SAB Biotherapeutics, Inc. Stock Compensation Disclosure

(11) Stock-based Compensation

On August 5, 2014, the Company approved a stock option grant plan (the “2014 Equity Incentive Plan”) for employees, directors, and non-employee consultants, which provides for the issuance of options to purchase common stock. As of December 31, 2024, there were 728,650 shares of common stock reserved for issuance under the 2014 Equity Incentive Plan, with 426,790 shares of common stock available for grant and 301,860 shares of common stock underlying outstanding grants.

The Company adopted the 2021 Omnibus Equity Incentive Plan (the “2021 Equity Incentive Plan”, and collectively with the 2014 Equity Incentive Plan, the “Equity Compensation Plans”), which reserved 1,100,000 shares of common stock for issuance. At of the beginning of each calendar year, the shares reserved for future issuance shall increase by two percent (2%) of the total number of Shares of Common Stock issued and outstanding on a fully-diluted basis as of the end of the Company’s immediately preceding fiscal year (or such lesser number of shares, including no shares, determined by the Board in its sole discretion); provided, however, that the aggregate number of additional Shares available for issuance pursuant to this paragraph (b) shall not exceed a total of 500,000 shares (the “Annaul Increase”). In June 2024, the Company held the 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”). At the 2024 Annual Meeting, the stockholders of the Company approved an amendment to the 2021 Equity Incentive Plan which, among other things, increased the number of shares of common stock available for grant under the 2021 Equity Incentive Plan by 3,900,000 and increased the Annaul Increase from 2% to 5% (the “2021 Plan Amendment”). As of December 31, 2024, there were 5,464,475 shares of common stock reserved for issuance under the 2021 Equity Incentive Plan, with 2,767,023 shares of common stock available for grant and 2,697,452 shares of common stock underlying outstanding grants.

The Company offers an Employee Stock Purchase Plan (“ESPP”) that allows eligible employees to purchase shares of common stock at a discount of up to 15% from the lower of the fair market value at the beginning or end of the offering period. Under ASC 718, the ESPP is classified as compensatory, and stock-based compensation expense is recognized for the fair value of the discount and any embedded option features. No shares were issued under the ESPP during either the twelve months ended December 31, 2024 and 2023, and no stock-based compensation expense was recognized. As of December 31, 2024, 100,000 shares remained available for future issuance.

The expected term of the stock options was estimated using the “simplified” method, as defined by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment. The volatility assumption was determined by examining the historical volatilities for industry peer companies, as the Company does not have sufficient trading history for its common stock. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the options. The dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the

foreseeable future. Therefore, the Company has assumed no dividend yield for purposes of estimating the fair value of the options.

Stock Options

Total unrecognized compensation cost related to non-vested stock options as of December 31, 2024 was approximately $6.3 million and is expected to be recognized within future operating results over a weighted-average period of 3.07 years.

The weighted average grant date fair value of options granted during the years ended December 31, 2024 and 2023, was $2.99 and $4.93 per share, respectively. During the years ended December 31, 2024 and 2023, 307,317 options vested with a fair value totaling $1.8 million and 111,714 options vested with a fair value totaling $2.3 million, respectively.

Restricted Stock

At December 31, 2024, the Company had an aggregate of $0.3 million of unrecognized equity-based compensation related to restricted stock units outstanding. During the year ended December 31, 2024, 22,709 shares with a fair value of $0.2 million vested. The unrecognized expense for restricted stock units is expected to be recognized within future operating results over a weighted average period of 1.86 years.

Stock-based compensation expense