of $0.7 million; offset by project consulting (year-over-year increase of $0.6 million, 131.5%).

Current wording

General and administrative expenses increased by $0.6 million, or 4.4%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year increase of $1.1 million, 26.2%); project consulting (year-over-year increase of $0.2 million, 23.4%); offset by a decrease in salaries and benefits (year-over-year decrease of $0.6 million, 6.7%); insurance costs (year-over-year decrease of $0.1 million, 8.4%).

Previous wording

Interest income increased by $701 thousand, or 119.84% for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.

Current wording

Interest income increased by $0.1 million, or 11.36% for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.

Previous wording

As of December 31, 2024 and December 31, 2023, we had $20.8 million and $56.6 million, respectively, of cash, cash equivalents and investments.

Current wording

As of December 31, 2025 and December 31, 2024, we had $143.5 million and $20.8 million, respectively, of cash, cash equivalents and investments.

Previous wording

We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced level there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary. Based on our current level of operating expenses, existing resources will not be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.

Current wording

We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced level, there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary. Based on our current level of operating expenses, existing resources will be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. In the future, we may seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.

Previous wording

We obtained financing for certain Director & Officer liability insurance policy premiums. For the year ended December 31, 2024, the agreement assigns AFCO Direct as 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.

Current wording

The Company entered into a premium financing agreement to fund certain Directors and Officers (“D&O”) liability insurance policy premiums. Under the terms of the agreement, the lender was granted a first‑priority lien and security interest in the financed insurance policies and all related amounts, including (a) returned or unearned premiums, (b) additional cash contributions or collateral amounts assessed by insurers and financed by the lender, (c) credits generated by the financed policies, (d) dividend payments, and (e) loss payments that reduce unearned premiums. In cases where premiums under any financed policy may become fully earned in the event of a loss, the lender was designated as a loss payee with respect to such policy.

Previous wording

Net cash used by operating activities increased by $9.2 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to an increase in our net loss adjusted for non-cash items of $4.5 million, compounded by an increase in cash used in operating activities related to change in our operating assets and liabilities of $4.6 million. Year-over-year changes in cash used for operating activities were primarily driven by working capital needs to support the advancement of our Phase 1 trial.

Current wording

Net cash used by operating activities increased by $10.5 million in the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to an increase in our non-cash items plus net income of $9.4 million, offset by an increase in cash used in operating activities related to change in our operating assets and liabilities of $1.4 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.

Previous wording

Net cash used by investing activities increased by $11.8 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increased purchases of short-term investments following the completion of the Company’s 2023 PIPE. Capital expenditures were minimal in 2024, as major asset purchases in prior years were primarily related to leasehold improvements at our Corporate Headquarters. 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.

Current wording

Net cash used by investing activities increased by $109.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to increased purchases of short-term investments. Capital expenditures were minimal in 2025. We anticipate an increase in capital asset purchases in the near term as we continue to invest in the development of our lead therapeutic candidate through Phase 2 clinical trials.

Previous wording

Net cash provided by (used in) financing activities decreased by $67.9 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to the absence of any material equity financing activities in 2024.

Current wording

Net cash provided by financing activities increased by $169.5 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily due to the Series B Offering.

Previous wording

Expenses incurred in connection with research and development activities are expensed as incurred. These include 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 behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.

Current wording

Costs incurred in connection with research and development activities are expensed as incurred. These include 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 behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.

Previous wording

We had contracts with multiple CROs 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 we are accounting for nonrefundable 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, we will adjust the accrual; such changes in estimate may result in a material change in our clinical study accrual, which could also materially affect reported results of operations.

Current wording

We have contracts with multiple CROs 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 we are accounting for nonrefundable 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, we will adjust the accrual; such changes in estimate may result in a material change in our clinical study accrual, which could also materially affect reported results of operations.

Previous wording

In determining the fair value of stock-based awards, we utilize 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, we estimate the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. No awards may have a term in excess of ten years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in the consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the vesting period.

Current wording

In determining the fair value of stock-based awards, we utilize 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, we estimate the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. No awards may have a term in excess of ten years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in the consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the requisite service period, which generally coincides with the vesting period.

Previous wording

We account for our Public Warrants, Private Placement Warrants, and Preferred Warrants as liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The initial fair value of the warrant liabilities was measured at fair value at the Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in our consolidated statements of operations.

Current wording

We account for our Public Warrants, Private Placement Warrants, and Tranche C Warrants as liabilities in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The initial fair value of the warrant liabilities was measured at fair value at the Business Combination Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in our consolidated statements of operations.

Previous wording

On the Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis. Specifically, we considered an MCS to derive the implied volatility in the publicly-listed price of the Public Warrants. We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants. We determined the fair value of the Public Warrants by reference to the quoted market price. See Note 12, Warrants, for the key inputs and further details for our warrants classified as liabilities.

Current wording

On the Business Combination Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis. Specifically, we considered an MCS to derive the implied volatility in the publicly-listed price of the Public Warrants. We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants. We determined the fair value of the Public Warrants by reference to the quoted market price. See Note 12, Warrants, for the key inputs and further details for our warrants classified as liabilities.

Previous wording

We determined the Ladenburg Warrants, PIPE Warrants, PIPE Placement Agent Warrants, and Preferred PIPE Placement Agent Warrants met all necessary criteria to be accounted for as equity in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. As such, they are presented within additional paid-in capital within our consolidated statements of changes in stockholders’ equity and consolidated balance sheets.

Current wording

We determined the Ladenburg Warrants, PIPE Warrants, PIPE Placement Agent Warrants, Preferred PIPE Placement Agent Warrants, and Preferred PIPE Series B Warrants (each as defined in Note 12, Warrants) met all necessary criteria to be accounted for as equity in accordance with ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. As such, they are presented within additional paid-in capital within our consolidated statements of changes in stockholders’ equity and consolidated balance sheets.