APVO

Business Context and Reporting Period

Aptevo Therapeutics Inc. (APVO) is a clinical-stage biotechnology company developing novel multispecific immunotherapies for cancer treatment. The company operates as a single segment focused on discovery and development. This Form 10-Q covers the quarterly period ended June 30, 2026. As of August 14, 2026, there were 1,801,970 shares of common stock outstanding.

Key Financial Metrics

Operating Expenses (Six Months Ended June 30, 2026):

• Research and Development: $7.6 million
• General and Administrative: $5.7 million

Material Changes vs. Prior Period

• Liquidity Decline: Cash and cash equivalents decreased by approximately $11.8 million during the six months ended June 30, 2026, compared to a slight increase in the prior year period. This was driven by a net cash burn of $13.4 million from operations, partially offset by $1.6 million in financing proceeds.
• Financing Activity: The company raised approximately $1.6 million in net proceeds from financing activities, primarily through the issuance of common stock under Standby Equity Purchase Agreements (SEPAs) and a strategic investment from Niowave. This contrasts with $14.4 million raised in the same period in 2025.
• Expense Trends: Research and development expenses increased by $0.6 million year-over-year, primarily due to higher clinical study costs for the lead candidate mipletamig. General and administrative expenses remained relatively flat.
• Equity Position: Stockholders' equity decreased from $17.4 million at year-end 2025 to $6.0 million at June 30, 2026, reflecting the accumulated net loss.

Guidance, Outlook, Risks, and Unusual Items

Going Concern Warning: Management has concluded that there is substantial doubt about the company's ability to continue as a going concern for the one-year period following the issuance of these financial statements. The company does not have sufficient cash to complete the clinical development of its product candidates and will require additional funding.

Recent Developments and Outlook:

• Collaborations: Entered a 50/50 collaboration with Niowave to develop radiopharmaceutical candidates, receiving $0.5 million in equity investment. Also received a $1.5 million grant from the Andy Hill Cancer Research Endowment (CARE) Fund for IND-enabling studies of APVO451.
• Capital Resources: The company has access to approximately $66.8 million under two SEPAs with Yorkville. However, a subsequent event on August 12, 2026, involved a private placement and warrant inducement that included a standstill on the use of the SEPAs and ATM agreement for 12 months following stockholder approval.
• Delisting Risk: The company faces potential delisting risks if it fails to maintain Nasdaq listing requirements, specifically the new Market Value Requirement of $5 million (subject to a temporary stay) and the minimum bid price requirement.

Unusual Items: A deemed dividend of $0.1 million was recorded in the first quarter of 2026 due to the triggering of a down-round feature on common warrants, increasing the net loss attributable to common stockholders.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $9.8 million cash balance against the $13.4 million semi-annual operating burn rate and the timeline for the next financing event.
• Financing Restrictions: Confirm the status of the August 12, 2026, standstill agreement regarding the SEPAs and ATM, which limits immediate access to capital lines.
• Nasdaq Compliance: Monitor the company's stock price and market capitalization to ensure compliance with Nasdaq listing rules, particularly the $5 million market value requirement.
• Clinical Progress: Review updates on the RAINIER trial for mipletamig and the status of the Niowave collaboration, as these are critical for future funding milestones.
• Grant Utilization: Track the utilization of the $1.5 million CARE Fund grant and the requirement for non-state matching contributions.