SAB Biotherapeutics, Inc. Leases Disclosure

(7) Leases

The Company has an operating lease for lab space from Sanford Health, under a lease that started in June 2014 and initially ended in June 2019, at which time the lease was extended through August 2024. This lease was renewed in January 2025 for a five-year-term ending on December 31, 2029. This lease can be terminated with one-year advance written notice and does not include an option to extend beyond the life of the current term. The lease costs are approximately $50 thousand per month

through 2025, with an annual increase of 2% through 2029. The lease does not provide an implicit rate, and, therefore, the Company used an IBR of 9.90% as the discount rate when measuring the operating lease liability. The Company estimated the IBR based upon comparing interest rates available in the market for similar borrowings and the credit quality of the Company.

The Company entered into a lease for office, laboratory, and warehouse space in November 2020, as amended in July 2022, and renewed in November 2023. This renewed lease has a 3-year term, with options to extend for 3 additional periods of 3 years each. The options were not included in the right of use calculation as it was unclear as to whether or not the location will meet the Company’s requirements beyond the next three years. The lease costs are $31 thousand per month for the November 2023 lease renewal. The Company used an IBR of 8.14% as the discount rate when measuring the operating lease liability for the November 2023 lease renewal. The Company estimated the IBR based upon comparing interest rates available in the market for similar borrowings and the credit quality of the Company.

The Company entered into a lease for office space in April 2024. The Company leased 1,272 square feet, representing the Company’s principal executive offices, in Miami Beach, Florida. The initial term of the lease is 62 months. The lease costs are approximately $7 thousand per month through 2024, with annual increases of 4% through 2029. The Company used an IBR of 7.12%, as the discount rate when measuring the operating lease liability. In September 2025, the Company signed a new lease, expanding the lease space of 1,272 square feet to 3,099 square feet. The lease commenced in January 2026. The operating lease does not include an option to extend beyond the life of the current term. The Company estimated the IBR based upon comparing interest rates available in the market for similar borrowings and the credit quality of the Company.

The Company has the following finance leases:

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

The amortizable lives of the operating lease assets are limited by their expected lease terms. The amortizable lives of the finance lease assets are limited by their expected lives, as the Company intends to exercise the purchase options at the end of the leases. The following is the estimated useful lives of the finance lease assets:

Operating lease expense was approximately $1.1 million and $0.8 million, respectively, for the years ended December 31, 2025 and 2024. Operating lease costs were approximately $1.0 million and $0.1 million for research and development and general and administrative expenses, respectively, on the consolidated statement of operations for the year ended December 31, 2025. Operating lease costs were approximately $0.7 million and $0.1 million for research and development and general and administrative expenses, respectively, on the consolidated statement of operations for the year ended December 31, 2024.

Finance lease costs for the years ended December 31, 2025 and 2024 included approximately $0.1 million and $0.1 million respectively, in right-of-use asset amortization and approximately $0.3 million and $0.3 million, respectively, of interest expense. Finance lease costs are included within research and development expenses on the consolidated statements of operations.

Cash payments under operating and finance leases were approximately $1.0 million and $0.4 million, respectively, for the year ended December 31, 2025. Cash payments under operating and finance leases were approximately $0.8 million and $0.4 million, respectively, for the year ended December 31, 2024.

The Company incurred no short-term lease costs for the year ended December 31, 2025 and the variable lease cost was insignificant for the year ended December 31, 2025. Short-term lease costs were approximately $0.1 million and variable lease costs were approximately $0.1 million for the year ended December 31, 2024.