Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)

Operating and Financial Review and Prospects

You should read the following discussion and analysis of our financial condition and results of operations together with the historical audited annual consolidated financial statements and the related notes included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled Item 3.D. "Risk Factors" of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Company Overview

We are a clinical-stage biotechnology company focused on discovering and developing oncology therapies to address unmet medical needs, especially for difficult-to-treat and treatment-resistant cancers. Since our founding in 2015, we have built a pipeline focused on oncology, of which three product candidates remain in active clinical stage development. Our leading product candidate, vebreltinib, has shown initial promising clinical results.

We were originally formed as CB Therapeutics Inc. as a result of a spin-off of Crown Bioscience International, which was completed on December 31, 2015. As a result, we became the owner of certain patent and intellectual property rights relating to some of our product candidates. For more information relating to the series of transactions resulting in our acquisition of these patent rights, please see "-Intellectual Property Assignment", above under Item 4.B.

Our primary business is conducted by our global drug development team at our U.S. headquarters located in the San Francisco Bay Area. We also operate in China with our development team located in Hangzhou. We have wholly-owned subsidiaries in Australia (Apollomics (Australia) Pty Ltd, formed in November 2016), Hong Kong (Apollomics (Hong Kong) Limited, formed in June 2019) and China (Zhejiang Crownmab ("Zhejiang Crownmab") Biotech Co. Ltd. and Zhejiang Crown Bochuang Biopharma Co. Ltd., formed in May 2018 and May 2020, respectively).

Our strategic focus is the development of novel therapies targeting difficult to treat cancers. We use both targeted, immuno-oncology, and other innovative approaches to address a range of cancer indications, such as lung cancer, brain cancer, and other solid tumors. Our pipeline includes a variety of cancer treatment programs that utilize tumor inhibitors, cell adhesion inhibitors, immune checkpoint inhibitors, a cancer vaccine, monotherapies, combination therapies or a multi-functional protein with the goals to improve response rates and reduce chemo-resistance and toxicity compared to the current treatment standards. We have adopted a biomarker-driven diagnostic approach for patient screening to increase precision in identifying patients that can potentially benefit from target therapy.

Business Combination

On March 29, 2023, Apollomics consummated the Business Combination with Maxpro pursuant to the Business Combination Agreement. In connection with the closing of the Business Combination, Apollomics became a publicly traded company on Nasdaq.

2025 PIPE Financing

On September 2, 2025, the Company entered into subscription agreements (the "PIPE Subscription Agreements") for a private placement (the "PIPE") with certain accredited investors (each, a "Purchaser" and collectively, the "Purchasers"). The closing of the PIPE occurred on September 3, 2025 (the "Closing Date").

Pursuant to the PIPE Subscription Agreements, the Purchasers purchased an aggregate of 1.04 million Class A ordinary shares, par value $0.01 per share, of the Company (the "PIPE Shares"), at a price per share of $3.9317 (the closing price on August 29, 2025), representing aggregate gross proceeds to the company of $4.1 million, prior to the payment of fees and expenses. Following the issuance of the PIPE Shares, Hung-Wen (Howard) Chen, who was appointed Chairman of the Company's board of directors ("Board") as described below, and his affiliates beneficially own approximately 41% of the outstanding Class A ordinary shares and Maxpro Investment Co., Ltd. and its affiliates beneficially own approximately 4.9% of the outstanding Class A ordinary shares.

Key Factors Affecting Apollomics' Operating Results

We believe that our future performance and success depends to a substantial extent on our product candidate pipeline and the development of our product candidates, each of which is in turn subject to significant risks and challenges, including those discussed in Item 4 and in the section of this Annual Report entitled Item 3.D. "Risk Factors."

We currently have no products approved for commercial sales and have not generated any revenue from product sales. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing, and distribution.

Since our inception, we have incurred significant operating losses. For the years ended December 31, 2023, 2024 and 2025, our net loss was $172.6 million, $53.9 million and $10.9 million, respectively, and the fair value change of convertible preferred shares was $76.4 million, nil and nil, respectively, and an excess fair value charge of shares over fair value net assets acquired in the business combination agreement of $45.5 million, nil, and nil, respectively, leaving net loss from operations as $50.7 million, $53.9 million and $10.9 million, respectively, which resulted substantially from R&D expenses and administrative expenses.

For the years ended December 31, 2024 and 2025, we had an accumulated deficit of $700.8 million and $711.8 million, respectively. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future if and as we:

We expect that our financial performance will fluctuate quarterly and yearly due to the development status of our drug candidates, our efforts to obtain regulatory approval and commercialize our drug candidates.

Based on our evaluation of conditions and events as of December 31, 2025, management has determined that substantial doubt exists about the Company's ability to continue as a going concern. As of that date, we had cash and cash equivalents of $3.3 million, a history of recurring losses and negative shareholders' equity, and limited liquidity relative to our operating requirements. Although we implemented cost-reduction initiatives beginning in early 2024 and continuing through 2025, and expect liquidity support from financing activities and strategic partnerships, even after factoring in the expected receipt of the $2.3 million outstanding receivable balance of the upfront payment from LaunXP in Q2 2026, our existing cash resources are not sufficient to meet our obligations as they come due within the assessment period through April 30, 2027. Subsequent to year-end, our liquidity was further supported by a $2.0 million unsecured bridge loan provided by our Chairman and CEO, Mr. Hung-Wen (Howard) Chen, on March 30, 2026. Management's plans to address this shortfall include raising additional capital through equity or debt financing and generating cash inflows from strategic partnerships; however, these plans are not contractually committed, are subject to external factors and there can be no assurance that such capital will be available on acceptable terms, or at all. These conditions indicate the existence of material uncertainties that may cast substantial doubt on the Company's ability to continue as a going concern.

Notwithstanding these material uncertainties, the accompanying financial statements have been prepared on a going concern basis of accounting and do not include any adjustments to the carrying amounts and classification of assets and liabilities that may be necessary in the event that the Company is no longer able to continue its operations as a going concern.

Components of Results of Operations

Other Income

Other income primarily includes income from a licensee whose negotiation period was no longer valid and income for a liability that was extinguished in the current year. Other income also includes interest income primarily derived from our cash and cash equivalents.

Foreign Exchange Losses

Foreign exchange losses are a result of foreign exchange rate fluctuation.

Fair Value Change of Financial Assets at Fair Value Through Profit or Loss ("FVTPL")

Fair value change of financial assets at FVTPL consisted of non-cash impacts on our profit or loss as a result of the fair value change of our investment in a money market fund in the United States which solely holds investments in U.S. treasury bonds. For the years ended December 31, 2024 and 2025, the fair value change of financial assets at fair value through profit or loss was a $0.2 million increase and a nil increase or decrease, respectively.

Research and Development Expenses

Our R&D costs primarily consist of salaries, benefits and share-based compensation for our R&D employees, and expenses for consultants and external contract research and contract manufacturing organizations. From inception through December 31, 2025, we have incurred $193.0 million in R&D expenses. We may increase our R&D expenses in the future.

We manage certain activities such as clinical trial operations, manufacture of therapeutic candidates, and preclinical animal toxicology studies through third-party CROs. The only costs we track by each therapeutic candidate are external costs such as services provided to us by CROs, manufacturing of preclinical and clinical drug products, and other outsourced R&D expenses. We do not assign or allocate internal costs such as salaries and benefits, facilities costs, lab supplies and the costs of preclinical research and studies to individual development programs.

Research and development (R&D) activities are central to our business. Product candidates in later stages of clinical development will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. There are numerous factors associated with the successful commercialization of any product candidates we may develop in the future, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development program and plans. An internally generated intangible asset arising from development activities (or from the development phase of an internally generated project) is recognized if, and only if, all of the following have been demonstrated:

The amount initially recognized for an internally generated intangible asset is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses (if any), on the same basis as intangible assets that are acquired separately.

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains and losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

Development costs which do not meet these criteria are expensed when incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites. We cannot determine with certainty the duration and completion costs of the current or future clinical trials of our therapeutic candidates or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our therapeutic candidates for which we or any partner obtain regulatory approval.

The duration, costs and timing of clinical trials and development of therapeutic candidates will depend on a variety of factors, including:

A change in the outcome of any of these variables with respect to the development of a therapeutic candidate could mean a significant change in the costs and timing associated with the development of that therapeutic candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the

completion of the clinical development of therapeutic candidates, or if we experience significant delays in the enrollment in any clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Administrative Expenses

Administrative expenses consist primarily of salaries, benefits, and other related costs, including share-based payment expense, for personnel in our executive, legal, human resources, finance, and administrative functions. Administrative expenses also include professional fees for legal, patent, consulting, accounting, tax and audit services, travel expenses and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities, technology, and other operating costs. We expect that our administrative expenses will decrease substantially in the future in line with our strategic shift, as we decrease our administrative personnel, including the departure of two of our executive officers, and overall reduction of external expenses.

Impairment loss of an intangible asset

Impairment loss of an intangible asset consists of losses as a result of our review of carrying amounts of intangible assets with finite useful lives carried at each reporting period by management. In 2025 we incurred a $1.7 million impairment loss for patent rights because of the failure of the breaches to terms of the collaboration agreement and we subsequently terminated the license. In 2024 we incurred $13.0 million impairment loss for patent rights because of the failure of the licensor's vendor to provide drug supplies and we subsequently terminated the license. We did not incur any impairment losses of intangible assets for the years ended December 31, 2023.

Other Expenses

Our other expenses amounted to $46.0 million, $0.1 million and nil for the years ended December 31, 2023, 2024 and 2025, respectively. In 2023 other expenses primarily included professional fees incurred by us in relation to the business combination transaction. In 2023 we also incurred an excess fair value charge of shares over fair value net assets acquired in the business combination agreement of $45.5 million. In 2024 and 2025, other expenses related to professional fees and filing fees.

We incur significant additional expenses related to compliance with the rules and regulations of the SEC, Sarbanes Oxley Act, and the listing standards of Nasdaq, additional corporate, director and officer insurance expenses, increased legal, audit and consulting fees and greater investor relations expenses.

Recent Accounting Pronouncements

See Note 3 to our consolidated financial statements included elsewhere in this Annual Report for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Annual Report.

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report. We have made rounding adjustments to reach some of the figures included in this Annual Report. Consequently, numerical figures shown as totals in some tables or discussed below may not be arithmetic aggregations of the figures that precede them.

The following table presents Apollomics' consolidated statements of loss and other comprehensive loss data for the years ended December 31, 2023, 2024 and 2025:

Year Ended December 31, 2024 Compared to Year Ended December 31, 2025

Other Income

The following table summarizes the components of our other income for the years ended December 31, 2024 and 2025:

Other income was $1.5 million for the year ended December 31, 2024, compared to $0.5 million for the year ended December 31, 2025. The decrease of $(1.0) million, or -66.8%, was mainly driven by a $0.5 million write off for a China license liability, $0.3 million in interest income due to lower cash and cash equivalent balances, and $0.2 million in other individually immaterial fluctuations,

Other Gains and Losses

The following table summarizes the component of our other gains and losses for the years ended December 31, 2024 and 2025:

Other gains and losses reflects a gain of $0.1 million for the year ended December 31, 2024, compared to a loss of $(0.1) million for the year ended December 31, 2025. The decrease of $(0.3) million, or 197.2%, was primarily from the exchange gain of $0.2 million in Australian dollars and $0.1 million in other individually immaterial currencies losses in 2025.

Research and Development Expenses

The following table summarizes the components of our R&D expenses for the years ended December 31, 2024 and 2025:

Research and development expenses for the year ended December 31, 2024 were $24.6 million, compared to $5.5 million for the year ended December 31, 2025. The decrease of $(19.0) million, or 77.5%, is primarily due to a $10,9 million decrease in active clinical program expenditure due to a more narrow development focus, $(4.7) million decrease in employee other compensation and benefits due to R&D employee reductions in the second half of 2024 to reduce expenses, and a $(3.4) million decrease in employee share-based compensation mainly from employee departures in 2024 and 2025.

We manage our R&D third-party service fees and our contractor expenses by product, which is shown in the table above. We do not allocate our R&D employee compensation and benefits, nor our R&D employee share-based compensation into our product lines.

Administrative Expenses

The following table summarizes the components of our administrative expenses for the years ended December 31, 2024 and 2025:

Administrative expenses were $17.8 million for the year ended December 31, 2024, compared to $12.4 million for the year ended December 31, 2025. The decrease of $(5.3) million, or 30.0%, was primarily due to a $(8.5) million decrease in employee share-based compensation mainly from the employee departures in 2024 and 2025, $(2.4) million decrease in employee other compensation and benefits due to the same aforementioned employee departures and $(0.6) million in other administrative expenses. These decreases were partially offset by $5.3 million increase due to an increase in third party service fees

Year Ended December 31, 2023 Compared to Year Ended December 31, 2024

Other Income

The following table summarizes the components of our other income for the years ended December 31, 2023 and 2024:

Other income was $1.5 million for the year ended December 31, 2024, compared to $1.2 million for the year ended December 31, 2023. The increase of $0.3 million, or 22.4%, was mainly driven by a $0.5 million write off for a China license liability and $0.2 million in other individually immaterial fluctuations, which was partially offset by a decrease of $(0.2) million in subsidies received from the Australian government specifically for supporting the research and development activities carried out in Australia and a decrease of $(0.3) million in interest income due to lower cash and cash equivalent balances.

Other Gains and Losses

The following table summarizes the component of our other gains and losses for the years ended December 31, 2023 and 2024:

Other gains and losses reflects a gain of $1.2 million for the year ended December 31, 2023, compared to a gain of $0.1 million for the year ended December 31, 2024. The decrease of ($1.0) million, or 87.8%, was primarily from the exchange gain of $1.6 million of RMB denominated time deposits with original maturity over three months held by one of our PRC subsidiaries, and the exchange gain of $0.5 million in Australian dollars in 2023.

Fair Value Change of Convertible Preferred Shares

The fair value change of convertible preferred shares for the year ended December 31, 2023 was $(76.4) million, compared to $0 for the year ended December 31, 2024. The decrease of $76.4 million, or 100%, is due to no preferred shares outstanding as of March 29, 2023 as all were converted to common shares.

Research and Development Expenses

The following table summarizes the components of our R&D expenses for the years ended December 31, 2023 and 2024:

Research and development expenses for the year ended December 31, 2023 were $34.2 million, compared to $24.6 million for the year ended December 31, 2024. The decrease of $(9.6) million, or 28.2%, is primarily due to a $(5.9) million decrease in APL-101 expenditure due to a more narrow development focus, $(2.3) million decrease in employee other compensation and benefits due to R&D employee

reductions in the second half of 2024 to reduce expenses, and a $(1.6) million decrease in employee share-based compensation mainly from the aforementioned employee reductions in the second half of 2024.

We manage our R&D third-party service fees and our contractor expenses by product, which is shown in the table above. We do not allocate our R&D employee compensation and benefits, nor our R&D employee share-based compensation into our product lines.

Administrative Expenses

The following table summarizes the components of our administrative expenses for the years ended December 31, 2023 and 2024:

Administrative expenses were $20.6 million for the year ended December 31, 2023, compared to $17.8 million for the year ended December 31, 2024. The decrease of $(2.9) million, or 13.9%, was primarily due to a $(1.8) million decrease in other expenses due to a decrease in third-party service fees and other administrative expenses related to the business combination in the year ended December 31, 2023.

Funding Requirements

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and continuing operating losses for the foreseeable future as we advance the clinical development of our programs. For the years ended December 31, 2023, 2024 and 2025, our net loss was $172.6 million, $53.9 million and $10.9 million, respectively and the fair value change of convertible preferred shares was $76.4 million, nil, and nil, and an excess fair value charge of shares over fair value net assets acquired in the business combination agreement of $45.5 million, nil, and nil, respectively, leaving net loss from operations as $50.7 million, $53.6 million and $10.9 million, respectively, which resulted substantially from R&D expenses and administrative expenses. For the years ended December 31, 2024 and 2025, we had an accumulated deficit of $700.8 million and $711.8 million, respectively.

Based on our evaluation of conditions and events as of December 31, 2025, management has determined that substantial doubt exists about the Company's ability to continue as a going concern. As of that date, we had cash and cash equivalents of $3.3 million, a history of recurring losses and negative shareholders' equity, and limited liquidity relative to our operating requirements. Although we implemented cost-reduction initiatives beginning in early 2024 and continuing through 2025, and expect liquidity support from financing activities and strategic partnerships, even after factoring in the expected receipt of the $2.3 million outstanding receivable balance of the upfront payment from LaunXP in Q2 2026, our existing cash resources are not sufficient to meet our obligations as they come due within the assessment period through April 30, 2027. Subsequent to year-end, our liquidity was further supported by a $2.0 million unsecured bridge loan provided by our Chairman and CEO, Mr. Hung-Wen (Howard) Chen, on March 30, 2026. Management's plans to address this shortfall include raising additional capital through equity or debt financing and generating cash inflows from strategic partnerships; however, these plans are not contractually committed, are subject to external factors and there can be no assurance that such capital will be available on acceptable terms, or at all. These conditions indicate the existence of material uncertainties that may cast substantial doubt on the Company's ability to continue as a going concern.

Notwithstanding these material uncertainties, the accompanying financial statements have been prepared on a going concern basis of accounting and do not include any adjustments to the carrying amounts and classification of assets and liabilities that may be necessary in the event that the Company is no longer able to continue its operations as a going concern.

The following table represents our cash and cash equivalents and highly liquid financial assets as of December 31, 2024 and as of December 31, 2025:

We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our preclinical studies and clinical trials, R&D programs or commercialization efforts. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into additional collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated preclinical studies and clinical trials. To the extent that we raise additional capital through additional collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we do raise additional capital through public or private equity or convertible debt offerings, the ownership interest of our existing shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our shareholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled Item 3.D. "Risk Factors-Risks Related to Our Business."

Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2023, 2024 and 2025:

Cash Flows Used in Operating Activities

Our cash flows from operating activities are significantly affected by the growth of our business, and are primarily related to R&D, and administrative expenses. Our operating cash flows are also affected by fluctuations in deposits, prepayments and other payable and accruals and other current assets and liabilities.

Net cash used in operating activities was $(43.2) million for the year ended December 31, 2023, resulting primarily from a net loss of $(172.6) million, adjusted for non-cash charges of $0.7 million in depreciation and amortization including depreciation of operating right-of-use of assets, $0.2 million in loss on disposal of fixed assets, $12.7 million in share-based payments, $76.4 million in negative fair value change of our convertible preferred shares, $45.5 million in IFRS 2 listing expenses, $(0.3) million in unrealized foreign currency loss, $0.1 million in finance costs, and partially offset by $(0.8) million in interest income, $(1.6) million in the fair value change of financial liabilities through FVTPL, and $3.6 million in working capital adjustments.

Net cash used in operating activities was $(28.7) million for the year ended December 31, 2024, resulting primarily from a net loss of $(53.9) million, adjusted for non-cash charges of $0.4 million in depreciation and amortization including depreciation of operating right-of-use of assets, $13.0 million in impairment loss on intangible assets, $10.9 million in share-based payments, partially offset by $(1.0) million in working capital adjustments.

Net cash used in operating activities was $(10.4) million for the year ended December 31, 2025, resulting primarily from a net loss of $(10.9) million, adjusted for non-cash charges of $0.3 million in depreciation and amortization including depreciation of operating right-of-use of assets, $1.7 million in impairment loss on intangible assets, $(1.0) million in share-based payments, partially offset by $0.4 million in working capital adjustments.

Cash Flows From Investing Activities

Net cash provided by investing activities was $21.4 million for the year ended December 31, 2023 resulting primarily from the proceeds from disposal of our financial assets held at fair value for $13.3 million, proceeds from redemption of our long term time deposits with original maturity over three months for $4.3 million, proceeds from redemption of our short term time deposits with original maturity over three months for $2.9 million, and interest received on such redemptions for $0.8 million, and proceeds from disposal of plant and equipment for $0.1 million.

Net cash provided by investing activities was $6.0 million for the year ended December 31, 2024 resulting primarily from the proceeds from disposal of our financial assets held at fair value for $5.8 million, and interest received on such financial assets for $0.2 million.

Net cash provided by investing activities was $0.2 million for the year ended December 31, 2025 resulting primarily from proceeds from disposal of plant and equipment for $0.1 million and interest received on such financial assets for $0.2 million.

Cash Flows From Financing Activities

Net cash provided by financing activities was $21.2 million for the year ended December 31, 2023 resulting primarily from the proceeds from the PIPE financing and business combination, net of transaction costs for $20.2 million, the proceeds from our bank loans of $4.2 million, and proceeds from the issuance of our Class A Ordinary Shares upon the exercise of share options, and partially offset by the payment of deferred underwriting fees for $(2.8) million, the repayment of our lease liabilities for $(0.4) million, and interest expense of $(0.1) million.

Net cash provided by financing activities was $0.5 million for the year ended December 31, 2024 resulting primarily from the proceeds from the PIPE financing in May 2024, net of transaction costs for $5.0 million and $0.7 million in proceeds from bank loans which was partially offset by the repayment of our bank loans of $(4.9) million, repayment of lease liabilities of $(0.2) million, and interest paid of $(0.2) million.

Net cash provided by financing activities was $3.7 million for the year ended December 31, 2025 resulting primarily from the proceeds from the PIPE financing in September 2025, net of transaction costs for $3.9 million which was partially offset by the repayment of lease liabilities of $(0.1) million, and interest paid of $(0.1) million.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of December 31, 2025, and the effects of such obligations are expected to have on our liquidity and cash flow in future periods (in thousands):

Lease Commitments

During the year ended December 31, 2025, we entered into new short-term lease agreements for the use of offices, and plant and equipment. As the lease terms had terms of 12 months or less, they were accounted for as short-term leases, and the related lease payments are recognized as an expense on a straight-line basis over the lease term.

Legal Commitments

During the year ended December 31, 2025, as previously disclosed, we entered a legal settlement to resolve litigation initiated by two minority investors. Under the terms of the agreement, the Company agreed to pay total cash consideration of $5.9 million. As of December 31, 2025, the Company made payments of $1.9 million, with the remainder classified as short term ($1.0 million) and long term ($3.0 million) based on the payment terms.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2024 or 2025.

Research and Development

We conduct our business operations through Apollomics U.S., at its headquarters in the United States, and through our wholly-owned subsidiaries in the PRC. These operating subsidiaries conduct R&D activities relating to the biologics of oncology, to facilitate the discovery and development of product candidates and expand our global presence. While we have in-house clinical operations teams in the United States and in the PRC, we have worked with and plan to continue to work with third-party CROs to monitor and manage data for our ongoing preclinical and clinical programs.

Development costs incurred on our R&D projects are capitalized and deferred only when we can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, our intention to complete and our ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the pipeline and the ability to measure reliably the expenditure during the development. Development costs which do not meet these criteria are expensed when incurred.

We assess the progress of each of the R&D projects and determine whether the criteria are met for capitalization. For all periods presented, all the related development costs are expensed when incurred.

Intellectual Property

Intellectual property rights are important to the success of our business. Our future commercial success depends, in part, on our ability to obtain and maintain patent and other intellectual property and proprietary protections for commercially important technologies, inventions and know-how related to our business, defend and enforce our patents, preserve the confidentiality of our trade secrets, and operate without infringing, misappropriating or otherwise violating the valid, enforceable intellectual property rights of third parties. As of December 31, 2025, we owned a total of 65 granted or issued patents and 24 pending patent applications, including one pending PCT applications, relating to our drug candidates and technologies.

Macroeconomic Factors

Global economic challenges have contributed to rising inflation, significant increases in fuel costs, supply-chain disruptions, adverse labor market conditions, and increased difficulty with raising capital for unprofitable companies. For example, the war in Ukraine and Iran has had a global impact on the supply and price of fuel and has contributed to increased inflation around the world.

Regulatory Concerns

We operate in an industry that is subject to extensive regulations, which have become more stringent over time. See also Item 4.B. "Business Overview-Government Regulations."

Our operating and financial review and prospects is based on our consolidated financial statements, which have been prepared in accordance with accounting policies that conform with International Financial Reporting Standards as issued by the International Accounting Standards Board. In the application of our accounting policies, we are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Our actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Please refer to note 5 to our audited consolidated financial statements included elsewhere in this Annual Report for more details about our material accounting policies and critical judgment and key estimates.

Legal Proceedings and Commitments

For details regarding our ongoing legal proceedings, see Item 8.A. "Consolidated Statements and Other Financial Information-Legal and Arbitration Proceedings".

Emerging Growth Company

As defined in Section 102(b)(1) of the JOBS Act (the "JOBS Act"), we are an emerging growth company ("EGC"). As such, we will be eligible for and intends to rely on certain exemptions and reduced reporting requirements provided by the JOBS Act, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

We will remain an EGC under the JOBS Act until the earliest of (i) the last day of the fiscal year in which the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the last business day of the second quarter of that fiscal year, (ii) the last day of the fiscal year in which it has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which it was issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the Closing.