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Aptevo Therapeutics(APVO) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited condensed consolidated financial statements for Q2 2025 reveal a $12.6 million net loss and $260.2 million accumulated deficit, raising going concern doubts Condensed Consolidated Balance Sheets As of June 30, 2025, total assets reached $15.6 million, with cash at $9.4 million, total liabilities decreasing to $9.1 million, and stockholders' equity improving to $6.5 million Balance Sheet Highlights (in thousands) | Balance Sheet Highlights (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $9,410 | $8,714 | | Total current assets | $11,081 | $10,659 | | Total assets | $15,624 | $15,591 | | Liabilities & Equity | | | | Total current liabilities | $4,891 | $6,207 | | Total liabilities | $9,100 | $10,836 | | Total stockholders' equity | $6,524 | $4,755 | Condensed Consolidated Statements of Operations For the six months ended June 30, 2025, the company reported a net loss of $12.6 million with no revenue, as R&D expenses slightly decreased and G&A expenses slightly increased Statement of Operations (in thousands) | Statement of Operations (in thousands) | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and development | $(6,961) | $(7,395) | | General and administrative | $(5,745) | $(5,612) | | Loss from operations | $(12,706) | $(13,007) | | Net loss | $(12,612) | $(12,717) | | Basic and diluted net loss per share | $(30.84) | $(4,458.98) | Condensed Consolidated Statements of Cash Flows Net cash used in operations was $13.7 million, offset by $14.4 million from financing activities, resulting in a $0.7 million cash increase and a $9.4 million ending balance Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,668) | $(12,804) | | Net cash provided by financing activities | $14,364 | $3,966 | | Increase (decrease) in cash | $696 | $(8,838) | | Cash and cash equivalents at end of period | $9,410 | $8,066 | Notes to Condensed Consolidated Financial Statements Notes detail the company's clinical-stage biotech focus, disclose substantial doubt about its going concern status, and cover equity offerings, reverse stock splits, and single-segment operations - The company is a clinical-stage biotechnology firm focused on developing novel immunotherapy candidates for cancer, with two clinical candidates (mipletamig and ALG.APV-527) and three preclinical candidates in development24 - Management has concluded there is substantial doubt about the company's ability to continue as a going concern for the next year due to recurring net losses ($12.6 million for the six months ended June 30, 2025) and negative operating cash flows ($13.7 million for the same period)25 - The company effected a 1-for-20 reverse stock split on May 23, 2025, with all share and per-share amounts retroactively adjusted4345 - During the first six months of 2025, the company raised capital through multiple equity offerings, including a registered direct offering in April and an at-the-market offering in June565758 - The company operates as a single operating segment focused on the discovery and development of novel oncology therapeutics74 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses cancer immunotherapy development, an 85% mipletamig remission rate, $15.9 million financing, operational expense shifts, and liquidity challenges, including $9.4 million cash and ongoing financing efforts Results of Operations R&D expenses decreased by $0.4 million to $7.0 million due to preclinical shifts, while G&A expenses increased by $0.1 million to $5.7 million due to consulting costs Expense Comparison (in thousands) | Expense Comparison (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and Development | $6,961 | $7,395 | | General and Administrative | $5,745 | $5,612 | - The decrease in R&D spending was driven by the ramp-down of the ALG.APV-527 escalation phase, partially offset by increased costs for the mipletamig trial due to patient enrollment101 Liquidity and Capital Resources As of June 30, 2025, the company held $9.4 million in cash with a $260.2 million accumulated deficit, having raised $15.9 million through equity offerings and utilizing SEPA and ATM agreements for future capital - The company had cash and cash equivalents of $9.4 million as of June 30, 2025113 - For the six months ended June 30, 2025, the company raised $15.9 million in proceeds through various equity offerings115 - The company has a Standby Equity Purchase Agreement (SEPA) with Yorkville to sell up to $25.0 million of common stock over 36 months109 - An At The Market (ATM) Offering Agreement with Roth Capital allows the company to sell shares, under which it raised $3.8 million in the first six months of 2025110117 - On August 6, 2025, the Compensation Committee approved a one-time supplemental cash payment of $1.2 million to its executive officers, along with increases to base salaries and bonus targets120121 Quantitative and Qualitative Disclosures About Market Risk No material changes to market risk disclosures were reported as of June 30, 2025, compared to the prior Annual Report on Form 10-K - There were no material changes to the company's market risk disclosures since the last Annual Report on Form 10-K filed on February 14, 2025130 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective131 - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls132 PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any legal claims or actions expected to materially impact its financial condition or operations - Management believes there are currently no pending legal claims or actions that could materially and adversely affect the company135 Risk Factors This section outlines material risks including significant operating losses, going concern doubts, capital needs, potential Nasdaq delisting, clinical trial delays, third-party dependencies, competition, and IP protection - The company has a history of significant operating losses, with a net loss of $12.6 million for the six months ended June 30, 2025, and an accumulated deficit of $260.2 million138 - There is substantial doubt about the company's ability to continue as a going concern, and it will require additional capital to fund operations139140 - The company's common stock is at risk of delisting from the Nasdaq Capital Market if it fails to maintain compliance with continued listing requirements, such as minimum stockholders' equity180181 - The company's long-term success depends on its ability to develop, receive regulatory approval for, and commercialize its product candidates, a process which is lengthy, expensive, and uncertain257 - The business is dependent on third parties for conducting clinical trials and manufacturing product candidates, and any failure by these parties could substantially harm the business211218 Unregistered Sales of Equity Securities and Use of Proceeds Discloses unregistered equity transactions, including common warrant sales in a private placement and a Standby Equity Purchase Agreement (SEPA) with Yorkville - On April 4, 2025, the company sold common warrants to purchase up to 176,470 shares of common stock in a private placement, relying on exemptions under Section 4(a)(2) and/or Regulation D of the Securities Act322 - On June 16, 2025, the company entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing it to sell up to $25.0 million of its common stock over 36 months323 Defaults Upon Senior Securities This item is not applicable Mine Safety Disclosures This item is not applicable Other Information Details significant executive compensation adjustments approved August 6, 2025, including a $1.2 million supplemental cash payment and increases to base salaries and bonus targets Supplemental Cash Payments to Executive Officers | Executive Officer | Supplemental Cash Payment | | :--- | :--- | | Marvin L. White (CEO) | $400,000 | | Jeffrey G. Lamothe (COO) | $300,000 | | SoYoung Kwon (GC) | $250,000 | | Daphne Taylor (CFO) | $250,000 | | Total | $1,200,000 | Executive Officer Base Salary Adjustments | Executive Officer | Prior Base Salary | New Base Salary (as of Aug 6, 2025) | | :--- | :--- | :--- | | Marvin L. White (CEO) | $595,000 | $690,000 | | Jeffrey G. Lamothe (COO) | $504,400 | $590,000 | | SoYoung Kwon (GC) | $472,500 | $545,000 | | Daphne Taylor (CFO) | $457,000 | $520,000 | Exhibits Provides an index of exhibits filed with the Form 10-Q, including documents for the reverse stock split, financing agreements, and officer certifications - The report includes exhibits related to the May 2025 reverse stock split, warrant and securities purchase agreements from April and June 2025 financings, and the Standby Equity Purchase Agreement from June 2025336 Signatures The report was signed by the President and CEO, and the Senior Vice President and CFO on August 11, 2025 - The report was signed on August 11, 2025, by Marvin L. White, President and Chief Executive Officer, and Daphne Taylor, Senior Vice President and Chief Financial Officer339341