UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of September
Commission File Number:
(Translation of registrant’s name into English)
Telephone: (650) 209-4055
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
On September 28, 2023, Apollomics Inc. (the “Company”) issued unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023 and management’s discussion and analysis of financial condition and results of operations (the “MD&A”) for the six months ended June 30, 2023. A copy of such unaudited condensed consolidated interim financial statements is attached hereto as Exhibit 99.1. A copy of the MD&A is attached hereto as Exhibit 99.2.
On September 28, 2023, the Company issued a press release in which the Company reported its financial results for the six months ended June 30, 2023. A copy of such press release is furnished as Exhibit 99.3 hereto.
The information furnished in Exhibit 99.1 and Exhibit 99.2 to this Report of Foreign Private Issuer on Form 6-K (this “Report”) shall be deemed to be filed with the Securities and Exchange Commission and incorporated by reference into the Company’s registration statements on Form S-8 (File No. 333-272559) and Form F-1 (File No. 333-272552), and any related prospectuses, as such registration statements and prospectuses may be amended from time to time, and to be a part thereof from the date on which this Report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.
APPLICATION OF HOME COUNTRY PRACTICE RULES
The Company is a “foreign private issuer” (as such term is defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and the Company’s ordinary shares are listed on the Nasdaq Capital Market. As a foreign private issuer, the Company is permitted under Nasdaq rules to follow home country governance practices instead of certain Nasdaq requirements pursuant to Nasdaq Rule 5615(a)(3). As disclosed in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission on April 28, 2023, the Company follows home country corporate governance practices instead of certain Nasdaq corporate governance requirements, as described in more detail therein. The Company has also informed Nasdaq that it intends to follow home country governance practices in lieu of shareholder approval requirements in Nasdaq Rule 5635, and that it will disclose in its annual report on Form 20-F for the fiscal year ended December 31, 2023 each requirement that it does not follow and describe the home country practices it follows in lieu of such requirements
EXHIBIT INDEX
Exhibit No. |
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Description |
99.1 |
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99.2 |
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99.3 |
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101 |
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Interactive Data File (formatted as Inline XBRL) |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Apollomics Inc. |
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Date: September 28, 2023 |
By: |
/s/ Guo-Liang Yu |
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Name |
Guo-Liang Yu, Ph.D. |
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Title: |
Chief Executive Officer |
Exhibit 99.1
INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 |
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2 |
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3 |
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4 |
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Notes to Condensed Consolidated Interim Financial Statements (Unaudited) |
5 |
APOLLOMICS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(All amounts in thousands of US$)
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NOTES |
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As of June 30, 2023 |
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As of December 31, 2022 |
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US$ |
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US$ |
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Non-current assets |
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Plant and equipment, net |
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13 |
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Right-of-use assets |
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14 |
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Intangible assets |
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15 |
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Rental deposits |
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Time deposits with maturity greater than twelve months |
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18 |
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— |
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Total non-current assets |
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Current assets |
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Deposits, prepayments and deferred expenses |
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16 |
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Financial assets at fair value through profit and loss ("FVTPL") |
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24 |
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Time deposits with maturity less than twelve months |
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18 |
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Cash and cash equivalents |
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Total current assets |
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Total assets |
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Current liabilities |
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Other payables and accruals |
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19 |
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Accounts payable |
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— |
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Financial liabilities arising from unvested restricted shares |
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20 |
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— |
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Lease liabilities |
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Total current liabilities |
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Net current assets |
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Total assets less current liabilities |
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Non-current liabilities |
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Lease liabilities |
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Warrant liabilities at FVTPL |
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24 |
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|
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— |
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Convertible preferred shares |
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21 |
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— |
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Total non-current liabilities |
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||
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Net assets (liabilities) |
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( |
) |
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Equity |
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Share capital |
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22 |
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— |
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Apollomics class A ordinary shares |
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— |
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Apollomics class B ordinary shares |
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— |
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Treasury shares |
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22 |
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— |
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( |
) |
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Share premium |
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Reserves |
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Accumulated losses |
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( |
) |
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( |
) |
Total equity (deficit) |
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( |
) |
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The accompanying notes are an integral part of these unaudited consolidated interim financial statements.
1
APOLLOMICS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (UNAUDITED)
(All amounts in thousands of US$, except for per share data)
|
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Six Months Ended June 30, |
|
|||||
|
|
NOTES |
|
2023 |
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2022 |
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||
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US$ |
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US$ |
|
||
Other income |
|
7 |
|
|
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|
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|
||
Foreign exchange losses |
|
8 |
|
|
( |
) |
|
|
( |
) |
Fair value change of financial assets at FVTPL |
|
17 |
|
|
|
|
|
|
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Fair value change of financial liabilities at FVTPL |
|
24 |
|
|
|
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— |
|
||
Fair value change of convertible preferred shares |
|
24 |
|
|
( |
) |
|
|
|
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Research and development expenses |
|
|
|
|
( |
) |
|
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( |
) |
Administrative expenses |
|
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( |
) |
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( |
) |
Finance costs |
|
|
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( |
) |
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|
( |
) |
Other expense |
|
10 |
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|
( |
) |
|
|
( |
) |
Loss before taxation |
|
|
|
|
( |
) |
|
|
( |
) |
Income tax expenses |
|
9 |
|
|
( |
) |
|
|
( |
) |
Loss and total comprehensive loss for the period, net of taxation, |
|
10 |
|
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( |
) |
|
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( |
) |
Loss per share |
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|
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|
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||
Basic loss per common share (US$) |
|
12 |
|
|
( |
) |
|
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( |
) |
Diluted loss per common share (US$) |
|
12 |
|
|
( |
) |
|
|
( |
) |
Weighted average number of common shares outstanding - Basic ('000) |
|
12 |
|
|
|
|
|
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||
Weighted average number of common shares outstanding - Diluted ('000) |
|
12 |
|
|
|
|
|
|
||
The accompanying notes are an integral part of these unaudited consolidated interim financial statements.
2
APOLLOMICS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
(All amounts in thousands of US$, except for share and per share data)
|
|
Share capital |
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Treasury Shares |
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Reserves |
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||||||||||||||||||
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Share-based |
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|||||||||
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Number of |
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Amount |
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Number of |
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Amount |
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Share |
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Other |
|
|
payment |
|
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Accumulated |
|
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Total |
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|||||||||
|
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|
US$ |
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|
US$ |
|
|
US$ |
|
|
US$ |
|
|
US$ |
|
|
US$ |
|
|
US$ |
|
|||||||||
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(note) |
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|||||||||
As of January 1, 2022 |
|
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( |
) |
|
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|
|
|
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|
|
|
|
( |
) |
|
|
( |
) |
||||||
Recapitalization of Apollomics at Exchange Ratio |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Adjusted Balances, beginning of period |
|
|
|
|
|
|
|
|
|
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|
( |
) |
|
|
|
|
|
|
|
|
|
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|
( |
) |
|
|
( |
) |
||||||
Loss and total comprehensive loss for the period |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|||||||
Exercise of share options (Note 23) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
— |
|
|
|
|
||||||||
Forfeiture of vested share options (Note 23) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
( |
) |
|
|
|
|
— |
|
||||||||
Restricted share awards vested (Notes 22 and 23) |
|
— |
|
|
— |
|
|
|
( |
) |
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
— |
|
|
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|
|||||||
Early exercised share options vested during the period (Notes 22 and 23) |
|
— |
|
|
— |
|
|
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( |
) |
|
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|
|
— |
|
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|
( |
) |
|
— |
|
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|
|||||||
Recognition of equity-settled share-based payment (Note 23) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
— |
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|
|||||||||
As of June 30, 2022 |
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( |
) |
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( |
) |
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( |
) |
||||||
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|||||||||
As of January 1, 2023 |
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( |
) |
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( |
) |
|
|
( |
) |
||||||
Recapitalization of Apollomics at Exchange Ratio |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Adjusted Balances, beginning of period |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
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|
( |
) |
|
|
( |
) |
||||||
Loss and total comprehensive loss for the period |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|||||||
Forfeiture of vested share options (Note 23) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
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( |
) |
|
|
|
|
|
— |
|
|||||||
Exercise of share options (Note 23) 1 |
|
|
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|
— |
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— |
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— |
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|
|
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( |
) |
|
— |
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|||||||
Restricted share awards vested (Notes 22 and 23) 2 |
|
— |
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— |
|
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( |
) |
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— |
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( |
) |
|
— |
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|||||||
Business combination, net of redemptions (Note 5) |
|
|
|
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— |
|
|
— |
|
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— |
|
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|
|
— |
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— |
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— |
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|||||||||
Conversion of pre-closing Apollomics convertible preferred shares |
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— |
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— |
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— |
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— |
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— |
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|||||||||
IFRS 2 listing expense (Note 5) |
|
— |
|
|
— |
|
|
— |
|
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— |
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|
— |
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— |
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— |
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|||||||||
Post-closing Apollomics Class B Ordinary Shares issued to PIPE |
|
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— |
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|
— |
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— |
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|
— |
|
|
— |
|
|
— |
|
|
|
|
|||||||||
Reclassification from equity to non-current liabilities for Maxpro |
|
— |
|
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— |
|
|
— |
|
|
— |
|
|
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( |
) |
|
— |
|
|
— |
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|
— |
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( |
) |
|||||||
Issuance of post-closing Apollomics Class A ordinary shares |
|
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|
— |
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|||||||||
Recognition of equity-settled share-based payment (Note 23) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|||||||||
As of June 30, 2023 |
|
|
|
|
|
|
|
— |
|
|
— |
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|
|
|
|
|
|
|
|
|
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( |
) |
|
|
|
||||||||
Note: Other reserve included amounts transferred from share-based payment reserve when the share options are exercised or the restricted shares are vested.
1
2
3
The accompanying notes are an integral part of these unaudited consolidated interim financial statements.
3
APOLLOMICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(All amounts in thousands of US$)
|
|
For the six month ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
|
|
US$ |
|
|
US$ |
|
||
OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Loss before taxation |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments for: |
|
|
|
|
|
|
||
Interest income |
|
|
( |
) |
|
|
( |
) |
Depreciation of plant and equipment |
|
|
|
|
|
|
||
Depreciation of right-of-use assets |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Realized foreign currency (gains) losses |
|
|
( |
) |
|
|
|
|
Fair value change of financial assets at FVTPL |
|
|
( |
) |
|
|
( |
) |
Fair value change of financial liabilities at FVTPL |
|
|
( |
) |
|
|
— |
|
Fair value change of preferred shares |
|
|
|
|
|
( |
) |
|
IFRS 2 listing expense |
|
|
|
|
|
— |
|
|
Finance costs |
|
|
— |
|
|
|
|
|
Share-based payment expenses |
|
|
|
|
|
|
||
Unrealized foreign currency loss |
|
|
|
|
|
|
||
Operating cash flows before movements in working capital |
|
|
( |
) |
|
|
( |
) |
(Increase) decrease in deposits, prepayments and deferred expenses |
|
|
( |
) |
|
|
|
|
Increase in accounts payable and accrued offering costs |
|
|
|
|
|
— |
|
|
Increase (decrease) in other payables and accruals |
|
|
( |
) |
|
|
|
|
NET CASH USED IN OPERATION |
|
|
( |
) |
|
|
( |
) |
Taxation refund |
|
|
— |
|
|
|
|
|
Taxation paid |
|
|
( |
) |
|
|
( |
) |
NET CASH USED IN OPERATING ACTIVITIES |
|
|
( |
) |
|
|
( |
) |
INVESTING ACTIVITIES |
|
|
|
|
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|
||
Interest received |
|
|
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|
||
Proceeds from redemption of time deposits |
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|
||
Placement of time deposits |
|
|
( |
) |
|
|
— |
|
Purchase of plant and equipment |
|
|
( |
) |
|
|
( |
) |
Placement of FVTPL |
|
|
( |
) |
|
|
— |
|
Payment for rental deposits |
|
|
— |
|
|
|
( |
) |
Refund of rental deposits |
|
|
|
|
|
— |
|
|
NET CASH (USED IN) FROM INVESTING ACTIVITIES |
|
|
( |
) |
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from PIPE Financing and Business Combination, net of transaction costs |
|
|
|
|
|
— |
|
|
Payment of deferred underwriting fees |
|
|
( |
) |
|
|
— |
|
Proceeds from issue of shares upon exercise of share options |
|
|
|
|
|
|
||
Interest paid |
|
|
( |
) |
|
|
( |
) |
Repayment of lease liabilities |
|
|
( |
) |
|
|
( |
) |
NET CASH (USED IN) FROM FINANCING ACTIVITIES |
|
|
|
|
|
( |
) |
|
Effects of Exchange Rate Changes on Cash and Cash Equivalents |
|
|
|
|
|
— |
|
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
( |
) |
|
|
|
|
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
|
$ |
|
|
$ |
|
||
NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Restricted share awards vested |
|
$ |
|
|
$ |
|
||
Accrued transaction costs |
|
|
|
|
|
— |
|
|
Conversion of pre-closing Apollomics convertible preferred shares into Post-Closing Apollomics Ordinary Shares |
|
|
|
|
|
— |
|
|
Initial value of warrant liabilities arising from Maxpro note conversion and PIPE Financing in connection with the Closing Date of the Business Combination |
|
|
|
|
|
— |
|
|
Reclassification from equity to non-current liabilities for Maxpro Warrants assumed by Apollomics upon Closing |
|
|
|
|
|
— |
|
|
The accompanying notes are an integral part of these unaudited consolidated interim financial statements.
4
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
Apollomics Inc. ("Apollomics" or the "Company") is a clinical-stage biotechnology company focused on discovering and developing oncology therapies to address unmet medical needs. Since the Company’s founding in 2015, the Company has built a pipeline of nine drug candidates across 11 programs that focus on oncology, of which six drug candidates are in the clinical stage.
The Company was originally formed as CB Therapeutics Inc. as a result of a spin-off of Crown Bioscience International, which was completed on December 31, 2015. Prior to December 2015, Crown Bioscience International, through its subsidiaries, was the owner of certain patent rights relating to certain of these drug candidates. In order to focus on its core business, namely providing preclinical contract research organization services, and allow the drug discovery and development related business to be operated and financed separately, Crown Bioscience International spun off its Taiwan subsidiary, Crown Bioscience (Taiwan), and contributed it to the Company. As a result, we became the owner of these patent rights.
In addition to its U.S. headquarters, the Company also has locations in Australia (Apollomics (Australia) Pty Ltd, formed in November 2016), Hong Kong (Apollomics (Hong Kong) Limited, formed in June 2019) and China (Zhejiang Crownmab Biotech Co. Ltd. and Zhejiang Crown Bochuang Biopharma Co. Ltd., formed in May 2018 and May 2020, respectively). The Company’s headquarters and global drug development team is based in the United States (San Francisco Bay area), while its discovery and China drug development team is based in China (Hangzhou and Shanghai). The Company operates in both the United States and China, with its headquarters and its global drug development team in the San Francisco Bay Area and its discovery and China drug development team in Hangzhou and Shanghai, China.
On March 29, 2023 ( “Closing Date”), Apollomics consummated a business combination (the “Business Combination”) with Maxpro Capital Acquisition Corp. (“Maxpro”), a Delaware corporation and special purpose acquisition company, pursuant to the initial business combination agreement dated September 14, 2022 and subsequent amendment to the business combination agreement dated February 9, 2023 (the “Business Combination Agreement” or “BCA”). In connection with the closing of the Business Combination, Apollomics became a publicly traded company on the Nasdaq Capital Market (“Nasdaq”). The Company’s Class A ordinary shares and warrants are listed on Nasdaq under the trading symbols “APLM” and “APLMW,” respectively. Trading on the Nasdaq commenced on March 30, 2023.
Notwithstanding the foregoing, we believe our cash on hand, without regard to any such cash proceeds we may receive upon the exercise for cash of our warrants, is sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. While we have outstanding warrants, which may provide an additional source of cash upon exercise, for so long as the warrants remain “out-of-the money,” we do not expect warrant holders to exercise their warrants and, therefore, we do not expect to receive cash proceeds from any such exercise. If and to the extent we determine to raise additional capital in the future, there can be no assurance that such additional capital would be available on attractive terms, if at all.
The unaudited condensed consolidated financial statements are presented in U.S. dollars ("US$"). The Company's subsidiaries included in the unaudited condensed consolidated financial statements are listed below (the Company and its subsidiaries are collectively referred to herein as the “Group”). These unaudited condensed consolidated interim financial statements have been prepared based on the accounting policies which conform with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared under the assumption the Company operates on a going concern basis.
Name of subsidiaries |
|
Place of incorporation or establishment/operation and date of incorporation/ establishment |
|
Principal activities |
|
|
|||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
5
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 ("IAS 34") "Interim Financial Reporting" issued by the IASB as well as the rules and regulations of the U.S. Securities and Exchange Commission, and have been prepared under the assumption the Company operates on a going concern basis.
The unaudited condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values.
Other than additional accounting policies resulting from application of amendments to IFRSs, the accounting policies and methods of computation used in the unaudited condensed consolidated financial statements for the six months ended June 30, 2022 and 2023 are the same as those presented in the Group's annual financial statements for the year ended December 31, 2022.
Application of amendments to IFRSs
For the purposes of preparing and presenting the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, the Group has applied the following amendments to IFRSs issued by the IASB, for the first time, which are mandatorily effective for the Group's annual period beginning on January 1, 2023:
Amendments to IFRS 3 |
Reference to the Conceptual Framework |
Amendments to IAS 16 |
Property, Plant and Equipment: Proceeds before Intended Use |
Amendments to IFRS Standards |
Annual Improvements to IFRS Standards 2018 — 2020 |
The application of the amendments to IFRSs in the current interim period has had no material impact on the Group's financial position and performance for the current and prior periods and/or on the disclosures set out in these unaudited condensed consolidated financial statements.
The preparation of the unaudited condensed consolidated financial statements requires the management of the Company to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
In preparing these unaudited condensed consolidated financial statements, the critical judgments made by the management of the Company in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2022.
As previously outlined in Note 1 – General Information, the Company underwent a Business Combination with Maxpro on March 29, 2023. The Business Combination was effected through the issuance of shares of Apollomics to Maxpro stockholders.
Upon the closing of the Business Combination, the following occurred:
6
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The net proceeds from the PIPE Financing and Business Combination, totaled $
7
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The following table presents the total Apollomics common stock outstanding immediately after the closing of the Business Combination:
|
Number of Shares |
|
|
Exchange of Maxpro Class A common stock for post-closing Apollomics Class A ordinary shares |
|
|
|
Exchange of Maxpro Class B common stock for post-closing Apollomics Class A ordinary shares |
|
|
|
Exchange of Maxpro Class A common stock subject to possible redemption that was not redeemed for post-closing Apollomics Class A ordinary shares |
|
|
|
Issuance of post-closing Apollomics Class A ordinary shares to Maxpro Sponsor in connection with conversion of a convertible promissory note |
|
|
|
Subtotal - Business Combination, net of redemptions |
|
|
|
Issuance of post-closing Apollomics Class B ordinary shares to PIPE Investors |
|
|
|
Conversion of pre-closing Apollomics convertible preferred shares (converted into pre-closing Apollomics ordinary shares prior to the Business Combination) into Post-Closing Apollomics Ordinary Shares |
|
|
|
Issuance of Post-Closing Apollomics Ordinary Shares in connection with the Business Combination due to exercise of pre-closing Apollomics stock options prior to the Business Combination |
|
|
|
Total - Post-Closing Apollomics Ordinary Shares outstanding as a result of Business Combination, PIPE Financing, conversion of pre-closing Apollomics convertible preferred shares into Post-Closing Apollomics Ordinary Shares, and issuance of shares upon Closing due to pre-Closing exercise of stock options (note i) |
|
|
|
Note i: In addition to the
As Maxpro did not meet the definition of a business in accordance with IFRS 3 (“Business Combinations”), the transaction was accounted for within the scope of IFRS 2 (“Share-based Payment”) as a share-based payment transaction in exchange for a public listing service. As such, the fair value of Apollomics shares transferred to Maxpro stockholders in excess of the net identifiable assets of Maxpro represents compensation for the service of a stock exchange listing for its shares and is accounted for as an expense in post-closing Apollomics at the consummation of the Business Combination. The net identifiable assets of Maxpro were stated at historical cost, with no goodwill or other intangible assets recorded. Apollomics was deemed to be both the legal and accounting acquirer given that subsequent to the Business Combination:
Under IFRS 2, Apollomics recorded a one-time share-based expense of US$
Cash and cash equivalents |
|
|
|
Notes payable - sponsor |
|
( |
) |
Accrued liabilities |
|
( |
) |
Deferred underwriting compensation |
|
( |
) |
Total Maxpro identifiable net liabilities at fair value |
|
( |
) |
8
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The net assets of Maxpro are stated at fair value with
|
Per Share Value |
|
|
Shares |
|
|
Fair Value |
|
|||
|
(at March 29, 2023) |
|
|
(in thousands) |
|
|
(in thousands) |
|
|||
Maxpro public stockholders |
$ |
|
|
|
|
|
$ |
|
|||
Sponsor parties |
|
|
|
|
|
|
|
|
|||
Underwriter shares |
|
|
|
|
|
|
|
|
|||
Maxpro private warrants |
|
|
|
|
|
|
|
|
|||
Maxpro public warrants |
|
|
|
|
|
|
|
|
|||
Redemptions of Maxpro class A common stock |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
Net liabilities of Maxpro |
|
|
|
|
|
|
|
( |
) |
||
IFRS 2 Listing Expense |
|
|
|
|
|
|
$ |
|
|||
Revenue
The Group has
Segment information
Operating segments are defined as components of an entity for which separate financial information is made available and is regularly evaluated by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company’s CODM is its Chief Executive Officer (“CEO”), and operations are managed as a single segment for the purposes of assessing performance and making operating decisions. The CODM reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one operating and reportable segment and no further analysis of this single segment is presented.
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
Interest income |
|
|
|
|
|
|
||
Government grants (note i) |
|
— |
|
|
|
|
||
Other income |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Note i: Included in the government grants are amounts in thousands of Australian Dollar ("AUD")
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
Foreign exchange loss, net |
|
|
( |
) |
|
|
( |
) |
The Company primarily operates in the U.S., PRC, and Australia, with most of the transactions settled in the U.S. dollar. The Company's presentation and functional currency is the U.S. dollar. Certain bank balances, deposits and other payables are denominated in Renminbi and Australian dollar, which exposes the Company to foreign currency risk.
The Company incurs portions of its expenses in currencies other than the U.S. dollar, in particular, the Renminbi and Australian dollar. As a result, the Company is exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. The Company has not entered into any derivative contracts to hedge against its exposure to currency risk during the six months ended June 30, 2022 or 2023. However, Management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.
9
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
US Corporate Income Tax ("CIT") — current year |
|
|
|
|
|
|
||
Other than the subsidiary operating in the US, no provision for income taxation has been made as the Company and the other subsidiaries had incurred tax losses in the PRC, Australia and Hong Kong for the six months ended June 30, 2022 and 2023. Tax expense of $
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
Loss for the period has been arrived at after charging: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Staff costs: |
|
|
|
|
|
|
||
Salaries and other allowances |
|
|
|
|
|
|
||
Retirement benefits scheme contributions |
|
|
|
|
|
|
||
Share-based payment expenses |
|
|
|
|
|
|
||
Total staff costs |
|
|
|
|
|
|
||
Depreciation of plant and equipment |
|
|
|
|
|
|
||
Depreciation of right-of-use assets |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Other expense (note i) |
|
|
|
|
|
|
||
Note i: Other expenses include expenses incurred for an initial public offering application in Hong Kong which was suspended in 2022. For the six months ended June 30, 2022 and 2023, the other expense also include expenses incurred in connection with the Business Combination. Refer to Note 5 – Business Combination for further information.
10
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The calculations of the basic and diluted loss per share are based on the following data:
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
(In thousands of US$, except per share data) |
|
US$ |
|
|
US$ |
|
||
Loss: |
|
|
|
|
|
|
||
Loss for the period attributable to owners of the Company for the purpose of |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Effect of dilutive potential ordinary shares: |
|
|
|
|
|
|
||
Gain on fair value change of Series C convertible preferred shares |
|
— |
|
|
|
( |
) |
|
Loss for the period attributable to owners of the Company for the purpose of |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
(In thousands, except per share data in US$) |
|
|
|
|
|
|
||
Number of shares: |
|
|
|
|
|
|
||
Weighted average number of ordinary shares for the purpose of calculating |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Effect of dilutive potential ordinary share: |
|
|
|
|
|
|
||
Series C convertible preferred shares ('000) |
|
— |
|
|
|
|
||
Weighted average number of ordinary shares for the purpose of calculating |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic loss per common share |
|
|
( |
) |
|
|
( |
) |
Diluted loss per common share |
|
|
( |
) |
|
|
( |
) |
Weighted average number of common shares outstanding - Basic ('000) |
|
|
|
|
|
|
||
Weighted average number of common shares outstanding - Diluted ('000) |
|
|
|
|
|
|
||
The diluted loss per share for the six months ended June 30, 2022 and 2023 does not include the effect of the following instruments held as of June 30, 2022 and 2023 as their inclusion would be anti-dilutive:
|
|
As of June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
|
|
|
|
|
(note i) |
|
||
Number of series A1 convertible preferred shares ("Series A1 Preferred Shares") |
|
— |
|
|
|
|
||
Number of series A2 convertible preferred shares ("Series A2 Preferred Shares") |
|
— |
|
|
|
|
||
Number of series B convertible preferred shares ("Series B Preferred Shares") |
|
— |
|
|
|
|
||
Number of series C convertible preferred shares ("Series C Preferred Shares") |
|
— |
|
|
* |
|
||
Unvested restricted shares |
|
— |
|
|
|
|
||
Share options |
|
|
|
|
|
|
||
Apollomics Private Warrants |
|
|
|
|
— |
|
||
Apollomics Public Warrants |
|
|
|
|
— |
|
||
Penny Warrants |
|
|
|
|
— |
|
||
Note i: The Exchange Ratio has been applied to these instruments to give effect to the Business Combination.
Note *: Series C Preferred Shares as of June 30, 2022 were dilutive potential ordinary shares and included in the calculation of the diluted loss per share for the six months ended June 30, 2022.
The Group acquired US$
11
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
Lease agreements are entered into for fixed lease terms of
Intangible assets with finite useful lives that are acquired separately are carried at costs less accumulated amortization and any accumulated impairment losses if any. Amortization for intangible assets with finite useful lives is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets not yet available for use that are acquired separately are carried at cost less any subsequent accumulated impairment losses.
As of December 31, 2022, the Company’s intangibles had a total cost of US$
|
|
As of June 30, 2023 |
|
|
As of December 31, 2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
Deferred directors and officers insurance expenses |
|
|
|
|
— |
|
||
Other prepayments |
|
|
|
|
|
|
||
Value-Added Tax recoverable |
|
|
|
|
|
|
||
Payment in advance to suppliers |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
— |
|
||
|
|
|
|
|
|
|
||
The financial assets at FVTPL represents investment in a market fund in the US, which solely holds investments in the US treasury bonds. Details of fair value measurement are set out in Note 24.
The time deposits are placed with licensed commercial banks in the PRC, carry interest at a fixed rate of
Bank balances carry interest at prevailing market interest rates ranging from
12
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
|
|
As of June 30, 2023 |
|
|
As of December 31, 2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
Payables in respect of research and development expenses |
|
|
|
|
|
|
||
Accrued salaries and bonuses |
|
|
|
|
|
|
||
Accrued other expenses |
|
|
|
|
|
|
||
Accrued directors and officers insurance expenses |
|
|
|
|
— |
|
||
Deposit received for a potential out-licensing drug patent (note i) |
|
|
|
|
|
|
||
Other payables |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Note i: During the year ended December 31, 2020, the Group signed an exclusive right of negotiation agreement with an independent third party (the "Independent Third Party") to negotiate out-licensing a drug patent to the Independent Third Party. Under the exclusive right of negotiation agreement, the Group had received a deposit of US$
|
|
As of June 30, 2023 |
|
As of December 31, 2022 |
|
|
(In thousands of US$) |
|
US$ |
|
US$ |
|
|
Payables in respect of unvested restricted shares attributable to: |
|
|
|
|
|
|
Dr. Yu (the chief executive of the Company) |
|
— |
|
|
|
|
As of December 31, 2022, the liability represented the repurchase option held by the Company in relation to (i) the unvested restricted shares granted to a director of the Company; and (ii) the unvested restricted shares issued to a director of the Company who as the share option holder had elected to early exercise the share options during the vesting period. The liability does not exist as of June 30, 2023 as the restricted shares, held by the director of the Company, became fully vested upon the closing of the Business Combination on March 29, 2023.
From 2016 through 2020, the Company issued convertible Series A1, Series A2, Series B and Series C preferred shares (the “Preferred Shares”) to several independent investors. The details of such issuances and the key terms of the Preferred Shares are presented in the Group's consolidated financial statements for the years ended December 31, 2021 and 2022. Following the Business Combination on March 29, 2023, none of those Series A1, Series A2, Series B and Series C preferred shares remain outstanding as these were all converted into common stock.
In connection with the Business Combination on March 29, 2023
As of June 30, 2023, the Company has
13
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
Presentation and Classification
The Company accounted for the convertible Series A1, Series A2, Series B, and Series C preferred shares as financial liabilities at FVTPL, per IAS standards. The fair value change of the Preferred Shares is charged/credited to fair value change of Preferred Shares in profit or loss except for the portion attributable to credit risk change which shall be charged/credited to other comprehensive income, if any. The fair value change recognized in profit or loss includes any interest paid, if any, on the financial liabilities. The management of the Company considered that there is insignificant credit risk change on the financial liabilities that drives the fair value change of the Preferred Shares during the six months ended June 30, 2022 and 2023.
The movement of the Preferred Shares at end of each reporting period is as follows:
|
|
Preferred shares |
|
|
(In thousands of US$) |
|
US$ |
|
|
As of January 1, 2022 |
|
|
|
|
Change in fair value |
|
|
( |
) |
As of June 30, 2022 |
|
|
|
|
|
|
|
|
|
As of January 1, 2023 |
|
|
|
|
Change in fair value |
|
|
|
|
Conversion to common stock |
|
|
( |
) |
As of June 30, 2023 |
|
— |
|
|
The Preferred Shares were valued by the management of the Company with reference to valuations carried out by an independent qualified professional valuer not connected with the Group, which has appropriate qualifications and experience in the valuation of similar instruments.
The Company used the Black-Scholes model to determine the underlying share value of the Company and performed an equity allocation based on option pricing model (the "OPM" model) to arrive the fair value of the Preferred Shares at the end of each reporting period.
In addition to the underlying share value of the Company determined by Black-Scholes model, other key valuation assumptions used in OPM model to determine the fair value of the Preferred Shares are as follows:
|
|
As of June 30, 2023 |
|
As of December 31, 2022 |
|
|
|
|
(note i) |
|
|
|
|
Time to liquidation |
|
N/A |
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|
||
Risk-free rate |
|
N/A |
|
|
% |
|
Expected volatility (note ii) |
|
N/A |
|
|
% |
|
Dividend yield |
|
N/A |
|
|
% |
|
Possibility under IPO scenario |
|
N/A |
|
|
% |
|
Possibility under liquidation scenario |
|
N/A |
|
|
% |
|
Note i: As of June 30, 2023 the Company had
Note ii: The expected volatility measured at the standard deviation is based on the historical data of the daily share price movement of comparable companies.
14
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
Share capital
The share capital as of January 1, 2023 and June 30, 2023 represented the issued ordinary share capital of the Company.
|
|
NOTES |
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Number of |
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Par value |
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Amount |
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|||
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US$ |
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In thousands of US$ |
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Authorized: |
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As of January 1, 2022, and June 30, 2022 and |
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As of June 30, 2023 |
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(i) |
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Issued and fully paid: |
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As of January 1, 2022 |
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|||
Exercise of share options |
|
(ii) |
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|
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As of June 30, 2022 |
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As of June 30, 2022, restated by applying the exchange |
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As of January 1, 2023 |
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As of January 1, 2023, restated by applying the |
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|||
Class B ordinary shares issued to holders of the |
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|
|||
Class A ordinary shares issued in connection to the |
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— |
|
|||
Class A ordinary shares issued to the Series A |
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— |
|
|||
Class B ordinary shares issued to PIPE investors |
|
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|
|
|
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— |
|
|||
Exercise of share options |
|
(iii) |
|
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|
|
|
|
|
— |
|
|||
As of June 30, 2023 |
|
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|
|||
Note i: Pursuant to the Apollomics’ sixth amended and restated memorandum and articles of association (the “MAA”) the authorized share capital of Apollomics is
Note ii: During the six months ended June 30, 2022, share option holders exercised their rights to subscribe for
Note iii: During the six months ended June 30, 2023, share option holders exercised their rights to subscribe for
All the ordinary shares issued during the six months ended June 30, 2022 and 2023 rank pari passu with the existing shares in all respects.
On March 29, 2023, the Company’s Class A ordinary shares and warrants are listed on Nasdaq under the trading symbols “APLM” and “APLMW,” respectively. Pursuant to the Apollomics’ sixth amended and restated memorandum and articles of association (the “MAA”) the authorized share capital of Apollomics is
15
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
Treasury shares
|
|
Number of |
|
|
Subscription |
|
|
Amount |
|
|||
|
|
|
|
|
US$ |
|
|
In thousands of US$ |
|
|||
As of January 1, 2022 |
|
|
|
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|
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|
|||
Restricted shares vested |
|
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( |
) |
|
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( |
) |
|
Early exercised share options vested during the period |
|
|
( |
) |
|
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( |
) |
|
As of June 30, 2022 |
|
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As of January 1, 2023 |
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|
|||
Restricted shares vested |
|
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( |
) |
|
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( |
) |
|
As of June 30, 2023 |
|
— |
|
|
|
|
|
— |
|
|||
Treasury shares represented unvested restricted shares granted to the director of the Company and the unvested restricted shares issued upon the early exercise of share options as elected by the director of the Company.
On July 19, 2016, the shareholders of the Company approved the adoption of the 2016 equity incentive plans (the "2016 Plan") for the purpose to secure and retain employees, directors and consultants of the Company (the "Eligible Persons"), provide incentives for them to exert maximum efforts for the success of the Company and any affiliate and provide means by which the Eligible Persons may benefit from increases in value of the ordinary shares of the Company.
The 2016 Plan provides for the grant of the following types of share awards: (i) restricted share awards, (ii) share options, (iii) share appreciation rights, (iv) restricted share unit awards, and (v) other share awards. The overall limit on the number of underlying shares which may be delivered pursuant to all awards granted under the 2016 Plan is
In connection with the Business Combination, immediately prior to the closing, the Board terminated the 2016 Equity Incentive Plan, and the Board adopted the Apollomics Inc. 2023 Incentive Award Plan (the “Incentive Plan”), which became effective as of the closing, and
During the six months ended June 30, 2022 and 2023, the Company had issued restricted share awards and share options to the Eligible Persons and
16
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
Restricted share awards
All the restricted shares shall be subject to repurchase at the option by the Company at the subscription price paid by Eligible Persons upon voluntary or involuntary termination of his employment with the Company (the "Repurchase Option").
The Repurchase Option shall be exercised by the Company and/or the designees of the Company as to the number of unreleased shares, within
The aforesaid arrangement has been accounted for as share-based payment transactions. Accordingly, the Group measured the fair value of the unvested restricted shares as of the grant date and is recognizing the amount as compensation expense over the vesting period for each separately vesting portion of the unvested restricted shares.
The subscription price received by the Group in relation to the unvested restricted shares that are subject to the Repurchase Option held by the Company have been recognized as financial liabilities arising from unvested restricted shares as disclosed in Note 20.
The total expense recognized in the consolidated statements of profit or loss and other comprehensive loss for the restricted shares granted are approximately US$
The following table summarized the Group's restricted shares movement during the six months ended June 30, 2022 and 2023:
|
|
2023 |
|
|
2022 |
|
||
|
|
Number of unvested restricted shares |
|
|
Number of unvested restricted shares |
|
||
Outstanding as of January 1, |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
( |
) |
Outstanding as of June 30, |
|
— |
|
|
|
|
||
The range of subscription price for the restricted shares is US$
Share options
The following table discloses movements of the Company's share options under the 2016 Plan held by grantees during the six months ended June 30, 2022 and 2023:
|
|
2023 |
|
|
2022 |
|
||||||||||
|
|
Number of |
|
|
Weighted-average |
|
|
Number of |
|
|
Weighted-average |
|
||||
|
|
Options |
|
|
exercise price |
|
|
Options |
|
|
exercise price |
|
||||
|
|
|
|
|
US$ |
|
|
|
|
|
US$ |
|
||||
Outstanding at January 1, |
|
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|
|
|
|
|
|
||||
Granted |
|
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|
||||
Exercised |
|
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( |
) |
|
|
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( |
) |
|
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|
||
Forfeited |
|
|
( |
) |
|
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( |
) |
|
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|
||
Outstanding at June 30, |
|
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|
||||
Outstanding at June 30, 2023 as converted |
|
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|
||||
Exercisable at the end of the period |
|
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|
||||
Exerciseable at the end of June 30, 2023 as converted |
|
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|
||||
No share options granted in the above table under the 2016 Plan will be exercisable after the expiration of
In July 2016, the Apollomics Board adopted, and our shareholders approved the 2016 Plan. The 2016 Plan has not been amended since its adoption in July 2016. No further awards will be made under the 2016 Plan; however, awards outstanding under the 2016 Plan will continue to be governed by their existing terms. As of June 30, 2023 there were
17
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The share options outstanding as of June 30, 2022 and 2023 had a weighted average remaining contractual life of
The time-based share options will be vested ratably on a monthly basis over range of
In connection with the Business Combination, immediately prior to the closing, the Board terminated the 2016 Equity Incentive Plan, and the Board adopted the Apollomics Inc. The 2023 Equity Incentive Plan, which became effective as of the closing. The outstanding options in the 2016 Plan showing at June 30, 2023 of
OPM model was used to determine the fair value of the option granted.
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Grant date option fair value per share |
|
US$ |
|
|
US$ |
|
||
Exercise price |
|
US$ |
|
|
US$ |
|
||
Expected volatility (note i) |
|
|
% |
|
|
% |
||
Expected life |
|
|
|
|
||||
Risk-free rate |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
|
% |
|
|
% |
||
Note i: The expected volatility measured at the standard deviation is based on the historical data of the daily share price movement of comparable companies.
The total expense recognized in the unaudited condensed consolidated statements of loss and other comprehensive income for share options granted under the 2016 Plan are approximately US$
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used).
18
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
|
|
Fair value as of |
|
|
|
|
|
|
|
|
|
|||||
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
Fair |
|
Valuation technique(s) |
|
Significant |
|
Relationship of |
||
|
|
In thousands of US$ |
|
|
In thousands of US$ |
|
|
|
|
|
|
|
|
|
||
Financial assets |
|
|
|
|
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|
|
|
|
|
|
|
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|
||
Market fund |
|
|
|
|
|
|
|
Level 1 |
|
|
N/A |
|
N/A |
|||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Convertible preferred |
|
— |
|
|
|
|
|
Level 3 |
|
|
|
|
||||
Maxpro public warrants |
|
|
|
|
— |
|
|
Level 1 |
|
|
N/A |
|
N/A |
|||
Maxpro private warrants |
|
|
|
|
— |
|
|
Level 2 |
|
|
N/A |
|
N/A |
|||
Penny warrants (Note 5) |
|
|
|
|
— |
|
|
Level 3 |
|
|
N/A |
|
N/A |
|||
Total warrant liabilities: |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
||
Note: A
Details of reconciliation of Level 3 fair value measurement for the preferred shares are set out in Note 21. All the unrealized fair value changes gain of US$
19
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The management of the Company consider that the carrying amount of the Group's financial assets and financial liabilities recorded at amortized cost in the unaudited condensed consolidated financial statements approximate their fair values. Such fair values have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis.
The employees employed by the Zhejiang Crownmab Biotech Co.Ltd, PRC subsidiary are members of the state-managed retirement benefits scheme operated by the PRC government. The PRC subsidiary is required to contribute a certain percentage of their payroll to the retirement benefits scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefits scheme is to make the required contributions under the scheme.
The Group maintains multiple qualified contributory saving plans as allowed under Section 401(k) of the Internal Revenue Code in the US. These plans are defined contribution plans covering employees employed in the US and provide for voluntary contributions by employees, subject to certain limits. The contributions are made by both the employees and the employer. The employees' contributions are primarily based on specified dollar amounts or percentages of employee compensation.
The total cost charged to profit or loss of US$
At the end of each reporting period, there were no forfeited contributions which arose upon employees leaving the schemes prior to their interests in the Group's contribution becoming fully vested and which are available to reduce the contributions payable by the Group in future years.
The remuneration of directors of the Company and other members of key management were as follows:
|
|
For the six months ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
(In thousands of US$) |
|
US$ |
|
|
US$ |
|
||
Short term benefits |
|
|
|
|
|
|
||
Retirement benefit scheme contributions |
|
|
|
|
|
|
||
Share-based payment |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
The remuneration of key management personnel is determined by the directors of the Company having regard to the performance of individuals and market trends.
The Company's ability to pay dividends may depend on the Company receiving distributions of funds from its subsidiaries. The Company's PRC subsidiaries are subject to relevant PRC statutory laws and regulations which permit payments of dividends only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In the event of such dividends being declared, there would be PRC withholding tax on such dividends. The results of operations reflected in the unaudited condensed consolidated financial statements prepared in accordance with IAS 34 differ from those reflected in the statutory financial statements of the Company's PRC subsidiaries. Foreign exchange and other regulations in the PRC further restrict the Company's PRC subsidiaries from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2022 and June 30, 2023, amounts restricted are the paid-in capital of the Company's PRC subsidiaries, which amounted to US$
20
APOLLOMICS INC.
Notes to Condensed Consolidated Interim Financial Statements (Unaudited)
The Group has evaluated subsequent events through September 28, 2023, which is the date when the unaudited condensed consolidated financial statements were available to be issued.
21
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and the related notes to those statements included as Exhibit 99.1 to this Report on Form 6-K submitted to the Securities and Exchange Commission, or the SEC, on September 28, 2023. We also recommend that you read our discussion and analysis of financial condition and results of operations together with our audited financial statements and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2022 as filed with the Securities and Exchange Commission, or the SEC on April 28, 2023 (the “Annual Report”).
The following discussion contains forward-looking statements based upon Apollomics’ current expectations that involve risks, uncertainties, and assumptions. Apollomics’ actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” and/or elsewhere in the Annual Report. Apollomics’ historical results are not necessarily indicative of the results that may be expected for any period in the future. In this section, unless otherwise indicated or the context otherwise requires, the terms “we,” “our,” “us,” “Apollomics,” “Apollomics’,” the "Company," and “its” refer to Apollomics and its consolidated subsidiaries. All dollar amounts are expressed in thousands of United States dollars (“$”), unless otherwise indicated.
Overview
We are a clinical-stage biotechnology company focused on the discovery and development of oncology therapies to address unmet medical needs. Since our founding in 2015, we have built a pipeline of nine drug candidates across eleven programs that focus on oncology, of which six drug candidates are at clinical stage.
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 pipeline indications across a range of cancers, such as AML, 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, 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.
Two of our leading drug candidates, APL-101and APL-106, have shown initial promising clinical results and are in the late stages of clinical development. We also have a number of innovative drug candidates in earlier stages of clinical, preclinical, and discovery development.
We operate in both the United States and China, with headquarters and global drug development team in the San Francisco Bay area with discovery and China drug development team in Hangzhou and Shanghai, China. We believe that we benefit from these key centers of excellence in the biotechnology industries of the East and West. Please refer to our “Risks Related to Doing Business in Greater China” in the Annual Report.
On March 29, 2023 (the “Closing Date”), Apollomics consummated a business combination (the “Business Combination”) with Maxpro Capital Acquisition Corp., a Delaware corporation and a special purpose acquisition company, pursuant to which Apollomics became a publicly traded company on the Nasdaq Capital Market (“Nasdaq”). The Company’s Class A ordinary shares and warrants are listed on Nasdaq under the trading symbols “APLM” and “APLMW,” respectively.
Additionally, on the Closing Date, Apollomics completed the sale of (i) 230,000 Class B Ordinary Shares at $10.00 per share and (ii) 2,135,000 Series A Preferred Shares at $10.00 per share to certain accredited investors (the “PIPE Investors”) for gross proceeds to Apollomics of $23,650,000 (the “PIPE Financing”). Each Series A Preferred Share is convertible, at any time at the option of the holder thereof, into Class A Ordinary Shares at an initial conversion ratio of 1:1.25. On May 18, 2023, all Series A Preferred Shares have been converted at a ratio of 1:1.25, into 2,668,750 Class A Ordinary Shares. Prior to the six-month anniversary of the Closing Date, no holder may transfer any such Class A Ordinary Shares into which such Series A Preferred Shares were converted. Each PIPE Investor who subscribed for Class B Ordinary Shares also received one-fourth of one warrant Penny Warrant (together with the Class B Ordinary Shares subscribed by the PIPE Investors and the Series A Preferred Shares, the “PIPE Securities”) for every Class B Ordinary Shares purchased, pursuant to warrant agreements entered into between Apollomics and each PIPE Investor purchasing Class B Ordinary Shares. Each Apollomics Series A Preferred Share was sold pursuant to the Subscription Agreements for $10.00 per share, but entitled the holder thereof to 1.25 Apollomics Class A Ordinary Shares, implying an effective purchase price of $8.00 per share. Similarly, each Apollomics Class B Ordinary Share was sold pursuant to the Subscription Agreements for $10.00 per share, but entitled the holder thereof to one-fourth of one Penny Warrant for every Apollomics Class B Ordinary Share purchased thereto, with each whole Penny Warrant
1
exercisable to purchase one Apollomics Class A Ordinary Share for $0.01 per share, implying an effective purchase price of approximately $8.00 per share.
In addition, in connection with the Business Combination, Maxpro’s stockholders redeemed 10,270,060 out of the 10,350,000 public shares available, representing 99.2% of Maxpro’s public float, which resulted in Apollomics receiving nominal cash in connection with the Business Combination other than through the PIPE Financing.
Notwithstanding the foregoing, we believe our cash on hand, without regard to any such cash proceeds we may receive upon the exercise for cash of our warrants, is sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. While we have outstanding warrants, which may provide an additional source of cash upon exercise, for so long as the warrants remain “out-of-the money,” we do not expect warrant holders to exercise their warrants and, therefore, we do not expect to receive cash proceeds from any such exercise. If and to the extent we determine to raise additional capital in the future, there can be no assurance that such additional capital would be available on attractive terms, if at all.
Our Drug Candidate Pipeline
The drug candidates in our existing pipeline can be categorized into three groups based on their mechanisms of action, each of which contains drug candidates at various stages of development: (i) tumor inhibitors; (ii) anti- cancer enhancers; and (iii) immuno-oncology drugs. We believe that having three groups of drug candidates with different mechanisms of action will enable us to develop potential synergistic therapies that address unmet needs in cancer treatment.
Tumor Inhibitors
We are developing therapies that may target alternative pathways to overcome cancer treatment resistance, including chemo-resistance and targeted therapy resistance. Our tumor inhibitor drug candidates consist of [three] small molecule inhibitors against different uncontrolled growth signaling pathways in cancer cells. Our tumor inhibitor drug candidates are APL-101, APL-102, and APL-122.
APL-101 is our leading and one of the most advanced drug candidates in our pipeline. APL-101 is a potent, highly selective c-Met inhibitor. Cancer cells often use c-Met activation to escape therapies targeting other signaling pathways. c- Met is a clinically validated target in lung cancer and potentially in other solid tumors. We are investigating APL-101in clinical trials as a single agent for the treatment of non-small cell lung cancer (“NSCLC”) and other advanced tumors with c-Met alterations, and as a combination therapy with epidermal growth factor receptor (“EGFR”) inhibitors. We have received orphan drug designation (ODD) of APL-101 for “treatment of non-small cell lung cancer with MET genomic tumor aberrations.” We intend to continue to explore the possibility of combining APL-101 with other drugs or drug candidates.
APL-106 (Uproleselan, GMI-1687), is our first-in-class E-selectin inhibitor. APL-106 was granted Fast Track designation by US Food and Drug Administration (“FDA”) and Break Through designation by China National Medical Product Administration (“NMPA”) to expedite its development. It is administered in combination with chemotherapy for treatment of recurrent relapsing (“r/r”) AML in an ongoing phase 3 bridging clinical study in China, and the ongoing global phase 3 clinical study in r/r AML has been fully enrolled since November, 2021, while the National Cancer Institute is sponsoring an ongoing phase 2/3 study with for treatment of newly diagnosed older adults with AML who are fit for chemotherapy. APL-108 (GMI-1687), a second-generation E-selective inhibitor with even higher potency, is IND-ready for entry into clinical trials for other indications.
APL-102, is our oral active, small molecule MTKi that has shown anti-tumor activity in multiple preclinical studies, such as models of liver cancer, breast cancer, and esophageal cancer, both as a single agent and in combination with an anti-PD-1 antibody. Given that APL-102 inhibits several kinases that are aberrantly activated in cancer cells, we consider that APL-102 has the potential to overcome cancer treatment resistance.
APL-102 is in Phase I dose escalation clinical trial in China and is at the sixth dose level. As of the date of this report, dose- limiting toxicity has not been observed in human subjects.
APL-122 is our tumor inhibitor candidate. APL-122 targets ErbB1/2/4 signaling pathways and it is brain penetrating. APL-122 is in Phase I dose escalation.
2
Anti-Cancer Enhancers
Our anti-cancer enhancer drug candidates consist of [two] antagonists against a cell adhesion receptor, APL-106 and APL-108, which are being developed as adjuncts to chemotherapy to enhance its anti-cancer effects. Binding of cancer cells to E-Selectin enhances their adhesion to the endothelium in bone marrow niches, thereby preventing the cancer cells from entering circulation and shielding them from chemotherapy.
APL-106 is our specific E-Selectin antagonist that has the potential to be used adjunctively with standard chemotherapy to treat AML and other hematologic cancers. In preclinical studies, APL-106 reduced toxic effects of chemotherapy on normal cells, including neutropenia and mucositis, and, in combination with chemotherapy, sensitized cancer cells to chemotherapy. Early-stage clinical trials demonstrated that APL-106 has a favorable safety, PK and biomarker profile. APL-106 is also designed to block E-selectin (an adhesion molecule on cells in the bone marrow) from binding with blood cancer cells as a targeted approach to disrupting well-established mechanisms of leukemic cell resistance within the bone marrow microenvironment.
We are advancing the preclinical and clinical development of APL-108, is our next-generation E-Selectin antagonist with enhanced potency suitable for subcutaneous administration and potentially to targets other liquid and solid cancers, that is currently in preclinical development.
Immuno-Oncology Drugs
Our immuno-oncology drug candidates consist of [four] drug candidates: APL-501; APL-502; APL-801; and APL-810. These drug candidates may take the advantage of the body’s immune system to fight cancer and include mono-specific and bi-specific antibodies that could release the natural brakes of immune response against cancer cells, as well as a novel cancer vaccine.
APL-501 is our anti-PD-1 antibody drug candidate. Preclinical studies demonstrated that APL-501 has anti-tumor activity comparable to the marketed anti-PD-1 antibody, Opdivo (nivolumab), and a good safety profile with exceptionally low antibody-dependent cell mediated cytotoxicity and complement-dependent cytotoxicity. Genor, our partner in China for APL-501, has filed a Biologics License Application (“BLA”) with the Chinese NMPA.
APL-502 is our anti-PD-L1 antibody drug candidate and is being developed by Chia Tai Tian Qing Pharma ( “CTTQ”), our partner in China under a tri-party agreement with the licensor. APL-502 has reached the clinical stage of development in China. Having our own anti-PD-1 and anti-PD-L1 antibody candidates allows us to develop single-agent and combination therapies based on PD-(L)1 inhibition and enables us to use these antibodies as backbones and to design and generate novel molecules, such as multi-specific antibodies, which may have improved activity compared with currently marketed immune checkpoint inhibitor products.
Our pipeline also includes another two novel immuno-oncology drug candidates, namely an anti-PD-L1/anti-CD40 bi-specific antibody, APL-801, and an antigen-specific, active checkpoint-control cancer vaccine, APL-810.
3
Drug Candidate Development Status
The status of our pipeline of drug candidates ranges from the discovery stage to the clinical stage. The following chart summarizes the development status of our drug candidates. The parties also have ongoing clinical trials in their respective territories.
Key highlights of clinical trials conducted by third parties on our drug candidates include: (i) Pearl has conducted clinical trials for APL-101 in China into phase 2; (ii) GlycoMimetics has conducted clinical trials for APL-106 into phase 3 in the rest of the world outside of China; (iii) GlycoMimetics has conducted pre-clinical studies for APL-108 and filed an IND in the United States; (iv) Genor has conducted clinical trials for APL-501 in China through phase 3; and (v) CTTQ has conducted clinical trials for APL-502 in China into phase 3. Apollomics is not responsible for, and does not have control over, clinical trials conducted by such third parties and does not have any direct financial interest in the development of our drug candidates by such third parties. However, the development of our drug candidates by such third parties has the potential to benefit the regulatory status and development costs of such drug candidates in the geographies and trials for which we are responsible and do control due to our ability to access the developmental and clinical data from such third parties and to benefit from the feedback of such trials as information regarding such trials is made available.
We currently have no drug candidates 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. Our net losses were $3.4 million and $150.7 million for the six months ended June 30, 2022 and 2023, respectively. Substantially all of our operating losses resulted from research and development expenses, administrative expenses, and fair value change of our convertible preferred shares.
As of June 30, 2023, we had an accumulated deficit of $625.1 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future if and as we:
4
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.
COVID-19 Business Update
The global COVID-19 pandemic continues to evolve. The extent of the impact of the COVID-19 pandemic on Apollomics’ business, operations and development timelines and plans remains uncertain and will depend on certain developments, including the duration and spread of the outbreak and its impact on Apollomics’ development activities, third-party manufacturers, and other third parties with whom Apollomics does business, as well as its impact on regulatory authorities and Apollomics’ key scientific and management personnel. As the COVID-19 pandemic has developed, Apollomics has taken numerous steps to help ensure the health and safety of its employees. Apollomics is maintaining hygiene and respiratory protocols; controls for social distancing; enhanced cleaning, disinfecting, decontamination, and ventilation protocols; health policies; and usage of personal protective equipment, where appropriate.
Apollomics continues to actively monitor the impact of the COVID-19 pandemic on its clinical trials. Apollomics has experienced some impacts on its clinical trials due to the pandemic, including challenges related to recruiting, enrolling and treating patients in clinical trials due to patients’ concern regarding exposure risk; patients and clinical trial staff being exposed to SARS-CoV-2 or contracting COVID-19; reduced staffing at clinical trial sites due to the diversion of resources at clinical sites to address the effects of the pandemic; and travel restrictions and shutdowns impacting patients and clinical trial staff. In addition, Apollomics has experienced delays in its contract manufacturing plans as a direct or indirect result of the COVID-19 pandemic, including supply chain issues, competition for manufacturing capacity from manufacturers of COVID-19 related therapeutics. While certain of these impacts have been resolved since the start of the COVID-19 pandemic, Apollomics continues to monitor its clinical development and supply chain and contingency planning is ongoing with its partners to reduce the possibility and magnitude of interruptions to its development activities or the availability of necessary materials.
The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. To the extent possible, Apollomics is conducting business as usual, with necessary or advisable modifications to employee travel and with certain of its employees working remotely all or part of the time. Apollomics will continue to actively monitor the evolving situation related to COVID-19 and may take further actions that alter Apollomics’ operations, including those that federal, state, or local authorities may require, or that Apollomics determines in the best interests of Apollomics’ clinical trial subjects, employees and other third parties with whom Apollomics does business. At this point, the extent to which the COVID-19 pandemic may affect Apollomics’ future business, operations and development timelines and plans, including the resulting impact on Apollomics’ expenditures and capital needs, remains uncertain.
Key Components of Our Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates. We expense research and development costs as incurred, which include:
5
Research and development costs are expensed as 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 that which we currently anticipate, or beyond which 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.
From inception through June 30, 2023, we have incurred $145.2 million in research and development expenses. We plan to increase our research and development expenses for the foreseeable future as we continue the development of our therapeutic candidates, the discovery and development of preclinical therapeutic candidates, and the development of our clinical programs.
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 research and development 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 activities are central to our business model. We expect that our research and development expenses will continue to increase for the foreseeable future as we initiate clinical trials for our product candidates and continue to discover and develop additional product candidates. If any of our product candidates enter into later stages of clinical development, they 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.
6
Administrative Expenses
Administrative expenses consist primarily of salaries, benefits, and other related costs, including share-based payment expense, for personnel in our executive, operations, 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 increase substantially in the future as we increase our administrative personnel to support our continued growth and the potential commercialization of our product candidates.
Issuance Costs for Convertible Preferred Shares
Issuance costs for convertible preferred shares primarily consist of financial advisory fees incurred by us in relation to our Series C convertible preferred shares financing. There were no issuance costs for convertible preferred shares for the six months ended June 30, 2022 and the Company incurred issuance costs of $1.5 million for the PIPE issuance for the six months ended June 30, 2023.
Other Expenses
Other expenses for the six months ended June 30, 2022 amounted to $4.0 million and primarily related to professional fees for our endeavor to list on the Hong Kong Stock Exchange in a Global Offering that ultimately did not occur. Other expenses for the six months ended June 30, 2023 amounted to $47.5 million and primarily related to professional fees in connection with the Business Combination.
Following the completion of the Business Combination, we expect to 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.
Other Income, Gains and Losses
Other Income
Other income primarily consists of interest income and government grants. Interest income is primarily derived from our cash and cash equivalents and time deposits with original maturity over three months. Government grants consist of unconditional subsidies received from the Australian and PRC governments to support our research and development activities carried out by us in Australia and in the PRC.
Other Gains and Losses
Other gains and losses primarily consist of foreign exchange gains and losses as a result of foreign exchange rate fluctuation. Our other losses amounted to $0.7 million and $2.1 million for the six months ended June 30, 2022 and 2023, respectively.
Fair Value Change of Financial Assets at FVTPL
Fair value change of financial assets at FVTPL consist of non-cash impacts on our profit or loss as a result of the fair value change of our investment in a market fund in the U.S. which solely holds investments in U.S. treasury bonds.
Fair Value Change of Financial Liabilities at FVTPL
Fair value change of financial liabilities at FVTPL consist of non-cash impacts on our profit or loss as a result of the fair value change of the liabilities arising from (i) the warrants issued to certain independent investors in July 2016 exercisable for our Series A-1 Preferred Shares, and (ii) the contingent payables on our Series B Preferred Shares relating to certain performance targets stipulated in our investors’ rights agreement dated September 19, 2018.
7
Results of Operations
Comparison of the Six Months Ended June 2022 and 2023
The following table presents Apollomics’ unaudited statement of profit or loss and other comprehensive loss data for the six months ended June 2022 and 2023, and the dollar changes between the two periods:
|
|
Six months ended June 30, |
|
|
Change |
|
||||||||||
(In thousands of US$, except percentages) |
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
||||
Other income |
|
$ |
401 |
|
|
$ |
756 |
|
|
$ |
(355 |
) |
|
|
(47 |
)% |
Foreign exchange losses |
|
|
(2,104 |
) |
|
|
(725 |
) |
|
|
(1,379 |
) |
|
|
190 |
% |
Fair value change of financial assets at FVTPL |
|
|
460 |
|
|
|
32 |
|
|
|
428 |
|
|
|
1,348 |
% |
Fair value change of financial liabilities at FVTPL |
|
|
676 |
|
|
— |
|
|
|
676 |
|
|
|
100 |
% |
|
Fair value change of convertible preferred shares |
|
|
(76,430 |
) |
|
|
23,669 |
|
|
|
(100,099 |
) |
|
|
(423 |
)% |
Research and development expenses |
|
|
(16,518 |
) |
|
|
(17,999 |
) |
|
|
1,481 |
|
|
|
(8 |
)% |
Administrative expenses |
|
|
(9,652 |
) |
|
|
(5,097 |
) |
|
|
(4,555 |
) |
|
|
89 |
% |
Finance costs |
|
|
(60 |
) |
|
|
(44 |
) |
|
|
(16 |
) |
|
|
35 |
% |
Other expense |
|
|
(47,457 |
) |
|
|
(4,008 |
) |
|
|
(43,449 |
) |
|
|
1,084 |
% |
Loss before taxation |
|
|
(150,684 |
) |
|
|
(3,416 |
) |
|
|
(147,268 |
) |
|
|
4,312 |
% |
Income tax expenses |
|
|
(10 |
) |
|
|
(1 |
) |
|
|
(9 |
) |
|
|
900 |
% |
Loss and total comprehensive loss for the period, |
|
$ |
(150,694 |
) |
|
$ |
(3,417 |
) |
|
$ |
(147,277 |
) |
|
|
4,311 |
% |
Research and Development
The following table summarizes the components of our research and development expenses for the six months ended June 2022 and 2023:
|
|
Six months ended June 30, |
|
|
Change |
|
||||||||||
(In thousands of US$, except percentages) |
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
||||
R&D Third-Party Service Fees and Contractor Expenses: |
|
$ |
(10,171 |
) |
|
$ |
(11,691 |
) |
|
$ |
1,520 |
|
|
|
(13 |
)% |
APL-101 |
|
|
(8,319 |
) |
|
|
(8,387 |
) |
|
|
68 |
|
|
|
(1 |
)% |
APL-102 |
|
|
(55 |
) |
|
|
(112 |
) |
|
|
57 |
|
|
|
(51 |
)% |
APL-106 |
|
|
(842 |
) |
|
|
(1,372 |
) |
|
|
530 |
|
|
|
(39 |
)% |
APL-121 |
|
|
— |
|
|
|
(73 |
) |
|
|
73 |
|
|
|
(100 |
)% |
APL-122 |
|
|
— |
|
|
|
(583 |
) |
|
|
583 |
|
|
|
(100 |
)% |
APL-501 |
|
|
(805 |
) |
|
|
(563 |
) |
|
|
(242 |
) |
|
|
43 |
% |
Discovery & other |
|
|
(150 |
) |
|
|
(601 |
) |
|
|
451 |
|
|
|
(75 |
)% |
R&D Employee Compensation and Benefits |
|
|
(3,515 |
) |
|
|
(5,056 |
) |
|
|
1,541 |
|
|
|
(30 |
)% |
R&D Employee Stock Based Compensation |
|
|
(2,832 |
) |
|
|
(1,252 |
) |
|
|
(1,580 |
) |
|
|
126 |
% |
Total Research and Development Expenses |
|
$ |
(16,518 |
) |
|
$ |
(17,999 |
) |
|
$ |
1,481 |
|
|
|
(8 |
)% |
Research and development expenses for the six months ended June 30, 2023 were $16.5 million, compared to $18.0 million for the six months ended June 30, 2022. The decrease of $1.5 million (or 8%) is primarily due to the $1.5 million decrease in third party service fees and contractor expenses, the $1.5 million decrease in employee compensation and benefits, and partially offset by $1.5 million increase in employee stock-based compensation. The decrease in third party service fees and contractor expenses was attributable primarily to timing of spending in APL-106 and project re-alignment in APL-122. The decrease in employee compensation and benefits was due to a reduction in headcount. The increase in employee stock-based compensation was primarily attributable to increased stock options granted to incentivize employees.
We manage our R&D third-party service fees and our contractor expenses by product, which is shown in the table above. We do not allocate our R&D employee compensation and benefits, nor our R&D employee stock-based compensation into our product lines.
8
Administrative Expenses
The following table summarizes the components of our administrative expenses for the six months ended June 30, 2022 and 2023:
|
|
Six months ended June 30, |
|
|
Change |
|
||||||||||
(In thousands of US$, except percentages) |
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
||||
Administrative Employee Compensation and Benefits |
|
$ |
(1,951 |
) |
|
$ |
(2,467 |
) |
|
$ |
516 |
|
|
|
(21 |
)% |
Administrative Employee Stock Based Compensation |
|
|
(2,448 |
) |
|
|
(812 |
) |
|
|
(1,636 |
) |
|
|
201 |
% |
Administrative Third-Party Service Fees |
|
|
(2,361 |
) |
|
|
(707 |
) |
|
|
(1,654 |
) |
|
|
234 |
% |
Rental and Maintenance |
|
|
(129 |
) |
|
|
(520 |
) |
|
|
391 |
|
|
|
(75 |
)% |
Travel Expenses |
|
|
(139 |
) |
|
|
(81 |
) |
|
|
(58 |
) |
|
|
72 |
% |
Sales and Marketing Expenses |
|
|
(63 |
) |
|
|
(26 |
) |
|
|
(37 |
) |
|
|
142 |
% |
Depreciation |
|
|
(356 |
) |
|
|
(352 |
) |
|
|
(4 |
) |
|
|
1 |
% |
Others |
|
|
(2,205 |
) |
|
|
(132 |
) |
|
|
(2,073 |
) |
|
|
1,570 |
% |
Total |
|
$ |
(9,652 |
) |
|
$ |
(5,097 |
) |
|
$ |
(4,555 |
) |
|
|
89 |
% |
Administrative expenses for the six months ended June 30, 2023 were $9.7 million, compared to $5.1 million for the six months ended June 30, 2022. The increase of $4.6 million (or 89%) was primarily due to a $2.1 million increase in other administrative expenses mainly from directors’ and officers’ insurance attributable to the Company becoming a publicly listed pursuant to the Business Combination, a $1.7 million increase in third-party service fees mainly from professional fees associated with the Business Combination, and a $1.6 million increase in administrative employee stock-based compensation for stock options granted to incentivize employees, and partially offset by a $0.5 million decrease in administrative employee compensation and benefits due to reduced headcount and a reversal of a bonus accrual.
Other Expenses
Other expenses for the six months ended June 30, 2023, were $47.5 million, compared to $4.0 million for the six months ended June 30, 2022. Other expenses in the six months ended June 30, 2022 primarily include fees incurred by us in relation to certain professional services for our endeavor to list on the Hong Kong Stock Exchange in a Global Offering in February, 2021 that ultimately did not occur. Other expenses in the six months ended June 2023 primarily include expenses related to the Business Combination.
Other Income
The following table summarizes the components of our other income for the six months ended June 30, 2023 and 2022:
|
|
Six months ended June 30, |
|
|
Change |
|
||||||||||
(In thousands of US$, except percentages) |
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
||||
R&D tax credit |
|
|
— |
|
|
$ |
531 |
|
|
$ |
(531 |
) |
|
|
(100 |
)% |
Interest income |
|
|
373 |
|
|
|
193 |
|
|
|
180 |
|
|
|
93 |
% |
Other |
|
|
28 |
|
|
|
32 |
|
|
|
(4 |
) |
|
|
(13 |
)% |
Total |
|
$ |
401 |
|
|
$ |
756 |
|
|
$ |
(355 |
) |
|
|
(47 |
)% |
Other income was $0.4 million for the six months ended June 30, 2023, compared to $0.8 million for the six months ended June 30, 2022. The decrease of $0.4 million (or 47%) was primarily due to the $0.5 million decrease in research and development tax credit in Australia due to timing of filing offset by a $0.2 million increase in interest income mainly from our China investments.
Fair Value Change of Convertible Preferred Shares
The fair value change of convertible preferred shares was an increase in fair value of $76.4 million for the six months ended June 30, 2023, compared to a decrease of $23.7 million for the six months ended June 20, 2022. The fair value change of convertible preferred shares depends on the change in the value of the business and macroeconomic factors.
9
Liquidity and Capital Resources
Funding Requirements
Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and continuing operating losses for the foreseeable future as we advance the clinical development of our programs. We have funded our operations to date primarily with proceeds from sales of our equity securities.
The following table represents our cash and cash equivalents and highly liquid financial assets as of December 31, 2022 and June 30, 2023:
(In thousands of US$) |
|
As of June 30, 2023 |
|
|
As of December 31, 2022 |
|
||
Cash and cash equivalents |
|
$ |
25,296 |
|
|
$ |
32,675 |
|
Time deposits with maturity less than twelve months |
|
|
6,920 |
|
|
|
2,872 |
|
Time deposits with maturity greater than twelve months |
|
— |
|
|
|
4,307 |
|
|
Financial assets at FVTPL |
|
|
20,400 |
|
|
|
19,067 |
|
Total |
|
$ |
52,616 |
|
|
$ |
58,922 |
|
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, research and development 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 stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ 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.
Notwithstanding the foregoing, we believe our cash on hand, without regard to any such cash proceeds we may receive upon the exercise for cash of our warrants, is sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. While we have outstanding warrants, which may provide an additional source of cash upon exercise, for so long as the warrants remain “out-of-the money,” we do not expect warrant holders to exercise their warrants and, therefore, we do not expect to receive cash proceeds from any such exercise. If and to the extent we determine to raise additional capital in the future, there can be no assurance that such additional capital would be available on attractive terms, if at all.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “Risk Factors” in our Annual Report.
Cash Flows
The following table summarizes our cash flows for the six months ended June 30, 2022 and 2023:
|
|
For the six month ended June 30, |
|
|||||
(In thousands of US$) |
|
2023 |
|
|
2022 |
|
||
Net cash used in operating activities |
|
$ |
(24,397 |
) |
|
$ |
(19,726 |
) |
Net cash (used in) or provided by investing activities |
|
|
(242 |
) |
|
|
23,839 |
|
Net cash (used in) or provided by financing activities |
|
|
17,241 |
|
|
|
(153 |
) |
Effects of Exchange Rate Changes on Cash and Cash Equivalents |
|
|
19 |
|
|
|
— |
|
Net change in cash and cash equivalents |
|
$ |
(7,379 |
) |
|
$ |
3,960 |
|
10
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 research and development, and administrative expenses. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable, accounts receivable and other current assets and liabilities.
Net cash used in operating activities was $(19.7) million for the six months ended June 30, 2022 resulting primarily from a net loss of $(3.4) million, adjusted for non-cash charges of $(0.2) million in interest income, $0.4 million in depreciation and amortization, including depreciation of operating right-of-use of assets, $0.4 million realized exchange losses, $(32) thousand in negative fair value change of financial assets at FVTPL, $(23.7) million in negative fair value change of convertible preferred shares, $44 thousand in finance costs, $2.1 million in share-based payments, $2.5 million in unrealized foreign currency losses, $2.2 million in working capital adjustments and $56 thousand in taxes refunded.
Net cash used in operating activities was $(24.4) million for the six months ended June 30, 2023 resulting primarily from a net loss of $(150.7) million, adjusted for non-cash charges of $(0.4) million in interest income, $0.4 million in depreciation and amortization, including amortization of operating right of use of assets, $(0.9) million in realized exchange gains, $(0.5) million in negative fair value change of financial assets at FVTPL, $(0.7) million in fair value change of financial liabilities at FVPL, $76.4 million in positive fair value change of convertible preferred shares, $45.5 million for IFRS 2 listing expense, $5.3 million in share-based payments, $3.0 million in unrealized foreign currency losses, $(1.9) million in working capital adjustments and $(10) thousand in taxes paid.
Cash Flows Used in/Provided by Investing Activities
Net cash provided by investing activities was $23.8 million for the six months ended June 30, 2022 resulting primarily from the proceeds from redemption of time deposits with maturity over three months when acquired of $24.0 million and interest received for $0.2 million, offset by additions of plant and equipment of $(0.3) million and $(17) thousand payment of rental deposits.
Net cash used in investing activities was $(0.2) million for the six months ended June 30, 2023 resulting primarily from interest received of $0.4 million, the proceeds from redemption of time deposits with maturity over three months when acquired of $4.3 million, the placement of time deposits with maturity over three months when acquired of $(4.0) million, purchase of plant and equipment of $(6) thousand, placement investments through FVTPL of ($0.9) million and refunds of deposits totaling $5 thousand.
Cash Flows Used in/Provided by Financing Activities
Net cash used in financing activities was $(0.2) million for the six months ended June 30, 2022 resulting primarily from the $(44) thousand interest paid and the repayment of lease liabilities for $(0.3) million, offset by the proceeds on issuance of ordinary shares upon exercise of share options for $0.2 million.
Net cash provided by financing activities was $17.2 million for the six months ended June 30, 2023 resulting primarily from the proceeds from PIPE financing and business combination, net of transaction costs, for $20.2 million, payment of deferred underwriting fees of $(2.8) million, the issue of shares upon exercise of stock options for $0.1 million, partially offset by the payment of interest of $(0.1) million, and repayment of lease liabilities for $(0.3) million.
Effects of Exchange Rate Changes on Cash and Cash Equivalents
Effects of exchange rate changes on cash and cash equivalents was $0 for the six months ended June 30, 2022.
Effects of exchange rate changes on cash and cash equivalents was $19 thousand for the six months ended June 30, 2023 resulting primarily from the translation of the Company's property and equipment of $3 thousand and right-of-use assets of $16 thousand.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations as of June 30, 2023, and the effects of such obligations are expected to have on our liquidity and cash flow in future periods (in thousands):
|
|
Payments due by period |
|
|||||||||||||||||
(In thousands of US$) |
|
Total |
|
|
Less than 1 year |
|
|
1-2 years |
|
|
2-5 years |
|
|
More than 5 years |
|
|||||
Lease commitments |
|
$ |
679 |
|
|
$ |
385 |
|
|
$ |
294 |
|
|
$ |
— |
|
|
$ |
— |
|
11
Lease Commitments
Lease agreements are entered into for fixed lease terms of 12 to 60 months, without extension and termination options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. In determining the lease term and assessing the length of the non-cancelable period, the Company applies the definition of a contract and determines the period for which the contract is enforceable. The Company recognized $571 thousand and $571 thousand of right-of- use assets and lease liabilities during the six months ended June 30, 2022, respectively, and recognized no right-of-use assets or lease liabilities during the six months ended June 30, 2023.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future significant effect on our financial condition, results of operations, liquidity, or cash flows.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting policies that conform with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"). In the application of our accounting policies, our directors 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.
Our most critical accounting policies and estimates are summarized below. Please refer to Notes 4 and 5 to our audited consolidated financial statements for more details about our significant accounting policies and critical judgment and key estimates.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible for and intend 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. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
12
We will remain an emerging growth company under the JOBS Act until the earliest of (i) the last day of the fiscal year in which the market value of our 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 has 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 of the Business Combination.
Impairment of financial assets
We perform impairment assessment under expected credit loss (“ECL”) model on financial assets (including deposits, amounts due from subsidiaries, time deposits with original maturity over three months and cash and cash equivalents) which are subject to impairment under IFRS 9. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition.
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of the relevant instrument. In contrast, 12-month ECL (“12m ECL”) represents the portion of lifetime ECL that is expected to result from default events that are possible within 12 months after the reporting date. Assessments are done based on our historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, and an assessment of both the current conditions at the reporting date as well as the forecast of future conditions.
For all financial instruments, we measure the loss allowance equal to 12m ECL, unless there has been a significant increase in credit risk since initial recognition, the Group recognizes lifetime ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or risk of a default occurring since initial recognition.
New Accounting Pronouncements
See Note 3, Adoption of new and amendments to IFRSs, to our consolidated financial statements included elsewhere in this filing.
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to a variety of market risks, including currency risk, concentration risks, interest rate risk, other price risk, credit and counterparty risk and liquidity risk, as set out below. We manage and monitor these exposures to ensure appropriate measures are implemented in a timely and effective manner. Save as disclosed below, we did not hedge or consider necessary to hedge any of these risks.
Currency Risk
Foreign currency risk is the risk that the value of a financial instrument fluctuates because of the change in foreign exchange rates. We primarily operate in the U.S., PRC, and Australia, with most of the transactions settled in the U.S. dollar. Our presentation and functional currency is the U.S. dollar. Certain bank balances, deposits and other payables are denominated in Renminbi and Australian dollar, which exposes us to foreign currency risk.
We incur portions of our expenses in currencies other than the U.S. dollar, in particular, the Renminbi and Australian dollar. As a result, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates, we have not entered into any derivative contracts to hedge against our exposure to currency risk during the six months ended June 30, 2022 or 2023. However, our management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.
The carrying amounts of our foreign currency denominated monetary assets and monetary liabilities at the end of each reporting period are as follows (in US$ 000's):
|
|
Assets |
|
|
Liabilities |
|
||||||||||
|
|
As of June 30, |
|
|
As of June 30, |
|
||||||||||
(In thousands of US$) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Renminbi (“RMB”) |
|
$ |
10,336 |
|
|
$ |
8,186 |
|
|
$ |
1,491 |
|
|
$ |
785 |
|
Australian Dollars (“AUD”) |
|
|
521 |
|
|
|
1,326 |
|
|
|
819 |
|
|
|
426 |
|
|
|
$ |
10,858 |
|
|
$ |
9,512 |
|
|
$ |
2,310 |
|
|
$ |
1,211 |
|
13
As of June 30, 2022 and 2023, (i) if Renminbi strengthened or weakened by 5% against the U.S. dollar with all other variables held constant, our loss for the six months June 30, 2022 and 2023 would decrease or increase by $188 thousand and decrease or increase by $131 thousand, respectively; and (ii) if the Australian dollar strengthened or weakened by 5% against the U.S. dollar with all other variables held constant, our loss for the six months ended June 30, 2022 and 2023 would decrease or increase by $9 thousand and decrease or increase by $29 thousand, respectively.
Concentration of Risks
The carrying amounts of financial instruments that potentially subject us to significant concentration of credit risk primarily consist of cash and cash equivalents. As of December 31, 2022 and June 30, 2023, we had RMB203.3 million (US$29.2 million) in cash and cash equivalents, and RMB184.5 million (US$25.5 million), respectively, in cash and cash equivalents which are held by financial institutions in the PRC. We continue to monitor the financial strength of the four financial institutions in the PRC where we hold our cash and cash equivalents. PRC state-owned banks are subject to a series of risk control regulatory standards, and PRC bank regulatory authorities are empowered to take over the operation and management when any of those banks faces a material credit crisis. We do not foresee substantial credit risk with respect to cash and cash equivalents held at these PRC state-owned banks. Meanwhile, the PRC does not have an official deposit insurance program, nor does it have an agency similar to what was the Federal Deposit Insurance Corporation (FDIC) in the U.S. In the event of bankruptcy of one of the financial institutions in which we have deposits or investments, we may be unlikely to claim our deposits or investments back in full. We selected reputable PRC financial institutions with high rating rates to place our foreign currencies. We regularly monitor the rating of these PRC financial institutions to avoid any potential defaults. There has been no recent history of default in relation to these financial institutions.
Interest Rate Risk
We are exposed to fair value interest rate risk in relation to time deposits, lease liabilities, and convertible preferred shares. We are also exposed to cash flow interest rate risk in relation to variable-rate bank balances. Our cash flow interest rate risk is mainly concentrated on the fluctuation of interest rates on bank balances. Our directors consider that the exposure of cash flow interest rate risk arising from variable-rate bank balances is insignificant.
Other Price Risk
We are exposed to other price risk arising from convertible preferred shares and the investment in market fund in the U.S. No sensitivity analysis with respect to our investment in market fund in the U.S. is performed as our directors consider that the exposure of other price risk arising from the investment in market fund in the US is insignificant because the investment is mainly on US treasury bonds with high credit rating and liquidity.
Credit and Counterparty Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to us. In order to minimize the credit risk, our directors review the recoverable amount of each individual debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, our directors consider that our credit risk is significantly reduced.
14
Liquidity Risk
As of June 30, 2023, we recorded net assets of $55.7 million. In the management of liquidity risk, our directors have reviewed our cash flow projections to ensure we maintain a level of cash and cash equivalents deemed adequate by the management to finance our operations and mitigate the effects of fluctuations in cash flows.
The following table details the remaining contractual maturity for our non-derivative financial liabilities and lease liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which we can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are a floating rate, the undiscounted amount is derived from the interest rate at the end of each reporting period.
(In thousands of US$, except percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted average |
|
% |
|
On demand or less than 1 month |
|
|
1 to 3 months |
|
|
3 months to 1 year |
|
|
1 to 2 years |
|
|
2 to 4 years |
|
|
Total undiscounted cash flows |
|
|
Carrying amount |
|
|||||||
June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Convertible Preferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Shares (note) |
|
12 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Other Payables |
|
N/A |
|
|
— |
|
|
|
9,222 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,222 |
|
|
|
9,222 |
|
Financial liabilities |
|
N/A |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
|
|
— |
|
|
|
9,222 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,222 |
|
|
|
9,222 |
|
Lease liabilities |
|
5.42 |
|
|
— |
|
|
|
— |
|
|
|
385 |
|
|
|
294 |
|
|
|
— |
|
|
|
678 |
|
|
|
678 |
|
15
Exhibit 99.3
Apollomics Reports First Half 2023 Financial Results and Provides Corporate Update
Phase 2 data from vebreltinib (APL-101), a highly selective cMet inhibitor, in patients with NSCLC with MET exon14 skipping mutation expected second half 2023
Approximately $52.6 million in cash, cash equivalents, and investments at June 30, 2023; Cash runway to mid-year 2024
Debuted as a publicly traded targeted oncology company March 30, 2023
Management to host conference call Monday, October 2, 2023 at 8:30 a.m. ET
FOSTER CITY, CALIF. – September 28, 2023 – Apollomics Inc. (Nasdaq: APLM) (the “Company”), a late-stage clinical biopharmaceutical company developing multiple oncology drug candidates to address difficult-to-treat and treatment-resistant cancers, today announced its financial results for the six months ended June 30, 2023, and provided a corporate update.
“The first half of 2023 was a period of significant accomplishment, culminating in the completion of our business combination and listing on Nasdaq, which positions us well to advance our lead product candidate, vebreltinib, in non-small cell lung cancer and other solid tumors with MET dysregulation, as well as other product candidates in development,” said Guo-Liang Yu, Ph.D., Chairman and Chief Executive Officer of Apollomics. “We remain on track to generate key clinical data across our pipeline later this year and into 2024, including for our two late-stage candidates, vebreltinib and uproleselan.”
Pipeline Update
1
Business Highlights
First Half 2023 Financial Results
2
First Half 2023 Financial Results Conference Call
Apollomics’ management team will host a conference call and webcast at 8:30 a.m. ET to discuss the financial results and provide a corporate update.
A live webcast will be available at https://ir.apollomicsinc.com/news-events/events
Participants may also pre-register any time before the call here. Once registration is completed, participants will be provided a dial-in number with a personalized conference code to access the call. Please dial in 15 minutes prior to the start time.
About Apollomics Inc.
Apollomics Inc. is an innovative clinical-stage biopharmaceutical company focused on the discovery and development of oncology therapies with the potential to be combined with other treatment options to harness the immune system and target specific molecular pathways to inhibit cancer. Apollomics currently has a pipeline of nine drug candidates across multiple programs, six of which are currently in the clinical stage of development. Apollomics’ lead programs include investigating its core product, vebreltinib (APL-101), a potent, selective c-Met inhibitor for the treatment of non-small cell lung cancer and other advanced tumors with c-Met alterations, which is currently in a Phase 2 multicohort clinical trial in the United States, and developing an anti-cancer enhancer drug candidate, uproleselan (APL-106), a specific E-Selectin antagonist that has the potential to be used adjunctively with standard chemotherapy to treat acute myeloid leukemia (AML) and other hematologic cancers, which is currently in a Phase 3 bridging clinical trial in China. Outside of China, enrollment is complete utilizing uproleselan in combination with standard chemotherapy in a Phase 3 trial sponsored by GlycoMimetics in relapsed or refractory AML and a Phase 2/3 trial sponsored by the U.S. National Cancer Institute in first-line AML.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes statements that constitute “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of present or historical fact included in this press release, regarding the Company’s future financial performance, as well as the Company’s strategy, future operations, revenue guidance, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Apollomics cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult
3
to predict and many of which are beyond the control of Apollomics. In addition, Apollomics cautions you that the forward-looking statements contained in this press release are subject to unknown risks, uncertainties and other factors, including: (i) the impact of any current or new government regulations in the United States and China affecting Apollomics’ operations and the continued listing of Apollomics’ securities; (ii) the inability to achieve successful clinical results or to obtain licensing of third-party intellectual property rights for future discovery and development of Apollomics’ oncology projects; (iii) the failure to commercialize product candidates and achieve market acceptance of such product candidates; (iv) the failure to protect Apollomics’ intellectual property; (v) breaches in data security; (vi) risks related to the ongoing COVID-19 pandemic and response; (vii) the risk that Apollomics may not be able to develop and maintain effective internal controls; (viii) unfavorable changes to the regulatory environment; and those risks and uncertainties discussed in the Annual Report on Form 20-F and Registration Statement on Form F-1 (as amended or supplemented from time to time) filed by Apollomics, Inc. with the U.S. Securities and Exchange Commission (“SEC”) under the heading “Risk Factors” and the other documents filed, or to be filed, by the Company with the SEC. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. Should one or more of the risks or uncertainties described in this press release materialize or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. New risk factors that may affect actual results or outcomes emerge from time to time and it is not possible to predict all such risk factors, nor can Apollomics assess the impact of all such risk factors on its business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in the reports that Apollomics has filed and will file from time to time with the SEC. These SEC filings are available publicly on the SEC’s website at www.sec.gov. Apollomics undertakes no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If Apollomics updates one or more forward-looking statements, no inference should be drawn that Apollomics will make additional updates with respect to those or other forward-looking statements.
CONTACTS
Investor Relations
Peter Vozzo
ICR Westwicke
Peter.Vozzo@westwicke.com
+1-443-213-0505
Media Relations
Sean Leous
ICR Westwicke
Sean.Leous@westwicke.com
+1-646-866-4012
4
APOLLOMICS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE
LOSS (UNAUDITED)
(All amounts in thousands of US$, except for per share data)
|
Six Months Ended June 30, |
|
|
2023 |
2022 |
|
US$ |
US$ |
Other income |
401 |
756 |
Foreign exchange gains and (losses) |
(2,104) |
(725) |
Fair value change of financial assets at FVTPL |
460 |
32 |
Fair value change of financial liabilities at FVTPL |
676 |
— |
Fair value change of convertible preferred shares |
(76,430) |
23,669 |
Research and development expenses |
(16,108) |
(17,999) |
Administrative expenses |
(9,652) |
(5,097) |
Finance costs |
(60) |
(44) |
Other expense |
(47,457) |
(4,008) |
Loss before taxation |
(150,684) |
(3,416) |
Income tax expenses |
(10) |
(1) |
Loss and total comprehensive loss for the period, net of taxation, attributable to owners of the Company |
(150,694) |
(3,417) |
Loss per share |
|
|
Basic loss per common share (US$) |
(2.55) |
(0.12) |
Diluted loss per common share (US$) |
(2.55) |
(0.68) |
Weighted average number of common shares outstanding - Basic ('000) |
59,000 |
27,982 |
Weighted average number of common shares outstanding - Diluted ('000) |
59,000 |
46,364 |
5
APOLLOMICS INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(All amounts in thousands of US$)
|
As of June 30, 2023 (Unaudited) |
As of December 31, 2022 |
|
US$ |
US$ |
Non-current assets |
|
|
Plant and equipment, net |
439 |
485 |
Right-of-useassets |
678 |
991 |
Intangible assets |
14,767 |
14,778 |
Rental deposits |
119 |
124 |
Time deposits with maturity greater than twelve months |
— |
4,307 |
Total non-current assets |
16,003 |
20,685 |
|
|
|
Current assets |
|
|
Deposits,prepayments and deferred expenses |
2,759 |
1,176 |
Financial assets at fair value through profit and loss ("FVTPL") |
20,400 |
19,067 |
Time deposits with maturity less than twelve months |
6,920 |
2,872 |
Cash and cash equivalents |
25,296 |
32,675 |
Total current assets |
55,375 |
55,790 |
|
|
|
Total assets |
71,378 |
76,475 |
|
|
|
Current liabilities |
|
|
Other payables and accruals |
12,804 |
11,675 |
Accounts payable and accrued offering costs |
947 |
— |
Financial liabilities arising from unvested restricted shares |
— |
68 |
Lease liabilities |
385 |
614 |
Total current liabilities |
14,136 |
12,357 |
|
|
|
Net current assets |
41,239 |
43,433 |
|
|
|
Total assets less current liabilities |
57,242 |
64,118 |
|
|
|
Non-current liabilities |
|
|
Lease liabilities |
294 |
377 |
Warrant liabilities |
1,251 |
— |
Convertible preferred shares |
— |
511,861 |
Total non-current liabilities |
1,545 |
512,238 |
|
|
|
Net assets (liabilities) |
55,697 |
(448,120) |
|
|
|
Equity |
|
|
Share capital |
— |
3 |
Apollomics class A ordinary shares |
1 |
— |
Apollomics class B ordinary shares |
8 |
— |
Treasury shares |
— |
(68) |
Share premium |
661,472 |
12,317 |
Reserves |
19,312 |
14,228 |
Accumulated losses |
(625,096) |
(474,600) |
Total equity (deficit) |
55,697 |
(448,120) |
6