Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in "Risk Factors" included elsewhere in this Annual Report. As used in this report, unless the context suggests otherwise, "we," "us," our" or "the Company" refer to SAB Biotherapeutics, Inc. and its subsidiaries.

Company Overview

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.

Using advanced genetic engineering and antibody science, we 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. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without human plasma donors.

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.

Our proprietary platform holds the potential to generate additional novel therapeutic candidates to expand our pipeline, utilizing the human immune response to generate the optimal repertoire of hIgG for drug targets of interest. Our drug development production system is able to generate a diverse repertoire of specifically targeted, high-potency, hIgGs that can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders and address a wide range of serious unmet needs in human diseases.

SAB-142: Our Lead Product Candidate

Our wholly owned lead product candidate, SAB-142 is a potentially disease-modifying, redosable immunotherapy in clinical development for the treatment of autoimmune type 1 diabetes (T1D). SAB-142 is a multi-specific, fully human anti-thymocyte globulin (hATG) with a mechanism of action analogous to that of rabbit ATG (rATG). rATG has demonstrated in multiple clinical trials the ability to slow disease progression in patients with new- or recent-onset of Stage 3 T1D. SAB-142, like rATG, directly targets multiple immune cells involved in destroying pancreatic beta cells, including modulation of "bad acting" T-lymphocytes like cytotoxic T-cells. By stopping immune cells from attacking beta cells, this treatment has the potential to preserve insulin-producing beta cells. The mechanism of action of SAB-142 has been clinically validated in numerous clinical trials with a rabbit anti-thymocyte globulin (rATG). In addition, data from more than 800 human subjects have been treated with antibodies produced by our platform, including in the Phase 1 study of SAB-142, and we have seen no serum sickness rate and no incidence of neutralizing anti-drug antibodies (ADA). We expect this finding to continue through the clinical development of SAB-142.

There is an established regulatory path for T1D indications using the SAB-142 modality. Our regulatory pathway has also been established with the United States Food and Drug Administration (FDA), the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA), and the Therapeutic Good Administration (TGA) in Australia. The FDA regulates polyclonal hIgG and mAbs differently, as mAbs are regulated through the Center for Drug Evaluation and Research (CDER) while pAbs are regulated by CBER. CBER has approved over 36 immunoglobulin products from both human- and animal-derived plasma. Further, CBER is very familiar with our production platform and pAb products. We have navigated three SAB drug products through seven clinical trials with one product having advanced to Phase 3, building our safety database as well as positive efficacy data. As our lead program SAB-142 advances, we intend to expand our pipeline in complementary indications through strategic utilization of our platform.

We recently received an Investigational New Drug (IND) clearance from the FDA in May 2024 and announced positive topline data from our Phase 1 clinical trial of SAB-142 in January 2025, and December 2025. We initiated our pivotal Phase 2b clinical trial, called the SAFEGUARD study, in Q3 2025 and dosed the first patient in December 2025.

In May 2025, SAB confirmed its intent with the FDA to utilize the data from the SAFEGUARD study as supportive evidence for future regulatory approval.

Other Immunology Indications

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

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

Components of Results of Operations

Revenue

Government grants

There was no revenue recognized for the year ended December 31, 2025 and approximately $1.3 million recognized from government grants for the year ended December 31, 2024. We had various grants from the US Department of Defense that terminated in 2022. We satisfied all obligations under these arrangements as of December 31, 2024.

Operating Expenses

Research and development expenses

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

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

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.

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.

Research and development expenses by component for the years ended December 31, 2025 and 2024 were as follows:

General and administrative expenses

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

Nonoperating Income (Expense)

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

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

Other income (expense)

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

Interest income

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

Interest expense

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

Results of Operations

The following tables set forth our results of operations for the years ended December 31, 2025 and 2024:

Comparison of the Years Ended December 31, 2025 and 2024

Revenue

Revenue decreased by $1.3 million, or 100.0%, in 2025, primarily due to the JPEO Rapid Response Contract Termination. There was no revenue recognized for the year ended December 31, 2025. Included in revenue for the year ended December 31, 2024, are closeout activities and charges of $1.3 million due for outside services for laboratory supply disposal.

Research and development

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.

General and administrative

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%).

Non-operating (expense) income

The total non-operating income increased by $53.2 million, or 678.75% for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was primarily driven by the change in fair value of warrant liabilities of (year-over-year increase of $57.4 million, 1,065.35%). This amount includes a year-over-year decrease of $4.6 million in recurring change in fair value of warrant liabilities and gain of $62.0 million related to the change in fair value of warrant liabilities related to the Series B Offering. Included in total non-operating income are warrant issuance costs associated with the Series B Offering of $4.9 million. Other income increased by $0.7 million primarily related to an increase in dividend income of (year-over-year increase of $1.0 million, 204.5%), offset by a decrease in the Australian research and development tax credit (year-over-year decrease of $0.3 million, 13.0%).

Interest expense

Interest expense for the year ended December 31, 2025 remained consistent with interest expense for the year ended December 31, 2024, primarily due to the stability of our finance lease portfolio year-over-year.

Interest income

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.

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

Liquidity and Capital Resources

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.

We intend to continue to invest in our business and, as a result, may incur operating losses in future periods. We expect to continue to invest in research and development efforts towards expanding our capabilities and expertise along our platform and the primary pipeline development targets we are working on, as well as building our business development team and marketing our solutions to partners in support of the growth of the business.

We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin commercialization of our products. As a result, we will require additional capital to fund our operations in order to support our long-term plans.

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.

Sources of Liquidity

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

Private Placement Offerings of Equity Securities

During the year ended December 31, 2025, we completed an offering of 1,000,000 shares of newly-designated Series B preferred stock, par value $0.0001 per share, accompanied by 1,000,000 series B enrollment date warrants and 500,000 series B release date warrants. We received approximately $175 million of initial gross proceeds from the sale of these securities.

Notes payable

Insurance Financing

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.

For the year ended December 31, 2025, the Company did not utilize premium financing for its D&O liability insurance. Instead, the annual policy premium was paid in full at inception in December 2025. For the year ended December 31, 2024, the Company entered into a premium financing agreement for total premiums, taxes, and fees of approximately $516 thousand, bearing an annual interest rate of 7.37%. The financing was repaid through monthly installments, with the final payment due September 22, 2025. The Company incurred approximately $6 thousand and $17 thousand of interest expense related to this financing arrangement for the years ended December 31, 2025 and 2024, respectively.

During the year ended December 31, 2024, we also made payments on a prior insurance financing agreement, which had an original principal balance of $765 thousand with an annual interest rate of 7.96%. This prior agreement was fully repaid, with the final installment made on September 22, 2024.

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

Shelf Registration Statement

On December 29, 2025 we 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 us to offer and sell, from time to time, in one or more offerings, common stock, preferred stock, debt securities, warrants, rights or units up to an aggregate public offering price of $300 million. The Shelf Registration Statement is intended to preserve our flexibility to raise capital from time to time, if and when needed.

On December 29, 2025, the Company entered into a Sales Agreement (the "Agreement") with UBS Securities LLC, relating to shares of common stock. In accordance with the terms of the Agreement, the Company may offer and sell shares of our common stock having an aggregate offering price of up to $75 million from time to time through UBS Securities LLC, acting as the Company's sales agent. As of December 31, 2025, up to $75 million remains to be sold under the Agreement.

On January 26, 2024, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. providing for sales of up to $20 million of common stock; no shares were sold during the year ended December 31, 2025, and effective December 17, 2025, the Company terminated the agreement with no costs or payments associated.

Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024:

Operating Activities

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.

Investing Activities

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.

Financing Activities

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.

Contractual Obligations and Commitments

We enter into contracts in the normal course of business with third parties, including contract research organizations ("CRO"). These payments are not included in the table above, as the amount and timing of such payments are not known.

As of December 31, 2025, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies and Estimates

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

While our significant accounting policies are described in more detail in Note 2, Summary of Significant Accounting Policies,in our consolidated financial statements, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Research and development expenses

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.

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.

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. We recognize 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. We determine the fair value of common stock based on the closing market price at closing on the date of the grant.

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.

Warrants

Liability Classified Warrants

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.

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.

Our Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and our 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 13, Fair Value Measurements,for changes in fair value of the Private Placement Warrants.

Equity Classified Warrants

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.

Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.

The initial fair value of each Ladenburg Warrant, PIPE Warrant and PIPE Placement Agent Warrant issued was determined using the Black-Scholes option-pricing model. See Note 12, Warrantsfor further details on our warrants classified as equity.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3, New Accounting Standards, in our consolidated financial statements.

JOBS Act Accounting Election

The Jumpstart Our Business Startups ("JOBS") Act, enacted in April 2012, permits an "emerging growth company" such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have and intend to continue to take

advantage of all of the reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards, for an emerging growth company under Section 107 of the JOBS Act.

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

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

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

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.