SABS 10-K & 10-Q changes, risk factors and insider trading
SAB Biotherapeutics, Inc. (also SABSW) · Nasdaq · Biological Products, (No Diagnostic Substances) · CIK 1833214 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “A prolonged U.S. federal government shutdown could materially and adversely affect our business, operations, and legal proceedings.”
New heading “Unfavorable global economic conditions and government regulations could adversely affect our business, financial condition or results of operations.”
New heading “Patent applications may be denied or issued patents covering our products and product candidates could be found invalid or unenforceable.”
New heading “We may be unable to protect the confidentiality of our trade secrets and know-how.”
New heading “We rely heavily on trade secrets and proprietary know-how to protect our technology, and if our employees, consultants, or collaborators disclose such information or if our Tc Bovine, HAC or proprietary cell linesare misappropriated, competitors could replicate our platform.”
New heading “The U.S. government may have march-in rights with respect to certain of our intellectual property, which could limit our ability to exclusively commercialize products developed with government funding.”
New heading “The regulatory pathway for approval of biosimilars or interchangeable biologics to our products is uncertain, which may create competitive risks.”
Removed heading “Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements.”
Removed heading “Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.”
Removed heading “Our ability to continue to operate as a going concern depends on our ability to obtain adequate financing in the future.”
Removed heading “If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud, we previously identified a material weakness in our internal control over financial reporting, which has been remediated during the year ended December 31, 2024. In the future, we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in our financial statements or cause us to fail to meet our period reporting obligations, and adversely affect the trading price of our common stock.”
Removed heading “Risks Related to Capital Markets”
Largest changes
“Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. Factors such as geopolitical events (including the ongoing wars in Iran, Ukraine and Israel and the risk of increased tensions between China and Taiwan), inflationary pressures, public health crises, and U.S. election cycles, and changes in government administration and policies have caused extreme volatility and disruptions in the capital and credit markets in recent years. …”see in full comparison
“On October 1, 2025, the federal government of the United States began a shutdown at 12:01 a.m. EDT as a result of congressional failure to pass appropriations legislation for the 2026 fiscal year, which began that day, and lasted for 43 days. Subsequent partial federal government shutdowns occurred in January and February of 2026. A continued and prolonged shutdown could materially and adversely affect our business, operations, financial condition, and legal matters. …”see in full comparison
“Our ability to continue as a going concern is dependent, among other things, on our ability to raise additional capital resources. We plan to seek additional funding through a combination of equity or debt financings, or other third-party financing, 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. …”see in full comparison
“If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud, we previously identified a material weakness in our internal control over financial reporting, which has been remediated during the year ended December 31, 2024. …”see in full comparison
“Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements.”see in full comparison
“Our ability to continue to operate as a going concern depends on our ability to obtain adequate financing in the future.”see in full comparison
Full comparison: every changed paragraph (86)
Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements.
Even if we obtain regulatory approval for aour product candidates, our products will remain subject to regulatory scrutiny.
A prolonged U.S. federal government shutdown could materially and adversely affect our business, operations, and legal proceedings.
Unfavorable global economic conditions and government regulations could adversely affect our business, financial condition or results of operations.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Patent applications may be denied or issued patents covering our products and product candidates could be found invalid or unenforceable.
We may be unable to protect the confidentiality of our trade secrets and know-how.
We rely heavily on trade secrets and proprietary know-how to protect our technology, and if our employees, consultants, or collaborators disclose such information or if our Tc Bovine, HAC or proprietary cell lines are misappropriated, competitors could replicate our platform.
The U.S. government may have march-in rights with respect to certain of our intellectual property, which could limit our ability to exclusively commercialize products developed with government funding.
The regulatory pathway for approval of biosimilars or interchangeable biologics to our products is uncertain, which may create competitive risks If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception. We realized net losses in the fiscal year ended December 31, 2024 and 2023, we expect to continue to incur net losses for the foreseeable future, and we may never achieve or maintain profitability in the future.
Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements.
The report of our independent registered public accounting firm on our financial statements as of and for the years ended December 31, 2024 and 2023 includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern. Going forward, we may seek additional funding through a combination of equity or debt financings, or other third-party financing, collaborative or other funding arrangements.
In the future, reports from our independent registered public accounting firm may also contain statements expressing substantial doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, if at all.
We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. The clinicalClinical development of our initial and potential additional product candidates is susceptible to the risk of failure inherent at any stage of development,stage, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, theefficacy, occurrence of unacceptable adverse events that are severe or medically or commercially unacceptable,events, failure to comply with protocols or applicable regulatory requirementsrequirements, andor determination by the FDA or any comparable foreign regulatory authorityregulators that a product candidate may not continue development or is not approvable. It is possible that even if any of our product candidates have a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials. Conversely, as a result of the same factors, our clinicalClinical trials may indicate an apparent positive effect of such product candidate that is greater than the actual positive effect, if any. Similarly, in our clinical trials we may fail to detect toxicitybeneficial of,effects or intolerability caused by, such product candidate,toxicity, or mistakenlymay believeindicate effects that ourdiffer productfrom candidatesactual are toxic or not well tolerated when that is not in fact the case.results. Serious adverse events or other adverse events, as well as tolerability issues,issues could hinder or prevent market acceptance of the product candidate at issue.candidate.
The FDA and foreign regulatory authorities also have substantial discretion in the drug approval process. The number and types of preclinical studies and clinical trials that the FDA will require to establish substantial evidence of safety and effectivenessrequired for regulatory approval varies depending on the product candidate, the disease or condition that the product candidate is designed to address, and thetarget regulations applicable to any particular product candidate.disease. Approval policies, regulations, or the type and amount of clinical data necessary to gain approvalrequirements may change during the course of a product candidate’s clinical development and may vary among countries and regulatory authorities, and there may be varying interpretations of data obtained from preclinical studies or clinical trials, either of which may cause delays or limitations in the approval or the decision not to approve an application.authorities. Regulatory agencies can delay, limitlimit, or deny approval of a product candidate for many reasons, including:
This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, results of operations and prospects. The FDA or a comparable foreign regulatory authority may require more information, including additional preclinical or clinical data to support approval, which may delay or prevent approval and our commercialization plans, or which we may lead us to decide to abandon the development program.
In addition, the new 2025 U.S. presidential administration has implemented or threatened reductions in force and work stoppages across several U.S. federal agencies. Any such reductions or stoppages at the FDA or other federal agencies could delay the approval or review processes for any of our products and product candidates, which could negatively impact our business and results of operations. In addition, the new presidential administration may institute policies, communications or programs that could negatively impact the biotechnology industry, vaccine products and our ability to raise additional financing.
Even if we obtain regulatory approval for aour product candidates, our products will remain subject to regulatory scrutiny.
A prolonged U.S. federal government shutdown could materially and adversely affect our business, operations, and legal proceedings.
On October 1, 2025, the federal government of the United States began a shutdown at 12:01 a.m. EDT as a result of congressional failure to pass appropriations legislation for the 2026 fiscal year, which began that day, and lasted for 43 days. Subsequent partial federal government shutdowns occurred in January and February of 2026. A continued and prolonged shutdown could materially and adversely affect our business, operations, financial condition, and legal matters. A federal government shutdown may result in the furlough of federal employees, reduced availability of government services, and suspension or delay of activities by key agencies that regulate, fund, or interact with our business, including the SEC, the FDA, the HHS, and the U.S. Patent and Trademark Office. During such periods, review and approval of our filings, applications, and submissions could be delayed, and we may be unable to access or rely upon certain government data or systems. In addition, the Administrative Office of the U.S. Courts and federal judiciary operations rely on appropriated funds and fee-based reserves that may be exhausted in the event of an extended shutdown. If federal court funding lapses or is limited to “essential” functions only, civil litigation, bankruptcy proceedings, and regulatory enforcement actions involving us or our affiliates could be postponed or suspended. Any such delay could impede our ability to resolve disputes, enforce contractual rights, or obtain timely judicial relief, which may have a material adverse effect on our financial position or prospects. Such conditions could negatively impact our access to financing, timing of capital-raising transactions, and the liquidity or trading volume of our securities. Accordingly, the federal government shutdown, or uncertainty regarding the continuity of government operations could have a material adverse effect on our business, results of operations, and stock price.
Unfavorable global economic conditions and government regulations could adversely affect our business, financial condition or results of operations.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. Factors such as geopolitical events (including the ongoing wars in Iran, Ukraine and Israel and the risk of increased tensions between China and Taiwan), inflationary pressures, public health crises, and U.S. election cycles, and changes in government administration and policies have caused extreme volatility and disruptions in the capital and credit markets in recent years. Uncertainty or unfavorable global economic conditions could result in a variety of impacts to our business, including weakening demand for our products, and adversely impacting our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy has strained in the past and may in the future strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services. Further, the Trump administration has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business. For example, the Trump administration has imposed tariffs on certain foreign products, including from Canada, Mexico and China, that in the past have resulted in and may result in future retaliatory tariffs on U.S. goods and products. Additionally, on September 25, 2025, the current U.S. administration announced a 100% tariff on brand-name or patented drugs unless pharmaceutical companies expand their manufacturing operations in the U.S., and may impose more restrictions on goods. Although the pharmaceutical tariff is currently on hold, this could have a material adverse effect on our supply chain and business prospects as well as the larger biopharmaceutical industry. While certain tariffs have subsequently been suspended, modified or temporarily reduced, we cannot predict the results of the U.S. government’s trade negotiations or the outcome of ongoing legal challenges to specific tariff policies. We cannot predict whether these policies will continue, or if new policies will be enacted, or the impact, if any, that any policy changes could have on our business. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the economic climate and financial market conditions could adversely affect our business.
There is also uncertainty surrounding potential changes to the healthcare regulatory environment in the United States, and it is not possible to predict how these changes may be implemented, and the ultimate effects of such changes on our business. In addition, the U.S. federal government and other governments may reduce funding for health care or other programs or make changes that adversely affect the number of persons eligible for certain programs, the services provided to enrollees in such programs and premiums we can charge. The levels of U.S. federal government spending are difficult to predict and are subject to significant risk. Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally. For example, on January 20, 2025, President Trump established by executive order the U.S. DOGE Service Temporary Organization ("DOGE") to reform federal government processes and reduce expenditures, and on February 5, 2025, the Centers for Medicare & Medicaid Services, or CMS, announced that it is collaborating with DOGE to determine where there may be opportunities for more effective and efficient use of resources. Further, there are reports that the administration is exploring and implementing policies which may put limits on, or freeze, credit card spending by government employees on behalf of government agencies. Additionally, the Trump administration took several Executive Actions, including the issuance of a number of Executive Orders, that imposed significant burdens on, or otherwise materially delayed, the FDA’s ability to engage in routine oversight activities, such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications. It is difficult to predict whether additional orders will be implemented, or how these orders will be rescinded and replaced under the current or future administrations.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also slow the time necessary for new biologics or modifications to approved biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Since that time, there have been several threatened “shutdowns” of the U.S. federal government, including as recently as March 2025. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
We do not have the ability to conduct all aspects of our preclinical studies or future clinical trials ourselves. As a result, we are, and expect to remain, dependent on third parties to perform some of our research and preclinical studies and any future clinical trials of our product candidates, including but not limited to governmental agencies and university laboratories, contract manufacturers, contract research organizations (CROs), distribution and supply (logistics) services organizations, contract testing organizations (CTOs), consultants or consultant organization with specialized knowledge based expertise. The timing of the initiation and completion of our current and planned preclinical studies and clinical trials will therefore be partially controlled by such third parties and may result in delays to our development programs. Specifically, we expect CROs, clinical investigators, and consultants to play a significant role in the conduct of future clinical trials and the subsequent collection and analysis of data. However, we will not be able to control all aspects of their activities. Nevertheless, as the sponsor of the INADs, INDs and clinical protocols governing our future clinical trials, we will be responsible for ensuring that each of our trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on the CROs, CTOs, and other third parties does not relieve us of our regulatory responsibilities. We, our CROs, CTOs, and clinical sites will be required to comply with GLP requirements for preclinical studies, as well as GCP requirements for clinical trials involving human subjects, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area, and comparable foreign regulatory authorities, for all of our current product candidates and any future product candidates in clinical development. Regulatory authorities enforce these GLP and GCP requirements through periodic inspections of trial sponsors, testing laboratories, clinical trial investigators, and clinical trial sites. If we or any of our CROs, CTOs, or clinical trial sites fail to adhere to our clinical trial protocols or to comply with applicable GLP or GCP requirements, as applicable, the data generated in our future preclinical studies or clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical studies or clinical trials before accepting for review or approving our marketing applications. In addition, our clinical trials must be conducted with product candidates produced under GMP regulations. Our failure to comply with these regulations may require us to stop and/or repeat clinical trials, which would delay the marketing approval process.
Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial results or data. The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of our product candidates.
There is no guarantee that any such CROs, CTOs, clinical trial investigators or other third parties on which we plan to rely will devote adequate time and resources to our development activities or perform as contractually required. Further, the performance of our third parties on which we rely may be interrupted by future pandemics similar to the COVID-19 pandemic, including due to travel or quarantine policies, heightened exposure of CRO staff who are healthcare providers to such pandemics or prioritization of resources toward the pandemic (similar public health emergencies that may arise in the future). If any of these third parties fails to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, otherwise performs in a substandard manner, or terminates its engagement with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated. If any of our future clinical trial sites terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trials unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.
We do not have the ability to conduct all aspects of our preclinical studies or clinical trials ourselves. We depend on third parties, including contract research organizations (CROs), contract testing organizations (CTOs), contract manufacturers, and clinical investigators to perform research, preclinical studies, and clinical trials. The timing of our development programs will therefore be partially controlled by such third parties and may result in delays. As the sponsor of the INADs, INDs, and clinical protocols governing our trials, we remain responsible for ensuring compliance with applicable protocols and regulatory standards. We and our third-party contractors must comply with Good Laboratory Practice (GLP) requirements for preclinical studies and Good Clinical Practice (GCP) requirements for clinical trials, which are enforced by the FDA and comparable foreign regulatory authorities through periodic inspections. If we or our contractors fail to comply with these requirements, the data generated may be deemed unreliable, and regulators may require us to repeat studies or trials, which would delay the approval process.
Principal investigators for our clinical trials may serve as scientific advisors or consultants and receive compensation for such services. The FDA or comparable foreign regulatory authorities may conclude that such financial relationships create conflicts of interest that affect interpretation of trial data. This could result in regulators questioning data integrity, leading to delays or rejection of our marketing applications.
There is no guarantee that CROs, CTOs, clinical investigators, or other third parties will devote adequate time and resources to our development activities or perform as contractually required. Third-party performance may also be interrupted by public health emergencies. If any third party fails to meet deadlines, adhere to protocols, or meet regulatory requirements, our development timelines may be extended or suspended. If clinical trial sites terminate, we may lose follow-up information on enrolled subjects unless we can transfer them to another qualified site.
We may encounter difficulties in scaling up our manufacturing processes, which may result in unanticipated technical challenges and require additional regulatory inspections or authorizations. Scaling difficulties could include problems with raw material suppliers, production yields, quality control, personnel shortages, capacity constraints, regulatory compliance, and production costs. Manufacturing costs could be greater than expected and materially affect the commercial viability of our product candidates. Failure to scale production to commercial quantities could jeopardize successful commercialization of any approved products.
There can be no assurance that we will not encounter difficulties in scaling up our manufacturing processes. Significant scale-up of manufacturing may result in unanticipated technical challenges and may require additional inspections, permits, or other authorizations by the FDA, the USDA, or corresponding state agencies. We may encounter difficulties in scaling up production, including problems involving raw material suppliers, production yields, technical difficulties, scaled-up product characteristics, quality control and assurance, shortage of qualified personnel, capacity constraints, compliance with FDA and foreign regulations, environmental compliance, production costs and development of advanced manufacturing techniques and process controls. The actual cost to manufacture and process our product candidates could also be greater than we expect and could materially and adversely affect the commercial viability of any product candidates that we develop. Any of these difficulties, if they occur and are not resolved to the satisfaction of the FDA or other regulatory agency, could lead to significant delays and possibly the termination of the future development or commercial program for such product candidate. These risks become more acute as we scale-up for commercial quantities, where a reliable source of product becomes critical to commercial success. The commercial viability of any of our product candidates, if approved, will depend on our ability to produce our product candidates at a large scale. Failure to achieve this level of supply could jeopardize the successful commercialization of our therapeutic product candidates, should any be approved for marketing.
The manufacture of polyclonal antibodies from transgenic animals is complex and requires significant expertise, including the development of advanced manufacturing techniques and process controls.expertise. Manufacturers of polyclonal antibody products often encounter difficulties in production, particularly in scaling out up andup, validating initial productionproduction, and ensuring the absence of contamination. These problems include difficulties with production costs and yields, quality control, including stability of the product candidate, quality assurance testing, operator error, shortagespersonnel of qualified personnel, shortages ofand raw materials,material as well as compliance with strictly enforced federal, stateshortages, and foreignregulatory regulations.compliance. Furthermore, ifIf contaminants are discovered in our animal production facility, it may need to be closed for an extended period of time to investigate and remedy the contamination.period. We cannot ensure provide assurance that any stability or other manufacturing issues relating to the manufacture of our product candidates will not occur in the future.
There is a risk that of we may experience manufacturing issues associated with the differences in donor starting materials, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment, vendor or operator error, and variability in product characteristics. Even minor deviations from our normal manufacturing processes could result in reduced production yields, lot failures, product defects, product delays, product recalls, product liability claims and other supply disruptions. Further, as product candidates advance through preclinical to later-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered in an effort to optimize processes and results. We may not achieve our intended objectives and any of these changes could cause our product candidates to perform differently than we expect, potentially affecting the results of future clinical trials.
Our product candidates are based on materials produced by genetically engineered bovines. As of MarchFebruary 17,18, 2025,2026, we maintain a herd of approximately 157153 genetically engineered production animals at a single location in South Dakota and a larger herd of recipient animals at other locations. Our ability to produce product candidates is dependent on the continued health and productivity of these animals. The supply of our product candidates can be adversely impacted by outbreaks of livestock diseases, which can have a significant adverse impact on our financial condition. Our animals produced by the recipient herd do not typically become productive until 18 months from the start of gestation. If all or a material number of the productive herd were to become diseased, injured or die as a result of bacterial, fungal or viral infections, such as foot and mouth disease, or natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations.
See Item 1C. “Cybersecurity”, of this Annual Report on Annual Report for more information.
Tariffs could adversely affect our business and financial results.
We purchase components of our product candidates, including consumable supplies and raw materials, from U.S. domestic sources, as well as various global sources including but not limited to those located in China and the European Union. . The U.S. government has made and continues to make significant additional changes in U.S. trade policy and may continue to take future actions that could negatively impact U.S. trade. For example, the United States has announced tariffs on many goods imported from specified nations. In addition, there are currently discussions concerning potential increased tariffs for pharmaceutical and medical device products, which may impact our supply chain and create uncertainty in the broader pharmaceutical industry. While certain tariffs have been suspended, modified or temporarily reduced, we cannot predict the results of the U.S. government’s trade negotiations or the outcome of ongoing legal challenges to specific tariff policies. Changes in U.S. trade policy, including recently announced tariffs, related to countries where we or our suppliers operate could result in increased costs for raw materials, components, or finished goods for us, or challenges for our third-party contract manufacturers, distributors and suppliers to continue to meet demands for our products at current prices. These cost increases may reduce our margins, require us to raise prices, or make our products less competitive in the marketplace.
Additionally, retaliatory tariffs imposed by other countries on U.S. exports could adversely impact demand for our products in international markets or increase the costs of conducting business. If we are unable to mitigate these risks through supply chain adjustments, pricing strategies, or other measures, our financial performance and growth prospects could be negatively affected.
We purchase components of our product candidates, including consumable supplies and raw materials, from U.S. domestic sources, as well as various global sources including but not limited to those located in China and the European Union. The current U.S. presidential administration has proposed the implementation of a number of tariffs, including tariffs on products and materials from these jurisdictions, which could increase our production costs. If tariffs make purchases of materials from certain jurisdictions untenable, we may also need to obtain materials from other sources, when possible, which could also increase our costs and delay our planned clinical trials and manufacture of our products and product candidates. Any of these factors may adversely affect our financial condition or results of operations.
Our ability to continue to operate as a going concern depends on our ability to obtain adequate financing in the future.
Our ability to continue as a going concern is dependent, among other things, on our ability to raise additional capital resources. We plan to seek additional funding through a combination of equity or debt financings, or other third-party financing, 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.
Management believes there is substantial doubt about our ability to continue as a going concern for the one-year period following the date that the consolidated financial statements for December 31, 2024 were issued. The consolidated financial statements for December 31, 2024 have been prepared on the basis that the Company will continue as a going concern, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability for the Company to continue as a going concern.
Our success in large part depends on our ability to maintain the proprietary nature of our technology and other trade secrets. To do so, we must prosecute and maintain existing patents, obtain new patentspatents, protect trade secrets and pursue trade secret and other intellectual property protection. We also must operate without infringing the proprietary rights of third-parties or allowing third-parties to infringe our rights. Patent issues relating to pharmaceuticals and biologics involve complex legal, scientific and factual questions. To date, no consistent policy has emerged regarding the breadth of biotechnology patent claims that are granted by the U.S.US Patent and Trademark Office (“USPTO”)PTO or enforced by the federal courts. Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage. We also cannot be sure that we will develop additional proprietary products that are patentable. Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us.
While we rely on a combination of patents, trademarks and trade secret protection, as well as other contractual agreements to protect the intellectual property related to product candidates and proprietary technologies, our strategy and future prospects are based, in particular, on our patent portfolio and regulatory exclusivity. The uncertainties with respect to the legal system in the US, Europe and other countries, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations with little advance notice, or policies and practices that weaken the intellectual property framework (such as laws or regulations that promote or provide broad discretion to issue a compulsory license) could adversely affect us and limit the legal protections available to us. We will best be able to protect our technologies, and product candidates and their uses from unauthorized use by third parties to the extent that valid and enforceable patents, effectively protected trade secrets, or other regulatory exclusivities, cover them. However, the process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
The patent position and other intellectual property rights of biopharmaceutical companies involve complex legal, administrative and factual questions, and the issuance, scope, validity and enforceability of patents cannot be predicted with certainty. Also, intellectual property rights have limitations and do not necessarily address all potential threats to our competitive advantage. Our ability to obtain patent protection for our technologies and product candidates is uncertain, and the degree of future protection afforded by such intellectual property rights is uncertain due to a number of factors, including, but not limited to:
we may not have been the first to make or file patent applications for the inventions covered by pending patent applications or issued patents;
others may independently develop identical, similar or alternative technologies, products or compositions and uses thereof;
any or all of our pending, or any future patent applications may not result in issued patents;
any patents issued to us may not provide a basis for commercially viable products, or may not provide any competitive advantages in countries of significant business opportunity;
third parties may initiate interference, re-examination, post-grant review, inter partes review, or derivation actions in the US Patent and Trademark Office (“USPTO”), or oppositions in the European Patent Office (“EPO”), or observations or protests, or any similar actions in other patent administrative or court proceedings worldwide that challenge the validity, enforceability or scope of such patents, which may result in our patent claims being narrowed or invalidated which could limit our ability to prevent competitors from developing and marketing similar products;
our technologies, compositions and methods may not be patentable;
others may design around our patent claims to produce competitive products or uses which fall outside of the scope of our patents;
third parties may have blocking patents that could prevent us from marketing our products or practicing our own patented technology;
patent terms may be inadequate to protect our competitive position on our technologies, and product candidates for an adequate amount of time;
the Supreme Court of the US, other US federal courts, Congress, the USPTO or similar foreign authorities may change the standards of patentability and any such changes could narrow or invalidate, or change the scope of, or change the patent lifetime of, our patents; and the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent. While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
We have extensive experience collaborating with multiple parties in Government and industry, and hashave agreements and collaborations that allow potential claims and actual rights, such as shared publication rights, shared inventions, access to assets, potential claims of co-inventorship, limited rights to data, general purpose rights to data, and other claims that may affect our business operations, intellectual property portfolio, interruption of operating assets or our ability to protect our own rights. There can be no assurance that our competitors, suppliers, service providers, collaborators or other parties will not succeed in asserting rights that are or become contrary to our interests.
Management's Discussion & Analysis (MD&A)
New heading “SAB-142: Our Lead Product Candidate”
New heading “Other Immunology Indications”
New heading “Private Placement Offerings of Equity Securities”
New heading “Shelf Registration Statement”
Removed heading “Recent Developments”
Removed heading “Corporate Strategy”
Removed heading “Key Factors Affecting Our Results of Operations and Future Performance”
Removed heading “8% Unsecured Convertible Note”
Largest changes
“The total premiums, taxes, and fees financed under the current insurance financing agreement are approximately $516 thousand, for AFCO Direct with an annual interest rate of 7.37%. In consideration of the premium payment by the AFCO Direct to the insurance companies or the Agent or Broker (as defined in the agreement with the lender), we unconditionally promise to pay the lender the amount financed plus interest and other charges permitted under the agreement. …”see in full comparison
“Key Factors Affecting Our Results of Operations and Future Performance”see in full comparison
We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reducedsee in full comparisonlevellevel, 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 willnotbe sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance.TheseInconditionstheraisefuture,substantialwedoubt about our ability to continue as a going concern. We intend tomay 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.
Full comparison: every changed paragraph (65)
We are a clinical-stage biopharmaceutical company focused on thedeveloping developmentmulti-specific, ofhigh-potency, human polyclonalimmunoglobulin immunotherapeuticG antibodies, or hIgG,(hIgG) to addresstreat immunologyand 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. OurThe internallyCompany’s discoveredlead antibodiescandidate, areSAB-142, bothtargets target-specificautoimmune T1D with a disease-modifying therapeutic approach that aims to change the T1D treatment paradigm by delaying onset and polyclonal,potentially meaningpreventing theydisease are comprisedprogression of multipleStage hIgG3 andT1D can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.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.
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 TcTc-Bovine™, Bovine, whichto 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 pathwaypathway, 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 vivo and in vitro pre-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.
Recent Developments
On January 28, 2025 we announced positive topline phase 1 clinical results with the Company’s potentially disease-modifying T1D therapy SAB-142. Based on the data, we plan to advance SAB-142 into a Phase 2b trial in 2025 to evaluate the therapeutic candidate in adult and pediatric patients with new-onset T1D.
The SAB-142 Phase 1 trial was designed as a randomized, double-blind, placebo-controlled, single-ascending dose, adaptive design clinical study among healthy volunteers and one cohort of participants with T1D. The objectives include establishing the safety, tolerability, pharmacokinetic, immunogenicity and pharmacodynamic profile for SAB-142. SAB-142 demonstrated a favorable safety profile with no reported serum sickness or anti-drug antibodies (ADA) across Phase 1 doses (0.03mg/kg to 2.5mg/kg), supporting chronic ambulatory dosing, while exhibiting sustained immunomodulation and a multi-target mechanism of action analogous to rabbit ATG, with correlations to C-peptide preservation.
Corporate Strategy
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 with significant unmet medical needs, including immune and autoimmune disorders including T1D. Our business strategy is focused on SAB-142 as a first-in-class, human, multi-target antibody treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D.
Our proprietary platform, represents the first technology of its kind to produce large-scale human high-titer and high-avidity antibodies across multiple modalities.
Leveraging our proprietary production system will help us advance a robust pipeline of differentiated hIgG-based therapies for the treatment of immune system disorders and infectious diseases. Our hIgG have been safely demonstrated up through Phase 3 clinical trials with a patient safety database that includes over 700 patients who were safely administered our hIgG therapeutics.
We have a demonstrated regulatory pathway through each of the FDA, CBER, MHRA, and TGA. These organizations understand our science and are familiar with the multivalent and multitarget properties of our single vial drug products. This further streamlines our ability to develop new and novel drug products rapidly and efficiently where single target mAbs cannot replicate or duplicate our drug product attributes.
Key Factors Affecting Our Results of Operations and Future Performance
We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business. These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A of this Annual Report.
Our revenue has historically been generated through grants from government and other (non-government) organizations. We currently have no commercially-approved products.
Grant revenue is recognized for the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grants are met. We concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit Entities, and that the grants are not within the scope of ASC 606, Revenue from Contracts with Customers, as the organizations providing the grants do not meet the definition of a customer. Expenses for grants are tracked by using a project code specific to the grant, and the employees also track hours worked by using the project code.
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.
Total revenue recognized from government grants was approximately $1.3 million and $2.2 million for the years ended December 31, 2024 and 2023, respectively.
We had two grants from The National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”). The first grant, directly from NIH-NIAID, totaled approximately $1.5 million, and the second grant through Geneva Foundation, totaling approximately $2.7 million. Both of these grants were completed as of June 30, 2023. No grant income was recognized for these grants for the year ended December 31, 2024 and for the year ended December 31, 2023, we recognized approximately $0.4 million in total grant income, $0.2 million from each grant, respectively. The Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) Rapid Response Contract (the “JPEO Rapid Response Contract”), initially awarded for up to $25 million and later expanded to $203.6 million, was terminated in 2022 (the “JPEO Rapid Response Contract Termination”). A final settlement was reached with the US Department of Defense (the “DoD”) in January 2023. Approximately $1.3 million and $1.8 million in deferred grant income was recognized for the JPEO Rapid Response Contract for the years ended December 31, 2024 and December 31, 2023, respectively.
See Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements for further information about our established revenue recognition process and Note 4, Revenue, to our consolidated financial statements for further information about revenue recognized from government grants for the years ended December 31, 2024 and 2023.
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. ForPursuant to an agreement between the yearsCompany endedand 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 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.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 & animal care),benefits, laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expenses.expense.
Revenue decreased by $0.9$1.3 million, or 40.9%,100.0%, in 2024,2025, primarily due to the JPEO Rapid Response Contract Termination. There was no revenue recognized for the year ended December 31, 2025. Included in revenuesrevenue for the year ended December 31, 2024, are amounts for billable costs related to closeout activities and charges of $1.3 million for supplies, as compared to $0.1 million for labor, $0.8 million for supplies, and $1.4 milliondue for outside research manufacturing services for thelaboratory yearsupply ended December 31, 2023. We expect to recognize no further revenue on the JPEO Rapid Response Contract Termination and do not anticipate pursuing additional funded research opportunities outside of our primary focus area in T1D.disposal.
Research and development expenses increased by $13.7$4.1 million, or 83.2%,13.6%, for the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024, 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$4.8 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%),47.8%; clinical trial costs (year-over-year increase of $3.4$6.0 million, 415.0%143.5%; animal care (year-over-year increase of $0.1 million, 28.6%),; offset by contracta manufacturingdecrease 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 $0.4$1.6 million, 100.0%) and animal care (year-over-year decrease of $0.4 million, 43.2%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 expenses decreasedincreased by $9.8$0.6 million, or 41.3%,4.4%, for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year decreaseincrease of $1.5$1.1 million, 25.3%26.2%); non-capitalizedproject financing costsconsulting (year-over-year decreaseincrease of $7.5$0.2 million, 100.0%23.4%); offset by a decrease in salaries and benefits (year-over-year decrease of $0.2$0.6 million, 2.6%6.7%); insurance costs (year-over-year decrease of $0.5$0.1 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%8.4%).
While administrative support and non-capitalized financing costs declined substantially in the year ended December 31, 2024, we anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.
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%).
Total non-operating income increased by $12.2 million, or (278.61)% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. This increase was primarily driven by changes in the fair value of the warrant liabilities (year-over-year increase of $10.2 million, 211.6%); a $1.6 million increase in the Australian research and development tax credit; and a $0.4 million increase in income from non-interest-bearing short-term investments, primarily consisting of dividend income and realized gains and losses.
Interest income increased by $701$0.1 thousand,million, or 119.84%11.36% for the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.
We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced levellevel, 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. TheseIn conditionsthe raisefuture, substantialwe doubt about our ability to continue as a going concern. We intend tomay 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.
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.
8% Unsecured Convertible Note
Pursuant to the fourth amendment to our lease with Sanford Health, we agreed to a period of abated rent (the “Abated Rent”) from October 1, 2022 to September 30, 2023. In exchange for the Abated Rent, effective as of October 1, 2022, we issued to Sanford Health an 8% unsecured, convertible promissory note (the “8% Unsecured Convertible Note”).
Pursuant to the 8% Unsecured Convertible Note, we shall pay the sum of approximately $542 thousand (the “Principal”) plus accrued and unpaid interest thereon on September 30, 2024 (the “Maturity Date”). Simple interest shall accrue on the outstanding Principal from and after the date of the 8% Unsecured Convertible Note and shall be payable on the Maturity Date.
We repaid the Principal of $542 thousand and total accrued interest of $87 thousand during the year ended December 31, 2024.
WeThe obtainedCompany entered into a premium financing foragreement to fund certain DirectorDirectors and Officers (“D& OfficerO”) liability insurance policy premiums. ForUnder the yearterms ended December 31, 2024,of the agreement assigns AFCO Direct asagreement, the lender was granted a first ‑priority lien on and security interest in the financed insurance policies and anyall additionalrelated premium required in the financed policiesamounts, 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 policiesinsurers and financed by Lender,the lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments whichthat reduce unearned premiums. IfIn cases where premiums under any circumstancesfinanced existpolicy in which premiums related to any Financed Policy couldmay become fully earned in the event of a loss, Lenderthe shalllender bewas nameddesignated as a loss-payeeloss 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.
For the year ended December 31, 2023, we entered into a similar agreement with First Insurance Funding. This agreement also assigned First Insurance Funding a first priority lien on the security interest in the financed policies and associated rights.
The total premiums, taxes, and fees financed under the current insurance financing agreement are approximately $516 thousand, for AFCO Direct with an annual interest rate of 7.37%. In consideration of the premium payment by the AFCO Direct to the insurance companies or the Agent or Broker (as defined in the agreement with the lender), we unconditionally promise to pay the lender the amount financed plus interest and other charges permitted under the agreement. At December 31, 2024, and 2023, we recognized approximately $276 thousand and $509 thousand, respectively, as an insurance financing note payable in our consolidated balance sheets. We incurred $17 thousand and $22 thousand of interest expense related to the insurance financing note for the years ended December 31, 2024, and 2023, respectively. Our current insurance financing agreement is being repaid through installment payments, with the final payment scheduled for September 22, 2025.
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.
Net cash used by operating activities increased by $9.2$10.5 million in the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024, primarily due to an increase in our net loss adjusted for non-cash items plus net income of $4.5$9.4 million, compoundedoffset by an increase in cash used in operating activities related to change in our operating assets and liabilities of $4.6$1.4 million. Year-over-year changes in cash used forby operating activities wereis primarily drivenexplained by shifts in the working capital needsbalances as we continue to supportinvest in the advancementdevelopment of our Phaselead 1product trial.candidate, SAB-142.
Net cash used by investing activities increased by $11.8$109.7 million for the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024, primarily due to increased purchases of short-term investments following the completion of the Company’s 2023 PIPE.investments. Capital expenditures were minimal in 2024, as major asset purchases in prior years were primarily related to leasehold improvements at our Corporate Headquarters.2025. We do not anticipate a significantan increase in capital asset purchases in the near term,term as ourwe investmentcontinue focusto remainsinvest onin advancingthe development of our lead therapeutic candidate through Phase 2 clinical trials.
Net cash provided by (used in) financing activities decreasedincreased by $67.9$169.5 million for the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024, primarily due to the absenceSeries ofB any material equity financing activities in 2024.Offering.
Income Taxes
We had $59.9 million of federal net operating loss carryforwards as of December 31, 2024. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
These carryforwards may generally be utilized in any future period but may be subject to limitations based upon changes in the ownership of our shares in a prior or future period. We have not quantified the amount of such limitations, if any.
ExpensesCosts 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.
What changed in the latest 10-Q
Risk Factors
Our business is subject to various risks, including those described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 9, 2026, which we strongly encourage you to review (the “2025 Annual Report”). There have been no material changes from the risk factors described in our 2025 Annual Report.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Key Developments”
New heading “Changes in Fair Value of Warrant Liabilities”
New heading “Research and Development Expenses”
New heading “General and Administrative”
New heading “Changes in Fair Value of Warrant Liabilities”
New heading “Interest Expense”
New heading “Interest Income”
Removed heading “Comparison of the three months ended March 31, 2026 and 2025”
Removed heading “Non-operating Income (Expense)”
Largest changes
Full comparison: every changed paragraph (62)
This Quarterly Report on Form 10-Q (this “Quarterly Report” or “Form 10-Q”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act of 1934, as amended (the "Exchange Act"), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. In addition, historic results, including butresults notfrom limitedpreclinical tostudies thoseand relatedclinical to IND enabling GLP safety/toxicologytrials of SAB-142; and Phaseother 1product & Phase 2a results of SAB-176candidates; do not guarantee that future research or trials will suggest the same conclusions, nor that historic results referred to herein will be interpreted in the same manner due to future preclinical and clinical trial results or otherwise. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the sections entitled “Risk Factors” in this Quarterly Report, our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and other periodic reports filed with the Securities and Exchange Commission (the “SEC”) and available at https://www.sec.gov/. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as expressly required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.
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’sOur 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.
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 GoodGoods Administration (TGA) in Australia. The FDA regulates polyclonal hIgG and monoclonal antibodies (mAbs) differently, as mAbs are regulated through the Center for Drug Evaluation and Research (CDER) while polyclonal antibodies (pAbs) are regulated by the Center for Biologics Evaluation and Research (CBER). CBER has approved more than 30 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 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 with enrollment ongoing across multiple clinical trial sites in U.S., Australia, New Zealand, U.K. and European Union. Further,SAFEGUARD wePart A, a dose-ranging study in adult patients, completed enrollment in Q1 2026. SAFEGUARD Part B, a randomized double-blind, placebo-controlled, dose-ranging study, is actively enrolling. Upon Part A and B completion, all patients, including the placebo-control group, with residual beta cells at 12 months are planningeligible anfor additionalthe clinical12-month long-term efficacy and safety extension study of(Part SAB-142 in individuals with T1D beyond 100 days of diagnosis.C).
In March 2026, we announced additional Phase 1 data demonstrating early signals of C-peptide preservation in adult patients with established autoimmune T1D, consistent with SAB-142's anticipated mechanism of action. In April 2026, we presented additional clinical and mechanistic data from our Phase 1 clinical trial of SAB-142 in adult patients with established autoimmune T1D. The Phase 1 T1D cohort included six adult participants (n=6), with four receiving SAB-142 at 2.5 mg/kg (n=4) and two receiving placebo (n=2). Participants ranged in age from 19 to 40 years. All participants with established T1D (Stage 3 T1D diagnosis within 28-40 months at the time of randomization) had residual beta cell function (C-peptide >0.2 nmol/L) and at least one T1D autoantibody at baseline. Phase 1 exploratory efficacy endpoints were measured at the End of Study Day 120 post SAB-142 administration. One placebo participant (n=1) completed through Day 120 as the other placebo participant discontinued early due to personal reasons. The results for SAB-142 highlighted C-peptide preservation, correlated with evidence of T cell exhaustion. Of the four SAB-142-treated participants, three demonstrated a super responder profile with C-peptide levels at or above baseline at Day 120. SAB-142 treated participants showed improved glycemic control, with mean time in range increasing from 73% at baseline to 85% at Day 120, without an associated increase in exogenous insulin use.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. In April 2026, we received written correspondence from the FDA confirming that C-peptide area under the curve (AUC) may serve as a surrogate endpoint for accelerated approval.use.
Key Developments
In July 2026, Breakthrough T1D awarded a grant to support the investigator‑led Phase 3 clinical trial, called the PRISE‑hATG study, evaluating SAB‑142 in patients with Stage 3 T1D who are between 100 days and two years from diagnosis. We are co-funding the study. The PRISE-hATG study is a registrational clinical trial that could expand the potential future label of SAB-142 to patients with Stage 3 T1D with onset up to two years from diagnosis.
During Q2 2026, we 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.
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.
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 is acting as the CRO overseeing our Phase 2b efficacy and safety study for SAB-142. The study began enrolling patients in December 2025.
For the three months ended March 31, 2026 and 2025, 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 conductadvance discoveryour researchlead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to enhancesupport ourpotential platformcommercialization. andIn workaddition, on our indications. Wewe expect to hire additional employees andto continuefurther research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in the future and vary from period to period.
Research and development expenses by component for the three months ended March 31, 2026 and 2025:
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,IT, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, and 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 increase 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 potential commercialization, we may incur higher costs related to accounting,professional audit, legal, regulatory compliance,fees, 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.period.
Gain (loss) on change in fair value of warrant liabilities consists of the changes in the fair value of theour warrantPreferred liabilities.Tranche C Warrants, Business Combination Public Warrants and Private Placement Warrants.
Interest expense consists primarily of interest relatedexpense toassociated abatedwith rentfinance andlease insurance financing.arrangements.
The following tables set forth our results of operations for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):
Comparison of the three months ended March 31, 2026 and 2025
Research and Development Expenses
The following table represents our research and development expenses for the three months ended June 30, 2026 and 2025 (in thousands):
Research and development expenses increased by $9.2 million, or 131.1%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to increased clinical trial costs and related headcount to support the advancement of SAB-142 into our Registrational Phase 2b SAFEGUARD study.
Research and development expenses increased by $5.7 million, or 75.0%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The year-over-year change includes an increase in salaries and benefits (year-over-year increase of $3.7 million, 114.7%) and clinical trial costs (year-over-year increase of $1.3 million, 65.9%), outside lab services (year-over-year increase of $0.1 million, 20.3%), overhead and facility expense (year-over-year increase of $0.2 million, 17.5%), animal care (year-over-year increase of $0.3 million, 441.2%), and laboratory supplies (year-over-year increase of $0.2 million, 75.0%), offset by a decrease in project consulting (year-over-year decrease of $0.1 million, 47.0%). 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 expenses increased by $4.5 million or 163.4%, in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to increased headcount costs, including related stock based compensation.
Changes in Fair Value of Warrant Liabilities
Changes in fair value of warrant liabilities increased by $0.5 million, or 77.2% during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to the increase in fair value of our Preferred Tranche C Warrants.
General and administrative expenses increased by $3.5 million, or 111.9%, in the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to an increase in salaries and benefits (year-over-year increase of $2.8 million, 170.4%), project consulting (year-over-year increase of $0.2 million, 65.3%), and other immaterial administrative support fees relating to IT and human resources (year-over-year increase of $0.6 million, 53.7%), offset by a decrease in insurance costs (year-over-year decrease of $0.1 million, 10.3%). As our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.
Non-operating Income (Expense)
Total other non-operating income, not including interest income and interest expense, decreased by $5.4 million, or (97.41)%, in the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. This decrease was primarily driven by the change in fair value of warrant liabilities (year-over-year decrease of $5.5 million, (109.58)%). Total other income increased by $0.1 million, primarily driven by an increase in dividend income (year-over-year increase of $0.4 million, 361.0%), offset by a decrease in the Australian research and development tax credit (year-over-year decrease of $0.3 million, 76.4%).
Interest expense in the three months ended MarchJune 31,30, 2026 was consistent with interest expense in the three months ended MarchJune 31,30, 2025.
Interest income increased by $1.0$1.7 million,million or 1,575.57%,12,107.1% during the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, primarily due to interesthigher earnedaverage oninvestment ourbalances investmentsas ina debtresult securities,of the March 2026 Public Offering and higherthe interestJuly earning2025 cash,Purchase and cash equivalent balances.Agreement.
Other Income
Other income, increased by $0.1 million, or 18.6%, in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily driven by an increase in dividend and investment income due to higher average investment balances as a result of the March 2026 Public Offering and the July 2025 Purchase Agreement, partially offset by a decrease in the Australian research and development tax credit.
The following tables set forth our results of operations for the six months ended June 30, 2026 and 2025 (in thousands):
Research and Development Expenses
The following table represents our research and development expenses for the six months ended June 30, 2026 and 2025 (in thousands):
Research and development expenses increased by $14.9 million, or 101.8%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to increased clinical trial costs and related headcount to support the advancement of SAB-142 into our Registrational Phase 2b SAFEGUARD study.
General and Administrative
General and administrative expenses increased by $8.0 million, or 136.0%, in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to increased headcount costs, including related stock based compensation.
Changes in Fair Value of Warrant Liabilities
Changes in fair value of warrant liabilities increased by $6.0 million, or 136.1% during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to the increase in fair value of our Preferred Tranche C Warrants.
Interest Expense
Interest expense in the six months ended June 30, 2026 was consistent with interest expense in the six months ended June 30, 2025.
Interest Income
Interest income increased by $2.7 million, or 3,526.3%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to higher average investment balances as a result of the March 2026 Public Offering and the July 2025 Purchase Agreement.
Other Income
Other income increased by $0.1 million, or 16.0% in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily driven by an increase in dividend and investment income due to higher average investment balances as a result of the March 2026 Public Offering and the July 2025 Purchase Agreement, partially offset by a decrease in the Australian research and development tax credit.
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.
As of MarchJune 31,30, 2026, we had an accumulated deficit of $129.8$152.3 million. We anticipateexpect that we willto continue to generateincur operating losses for the foreseeable future, and expect the losses to increasefuture as we continuefund theproduct development of, or seeksdevelopment, regulatory approvalsapproval forefforts, productclinical candidates,trials, and begincommercial commercializationreadiness ofactivities, products. As a result,and we will require additional capital to fundsupport operations in order to supportour long-term plans.
In July 2025, we completed the Series B Offering, generating approximately $175.0 million in gross proceeds before fees and expenses through the sale of Series B Preferred Stock (convertible into common stock following stockholder approval) together with the Release Date Warrants and Enrollment Date Warrants.
In March 2026, we completed the March 2026 Public Offering, generating aggregate net proceeds of approximately $88.7 million after underwriting discounts, commissions, and offering expenses. The net proceeds are intended to fund the Phase 2b SAFEGUARD study of SAB-142 and for general corporate purposes.
On July 21, 2025, we entered into the July 2025 Purchase Agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in the Series B Offering, (i) 1,000,000 Series B Shares, convertible into 100,000,000 Series B Conversion Shares, (ii) the Release Date Warrants to purchase up to 500,000 the Release Date Warrant Shares, and (iii) the Enrollment Date Warrants to purchase up to 1,000,000 Enrollment Date Warrant Shares. We generated approximately $175 million in gross proceeds, before fees and expenses, from the Series B Offering. The Series B Preferred Stock is convertible into common stock, subject to stockholder approval.
On March 17, 2026, we entered into the March 2026 Public Offering with the underwriters, pursuant to which we agreed to issue and sell, in the March 2026 Public Offering, (i) 19,324,677 Firm Shares at a public offering price of $3.85 per share and (ii) Pre-Funded Warrants to purchase up to 2,753,246 shares of common stock at a public offering price of $3.8499 per Pre-Funded Warrant. We also granted the underwriters a 30-day option to purchase up to an additional 3,311,688 Optional Shares, which the underwriters partially exercised as of March 31, 2026 to purchase 2,000,000 Optional Shares. We generated aggregate net proceeds of approximately $86.4 million from the March 2026 Public Offering and an additional $7.2 million of net proceeds from the underwriters’ purchase of additional shares, after deducting underwriting discounts and commissions and offering expenses. The net proceeds are intended to fund the Phase 2b SAFEGUARD study of SAB-142 and for general corporate purposes.
The following table summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:
Net cash used in operating activities increased by $6.5$9.2 million in the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. This increase was primarily driven by a $3.3 millionan increase in net cash used before changes in operatingoperations, assetspartially andoffset liabilities, reflecting a higher net loss due to increased research and development expenses, with higherby non-cash adjustments, including stock-based compensation and changes in fair value of warrant liabilities. In addition, cash used in operating activities increased by $3.2 million due to changes in operating assets and liabilities. The year-over-year increase in cash used reflectswas working capital fluctuations as we continuedue to investour continued investment in the development of our lead product candidate, SAB-142.
Net cash used byin investing activities increased by $70.3$80.4 million in the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to increased purchases of short-term investmentsinvestments, partially offset by proceeds from sales and increase in capital expenditures. We anticipate to increase capital expenditures in the near term as we continue to invest in the developmentmaturities of our lead therapeutic candidate through Phase 2 clinical trials.investments.
Net cash provided by financing activities increased by $90.1$92.6 million in the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to the March 2026 Public Offering.Offering and exercise of warrants.
We have a clinical master services agreement with Fortrea for CRO services related to our Phase 2b study of SAB-142 and expect to make ongoing payments to Fortrea over the next 12 to 18 months in connection with these services.
In April 2026, we entered into a Master Manufacturing Services Agreement with Emergent for manufacturing services related to SAB-142, which includes a minimum aggregate spend of $36.0 million following FDA approval, over a five-year term. We expect to make substantial payments to Emergent over the next 24 to 36 months in connection with this agreement.
We terminated our office lease in Miami Beach, Florida and entered into a new lease for expanded space at the same location. The new lease commenced January 1, 2026 and has a five-year term. During the second quarter of 2026, we also reduced the leased space under our operating lease with Sanford Health; the terms of the original agreement remained unchanged, including the lease term ending December 31, 2029. Additionally, our office, laboratory, and warehouse space lease renewed in November 2023 has a three-year term expiring in November 2026, and we are evaluating our options with respect to renewal, extension, or relocation ahead of that expiration. As of June 30, 2026, our total operating and finance lease liabilities were approximately $1.9 million and $3.2 million, respectively. See Note 6, Leases, in our condensed consolidated financial statements for further details.
We enter into contracts in the normal course of business with third parties, including contract research organizations (“CRO”).
SABS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-17 | Kropotova Alexandra |
Shares withheld for tax | 473 | — | — |
| 2026-06-25 | Kropotova Alexandra |
Shares withheld for tax | 988 | — | — |
Well-known investors holding SABS (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 2,749,087 | $10.7M | 0.01% | Reduced 9% |
| Two Sigma Investments | 2026-06-30 | 214,632 | $837.1K | 0.0% | Added 18% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 62,797 | $244.9K | 0.0% | New position |