APVO

These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future.
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
RISK FACTOR SUMMARY The following is a summary of the material risks to our business, operations, and ownership of our common stock: • We have a history of losses and may not be profitable in the future. • Our management and board of directors have concluded that a substantial doubt is deemed to exist concerning our ability to continue as a going concern. • Our common stock may be at risk for delisting from the Nasdaq Capital Market in the future if we do not maintain compliance with Nasdaq’s continued listing requirements.
Delisting could adversely affect the liquidity of our common stock and the market price of our common stock could decrease. • We will require additional capital and may be unable to raise capital when needed or on acceptable terms. • Our success is dependent on our continued ability to attract, motivate and retain key personnel, and any failure to attract or retain key personnel may negatively affect our business. • If we experience delays or difficulties in the commencement, site initiation, enrollment of patients or completion of our clinical trials, the time to reach critical trial data and receipt of any necessary regulatory approvals could be delayed. • Our long-term success depends, in part, upon our ability to develop, receive regulatory approval for and commercialize our product candidates. • We may not be successful in establishing and maintaining collaborations that leverage our capabilities in pursuit of developing and commercializing our product candidates. • We face and will continue to face substantial competition and our failure to effectively compete may prevent us from achieving significant market penetration for our product candidates, if approved. • Our business is affected by macroeconomic conditions, including rising and fluctuating inflation, market volatility, bank failure, economic uncertainty, such as the impact from changing economic policies, tariffs and supply chain constraints as well as political events such as potential U.S. federal government shutdown, evolving healthcare policies, and military actions. • We may not be successful in our efforts to use and further develop our ADAPTIR or ADAPTIR-FLEX platforms. • If we are unable to protect our intellectual proprietary rights, our business could be harmed. • Actions of activist stockholders against us have been and could be disruptive and costly and may cause uncertainty about the strategic direction of our business. • The results of our current and planned preclinical studies and clinical trials may not satisfy the requirements of the FDA or non-U.S. regulatory authorities.
For the year ended December 31, 2025, we had net loss of $26.0 million.
As of December 31, 2025, we had an accumulated deficit of $275.1 million.
Our future ability to continue as a going concern will require us to generate positive cash flow from operations, obtain additional financing, enter into strategic alliances and/or sell assets in addition to our existing cash and cash equivalents and the funding provided by our Purchase Agreement with XOMA, potential future milestone payments from Medexus under our LLC Purchase Agreement (the LLC Purchase Agreement) and exercise of warrants.
The reaction of investors to our conclusion of our potential inability to continue as a going concern in future may adversely affect our share price and our ability to raise new capital and enter into strategic alliances.
If we become unable to continue as a going concern in the future, we may have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.
As of December 31, 2025, we had cash and cash equivalents in the amount of $21.6 million.
To continue our business including to support the ongoing clinical development of mipletamig and ALG.APV-527, develop additional products, support commercial marketing activities or otherwise provide additional financial flexibility we will require additional funding.
In addition, on June 16, 2025, we entered into that certain Standby Equity Purchase Agreement (the First SEPA) with YA II PN, LTD., a Cayman Islands exempt limited company (Yorkville), pursuant to which we have the right, but not the obligation, to issue and sell to Yorkville from time to time up to $25.0 million during the 36 months following the execution of the First SEPA.
On January 8, 2026, we entered into another Standby Equity Purchase Agreement (the Second SEPA) with Yorkville, pursuant to which we have the right, but not the obligation, to issue and sell to Yorkville from time to time up to $60.0 million during the 36 months following the execution of the Second SEPA.
We currently have an aggregate of $67.5 million capacity remaining under the two SEPAs.
Our future capital requirements will depend on many factors, including: • the cost to attract, motivate and retain key personnel; • the extent to which we invest in products or technologies; • the ability to satisfy the payment obligations and covenants under any future indebtedness; • the ability to secure partnerships and/or collaborations that generate additional cash; • capital improvements to our facilities; • the scope, progress, results, and costs of our development activities; • clinical development costs, timing, and other requirements to initiate and complete our Phase 1b/2 clinical trial for mipletamig and Phase 1 clinical trial of ALG.APV-527, as well as future clinical trials; • the cost of preparing, filing and prosecuting patent applications, obtaining, maintaining, enforcing and protecting our intellectual property rights and defending intellectual property-related claims; and • macroeconomic conditions, including the impact of inflation, cost of capital and the impact from the changes in economic policies and regulations, such as tariffs as well as political events such as a U.S. federal government shutdown, evolving healthcare policies, and military actions; and • the level, timing and receipt of any milestone payments under our agreements with Medexus with respect to the sales of IXINITY.
Our ability to raise future capital on acceptable terms or at all will be impacted by the macroeconomic environment, including fluctuating interest rates, economic uncertainty and volatility in the capital market, changing economic policies such as tariffs, geopolitical tensions and political events, including the ongoing war between Ukraine and Russia, United States and Iran and any other military event that could evolve out of the current conflicts, reoccurrences of COVID-19 or other pandemics, or other future widespread public health epidemics, a U.S. federal government shutdown, evolving healthcare policies, or other factors that could also adversely impact our ability to access capital as and when needed or increase our costs in order to raise capital.
Further, SEC regulations limit the amount of funds we can raise during any 12-month period pursuant to our shelf registration statement on Form S-3.
On June 20, 2025, we filed the latest amendment to the prospectus related to the Registration Statement on Form S-3 filed on February 14, 2025, pursuant to General Instruction I.B.6 of Form S-3 (General Instruction I.B.6), which updates the amount of shares that we are eligible to sell under that certain At The Market Offering Agreement with Roth Capital Partners, LLC, as sales agent (Roth), dated April 28, 2025 (the ATM Agreement).
So long as the aggregate market value of our common stock held by non-affiliates is less than $75 million, we will not sell shares under the ATM Agreement with a value of more than one-third of the aggregate market value of our common stock held by non-affiliates in any 12-month period due to the limitations of General Instruction I.B.6 of Form S-3 and the current public float of our common stock.
Additional capacity is expected to become available after October 2026.
Our business is affected by macroeconomic conditions, including fluctuating inflation rates, interest rates, market volatility, economic uncertainty, and supply chain constraints as well as political events such as a U.S. federal government shutdown and evolving healthcare policies.
Various macroeconomic factors and political events have in the past and could adversely affect in the future our business and the results of our operations and financial condition, including changes in inflation, interest rates and overall economic conditions and uncertainties such as those resulting from the current and future conditions in the global financial markets.
Recently, for instance, the current administration imposed and/or announced (and in some cases postponed) tariffs on imports from various countries and on certain products, which may lead to unpredictable economic consequences including inflation or trade wars.
For example, inflation has negatively impacted the Company by increasing our labor costs through higher wages and operating costs.
In addition, a potential U.S. federal government shutdown and evolving healthcare policies may affect our ability to advance our clinical programs and to raise capital on favorable terms or at all.
On February 28, 2020, we entered into the LLC Purchase Agreement with Medexus, pursuant to which we sold all of the issued and outstanding limited liability company interests of Aptevo BioTherapeutics, a subsidiary of Aptevo that wholly owns the IXINITY and related Hemophilia B business.
Dirk Huebner, our Chief Financial Officer, Daphne Taylor, our General Counsel, SoYoung Kwon, or other key employees, our ability to implement our business strategy could be materially harmed.
On February 3, 2026, we announced that effective as of April 1, 2026, Marvin L.
White will transition to the role of Executive Chair of the Board, and Jeff Lamothe, the Company’s current Chief Operating Officer, will assume the role of President and Chief Executive Officer of the Company.
Our success will depend, in part, on the effectiveness of this transition.
If we do not successfully manage this transition, it could be viewed negatively by our customers, employees, investors, and other third-party partners and could have an adverse impact on our business, results of operations, or our stock price.
In addition, we face intense competition for qualified employees from biotechnology and pharmaceutical companies, research organizations and academic institutions.
We believe part of being able to attract, motivate and retain personnel is our ability to offer a competitive compensation package.
The annual limitation is generally equal to the value of the outstanding stock of the corporation immediately before the ownership change (excluding certain capital contributions), multiplied by the long-term tax-exempt rate as published by the IRS for the month in which the ownership change occurs (the long-term tax-exempt rate for June 2025 is 3.61%).
As of December 31, 2025, we had approximately $207.9 million and $70.8 million of federal and state net operating loss carryforwards, respectively, available to reduce future taxable income that will begin to expire in 2037 for federal income tax purposes.
We are in the process of completing an IRC Section 382/383 study through December 31, 2025 on our federal and state tax attributes.
Based on the study, potential historical ownership changes have been identified, including a potential ownership change in June 2025.
As a result of the potential June 2025 ownership change, there may be an additional permanent limitation on our ability to use approximately $0.8 million tax credits solely due to the IRC 382/383 limitations, assuming sufficient future taxable income.
If an ownership change occurs in the future, our ability to use our net operating loss carryforwards and credits could be further limited.
Tax changes may affect the deductibility of our research and development expenditures.

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Gone since FY2024

RISK FACTOR SUMMARY The following is a summary of the material risks to our business, operations, and ownership of our common stock: • Our common stock may be at risk for delisting from the Nasdaq Capital Market in the future if we do not maintain compliance with Nasdaq’s continued listing requirements.
Delisting could adversely affect the liquidity of our common stock and the market price of our common stock could decrease. • We have a history of losses and may not be profitable in the future. • Our ability to continue as a going concern. • We will require additional capital and may be unable to raise capital when needed or on acceptable terms. • Our success is dependent on our continued ability to attract, motivate and retain key personnel, and any failure to attract or retain key personnel may negatively affect our business. • If we experience delays or difficulties in the commencement, site initiation, enrollment of patients or completion of our clinical trials, the time to reach critical trial data and receipt of any necessary regulatory approvals could be delayed. • Our long-term success depends, in part, upon our ability to develop, receive regulatory approval for and commercialize our product candidates. • We may not be successful in establishing and maintaining collaborations that leverage our capabilities in pursuit of developing and commercializing our product candidates. • We face and will continue to face substantial competition and our failure to effectively compete may prevent us from achieving significant market penetration for our product candidates, if approved. • Our business is affected by macroeconomic conditions, including rising and fluctuating inflation, interest rates, market volatility, bank failure, economic uncertainty, such as the impact from changing economic policies, tariffs and supply chain constraints. • We may not be successful in our efforts to use and further develop our ADAPTIR or ADAPTIR-FLEX platforms. • If we are unable to protect our intellectual proprietary rights, our business could be harmed. • Actions of activist stockholders against us have been and could be disruptive and costly and may cause uncertainty about the strategic direction of our business. • The results of our current and planned preclinical studies and clinical trials may not satisfy the requirements of the FDA or non-U.S. regulatory authorities.
For the year ended December 31, 2024, we had net loss of $24.1 million compared to $17.4 million for the same period in 2023.
As of December 31, 2024, we had an accumulated deficit of $247.6 million.
Our ability to continue as a going concern will require us to generate positive cash flow from operations, obtain additional financing, enter into strategic alliances and/or sell assets in addition to our existing cash and cash equivalents and the funding provided by our Purchase Agreement with XOMA, potential future milestone payments from Medexus under our LLC Purchase Agreement and exercise of warrants.
The reaction of investors to the inclusion of a going concern statement in this report on Form 10-K, our current lack of cash resources and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital and enter into strategic alliances.
If we become unable to continue as a going concern, we may have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.
As of December 31, 2024, we had cash and cash equivalents in the amount of $8.7 million.
We will require additional funding to continue our business including to support the ongoing clinical development of mipletamig and ALG.APV-527, develop additional products, support commercial marketing activities or otherwise provide additional financial flexibility.
Our future capital requirements will depend on many factors, including: • the cost to attract, motivate and retain key personnel; • the level, timing and receipt of any milestone payments under our agreements with Medexus with respect to the sales of IXINITY; • the extent to which we invest in products or technologies; • the ability to satisfy the payment obligations and covenants under any future indebtedness; • the ability to secure partnerships and/or collaborations that generate additional cash; • capital improvements to our facilities; • the scope, progress, results, and costs of our development activities; • clinical development costs, timing, and other requirements to initiate and complete our Phase 1b/2 clinical trial for mipletamig and Phase 1 clinical trial of ALG.APV-527, as well as future clinical trials; • the cost of preparing, filing and prosecuting patent applications, obtaining, maintaining, enforcing and protecting our intellectual property rights and defending intellectual property-related claims; and • macroeconomic conditions, including the impact of inflation, cost of capital and the impact from the changes in economic policies and regulations, such as tariffs.
Our ability to raise future capital on acceptable terms or at all will be impacted by the macroeconomic environment, including fluctuating interest rates, economic uncertainty and volatility in the capital market, changing economic policies such as tariffs, geopolitical tensions and political events, including the ongoing war between Ukraine and Russia and the conflict in the Middle East, reoccurrences of COVID-19 or other pandemics, or other future widespread public health epidemics, or other factors that could also adversely impact our ability to access capital as and when needed or increase our costs in order to raise capital.
On August 4, 2023, we completed a public offering related to the issuance and sale of 4,959 shares of common stock (or pre-funded warrant in lieu thereof, all of which have since been exercised) and received net proceeds of $4.3 million.
On November 9, 2023, we entered into a warrant inducement agreement to exercise for cash 8,725 existing common warrants issued on August 4, 2023, and issue 3,805 Series A-1, 3,805 Series A-2, 4,920 Series B-1 and 4,920 Series B-2 common warrants, for which we received net proceeds of $3.0 million.
On April 15, 2024, we completed a public offering related to the issuance and sale of 91,891 shares of our common stock (or pre-funded warrant in lieu thereof, all of which have since been exercised) and received $4.0 million in net proceeds.
On July 1, 2024, we completed a registered direct offering (the "July Registered Direct Offering") related to the issuance and sale of 144,318 shares of our common stock (or pre-funded warrant in lieu thereof, all of which have since been exercised) and received $2.3 million in net proceeds.
On September 18, 2024, we completed a registered direct offering (the "September Registered Direct Offering") related to the issuance and sale of 245,699 shares of our common stock (or pre-funded warrant in lieu thereof, all of which have since been exercised) and received $2.5 million in net proceeds.
On December 12, 2024, we entered into a warrant inducement agreement with certain warrant holders to exercise for cash 823,544 common warrants issued in our previous offerings and issue 1,647,088 common warrants, for which we received net proceeds of $5.6 million.
Future issuances of common stock may include, but not be limited to, (i) the issuance of the remaining outstanding shares of common stock upon the exercise of warrants issued in connection with our August and November 2023 and April, July, September and December 2024 offerings of common stock and warrants that would result in gross proceeds of $16.5 million, and (ii) the issuance of common stock in a firm commitment offering or private placement.
Our Shelf Registration Statement on Form S-3 expired on December 18, 2023.
SEC regulations limit the amount of funds we can raise during any 12-month period pursuant to a shelf registration statement on Form S-3.
Prior to expiration of our Shelf Registration Statement, on March 29, 2022, we filed an amendment to the prospectus related to the Shelf Registration Statement on Form S-3 filed on December 14, 2020 pursuant to General Instruction I.B.6 of Form S-3 (General Instruction I.B.6), which updated the amount of registered shares that we were eligible to sell.
So long as the aggregate market value of our common stock held by non-affiliates was less than $75 million, we would not be permitted to sell any registered shares under such Shelf Registration Statement on Form S-3 with a value of more than one-third of the aggregate market value of our common stock held by non-affiliates in any 12-month period due to the limitations of General Instruction I.B.6 of Form S-3 and the then-current public float of our common stock.
Our business is affected by macroeconomic conditions, including fluctuating inflation rates, interest rates, market volatility, economic uncertainty, and supply chain constraints.
Various macroeconomic factors have in the past and could adversely affect in the future our business and the results of our operations and financial condition, including changes in inflation, interest rates and overall economic conditions and uncertainties such as those resulting from the current and future conditions in the global financial markets.
For instance, inflation has negatively impacted the Company by increasing our labor costs, through higher wages and higher interest rates, and operating costs.
On February 28, 2020, we entered into a Purchase Agreement with Medexus, pursuant to which we sold all of the issued and outstanding limited liability company interests of Aptevo BioTherapeutics, a subsidiary of Aptevo that wholly owns the IXINITY and related Hemophilia B business.
Royalties were earned at the rate of 2% of net revenue through June 2022.
As of June 30, 2022, the royalty rate on net revenue of IXINITY increased to 5%.
On March 29, 2023, we entered into and closed a Purchase Agreement with XOMA pursuant to which we sold to XOMA our right, title, and interest to all future deferred payments from Medexus and a portion of potential milestones.
As consideration, we received $9.6 million at closing from XOMA and an additional $0.05 million post-closing payment.
We accounted for the $9.6 million Closing Payment and the $0.05 million post-closing payment from XOMA as other income in accordance with ASC 610-20 Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets in the first quarter of 2023.
Lamothe, our Chief Financial Officer, Daphne Taylor, our General Counsel, SoYoung Kwon, or other key employees, our ability to implement our business strategy could be materially harmed.
We face intense competition for qualified employees from biotechnology and pharmaceutical companies, research organizations and academic institutions.
We believe part of being able to attract, motivate and retain personnel is our ability to offer a competitive compensation package, including equity incentive awards.
The annual limitation is generally equal to the value of the outstanding stock of the corporation immediately before the ownership change (excluding certain capital contributions), multiplied by the long-term tax-exempt rate as published by the IRS for the month in which the ownership change occurs (the long-term tax-exempt rate for June 2024 is 3.44%).
As of December 31, 2024, we had approximately $173.9 million and $70.8 million of federal and state net operating loss carryforwards, respectively, available to reduce future taxable income that will begin to expire in 2037 for federal income tax purposes.
The Company is in the process of completing an IRC Section 382/383 study through December 31, 2024 on its federal and state tax attributes.
Based on the study, potential historical ownership changes have been identified, including a potential ownership change in December 2024.
As a result of the potential December 2024 ownership change, there may be a permanent limitation on our ability to use approximately $14 million of federal and state net operating loss carryforwards and approximately $7 million tax credits solely due to the IRC 382/383 limitations, assuming sufficient future taxable income.
If an ownership change occurs in the future, our ability to use our net operating loss carryforwards and credits could be limited.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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