ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that impact our business. In particular, we encourage you to review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A in this Annual Report on Form 10-K. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this report. These forward-looking statements are made as of the date of this management’s discussion and analysis, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. All references to “dollar” or the use of the symbol “$” are to United States dollars, unless otherwise indicated.
Aptose Biosciences Inc.
Overview
Aptose is a science-driven, clinical-stage biotechnology company dedicated to developing and commercializing precision medicines that address unmet clinical needs in oncology, with an initial focus on hematology. The Company's small molecule cancer therapeutics pipeline includes products designed to deliver single-agent efficacy and to boost the effectiveness of other anti-cancer therapies and regimens without overlapping toxicities. The company's executive offices are located in San Diego, California, and its head office is based in Toronto, Canada.
Proposed Plan of Arrangement
On November 18, 2025, the Company entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Hanmi Pharmaceutical Co. Ltd. ("Hanmi") and HS North America Ltd., a wholly owned subsidiary of Hanmi (“Hanmi Purchaser” and together with Hanmi, the "Hanmi Purchasers") pursuant to a plan of arrangement of the Company under the Canada Business Corporations Act (the "Arrangement") whereby Hanmi Purchaser will acquire all of the issued and outstanding common shares of the Company ("Common Shares") that are not currently owned or controlled by the Hanmi Purchasers or their respective affiliates. Pursuant to the Arrangement, each shareholder of the Company will receive an amount in cash equal to C$2.41 for each common share of the Company held by such shareholder. All incentive securities and warrants of the Company, whether vested or unvested, outstanding on the effective date of the Arrangement shall be deemed (i) cancelled and/or (ii) surrendered and cancelled and each holder of options, RSUs or warrants shall cease to be a holder of such options, RSUs or warrants. Following the completion of the Arrangement, the Company’s securities will be delisted from the Toronto Stock Exchange.
On February 23, 2026, the Arrangement Agreement was amended and restated to among other things, extend the outside date for completing the Arrangement from March 15, 2026 to June 30, 2026 (the amended and restated Arrangement Agreement is referred to herein as the Arrangement Agreement). On March 31, 2026, shareholders of the Company approved the Arrangement at a special meeting of shareholders held for such purpose. In connection with the Arrangement, the Company will continue from the Canada Business Corporations Act to the Business Corporations Act (Alberta). The Arrangement is expected to close in the first half of 2026, subject to the satisfaction of customary closing conditions.
Business and Programs
Tuspetinib, (“Tuspetinib” or “TUS”), Aptose’s lead program, is being developed for frontline combination therapy in newly diagnosed acute myeloid leukemia (“AML”) patients to unlock the most significant patient impact and greatest commercial opportunity. AML is a highly aggressive cancer of the bone marrow and blood, and there is a tremendous unmet need for a therapy that can extend survival of newly diagnosed AML patients and improve their quality of life. Newly diagnosed AML patients typically fail all frontline (1L) therapies, and responses to subsequent salvage therapies in the relapsed or refractory (R/R) setting are limited, highlighting the need for a more effective triple drug (“triplet”) combination therapy to increase survival in the frontline setting.
Current standard of care treatment in the 1L setting for many newly diagnosed AML patients includes a doublet combination of venetoclax and a hypomethylating agent (VEN+HMA). Exploratory triplet therapies using current agents added to VEN+HMA have achieved notable response rates but are compromised because of toxicities and the
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limited activity across subpopulations of AML patients. In contrast, tuspetinib is a convenient, orally administered, once-daily kinase inhibitor that targets select kinases operative in AML and exerts broad activity across AML populations with adverse genetics. However, tuspetinib avoids kinases that typically cause toxicities associated with other kinase inhibitors and has demonstrated an excellent safety profile. These properties position tuspetinib as an ideal agent to add to the VEN+HMA backbone, creating a superior triplet (TUS+VEN+HMA) frontline therapy for newly diagnosed AML.
Aptose is currently conducting a Phase1/2 clinical trial to develop Tuspetinib in the TUS+VEN+HMA triplet drug combinations in newly diagnosed AML patients, and as the study enrolls patients, we have delivered and expect to continue to deliver important clinical data (CR and MRD negativity rates, safety, and survival) over the following 6 to 12 months. It was essential to understand the safety, tolerability, and response activities of tuspetinib as a single agent and as the TUS+VEN doublet combination before advancing to the TUS+VEN+HMA triplet. We therefore performed a clinical trial of TUS as a single agent in patients with relapsed or refractory (R/R) AML, then performed a trial of TUS+VEN doublet therapy in R/R AML patients, and have now advanced the TUS+VEN+HMA frontline therapy into newly diagnosed AML patients.
To be precise, we have now completed a dose escalation and dose exploration international Phase 1/2 clinical trial to assess the safety, tolerability, pharmacokinetics, pharmacodynamic responses, and efficacy of TUS as a single agent in patients with R/R AML. Significant bone marrow blast reductions and clinical responses without dose limiting toxicities were achieved at four dose levels across a broad diversity of mutationally-defined AML populations and with a highly favorable safety profile. Tuspetinib has demonstrated a favorable safety profile to date and has caused no drug-related QTc prolongations, liver or kidney toxicities, muscle damage, or differentiation syndrome, and no myelosuppression with continuous dosing of patients in remission. At a dose of 80 mg, tuspetinib demonstrated notable response rates in R/R AML patients that had never been treated with venetoclax (VEN-naive AML): CR/CRh=36% among all-comers, CR/CRh=50% among patients with mutated FLT3, and CR/CRh=25% in patients with wildtype FLT3.
After completing the single-agent dose escalation and exploration trial, tuspetinib advanced to the APTIVATE expansion trial of the Phase 1/2 program to evaluate the TUS+VEN doublet in relapsed/refractory (R/R) AML patient populations. The TUS+VEN doublet combination therapy maintained a favorable safety profile no new or unexpected safety signals were observed, and there were no reported drug-related adverse events involving QTc prolongation, differentiation syndrome, or deaths. The TUS+VEN doublet combination also achieved significant bone marrow reductions and clinical responses in heavily pretreated R/R AML patients, including those with mutated TP53, mutated NKRAS, wildtype or mutated FLT3, and those who had failed prior therapy with venetoclax (“Prior-VEN”) or FLT3 inhibitors (“Prior-FLT3i”).
Collectively, the clinical safety and efficacy data with TUS single agent and TUS+VEN doublet in R/R AML patients position tuspetinib for development as the TUS+VEN+HMA triplet in newly diagnosed AML patients. Newly diagnosed AML patients are VEN-naïve, FLT3i-naïve, and HMA-naïve – this patient population is expected to be highly responsive to a tuspetinib-containing triplet therapy. Based on the safety and efficacy profile of tuspetinib, we believe that tuspetinib as part of the TUS+VEN+HMA triplet, if approved, could establish a new standard of care therapy for newly diagnosed patients with mutated or unmutated FLT3 and in patients with other adverse genetic abnormalities. These beliefs related to the potential patient treatment and commercial opportunities are based on management’s current assumptions and estimates, which are subject to change, and there can be no assurance that tuspetinib will ever be approved or successfully commercialized and, if approved and commercialized, that it will ever generate significant revenues. See our “Risk Factors – “We are an early-stage development company with no revenues from product sales.” and “We have a history of operating losses. We expect to incur net losses and we may never achieve or maintain profitability.” in this Annual Report on Form 10-K.
Tuspetinib
Indication and Clinical Trials:
Tuspetinib is an oral, highly potent, small molecule inhibitor of kinases operative in myeloid malignancies and known to be involved in tumor proliferation, resistance to therapy and differentiation. Preclinical in vitro and in vivo studies suggest that Tuspetinib may be an effective monotherapy and combination therapy in patients with hematologic malignancies, including AML. A U.S.-based Phase 1/2 clinical trial of the TUS+VEN+HMA triplet drug
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combinations in newly diagnosed AML patients is currently underway. An international Phase 1/2 clinical trial has been completed in patients with relapsed or refractory AML, in which patients received either TUS single agent or the TUS+VEN doublet. That study delivered evidence of robust clinical activity, including multiple complete responses in R/R AML patients with various disease genotypes, and no toxicity trends that prevented advancement of TUS into the TUS+VEN+AZA triplet clinical study.
The FDA granted orphan drug designation to tuspetinib for the treatment of patients with AML in October 2018. Orphan drug designation is granted by the FDA to encourage companies to develop therapies for diseases that affect fewer than 200,000 people in the United States. Orphan drug status provides research and development tax credits, an opportunity to obtain grant funding, exemption from FDA application fees and other benefits. The orphan drug designation also provides us with seven additional years of marketing exclusivity in this indication.
On December 3, 2024, the Company announced that the National Cancer Institute (NCI), part of the National Institutes of Health, and Aptose Biosciences Inc. have entered into a Cooperative Research and Development Agreement (“CRADA”). Under the CRADA, the NCI and Aptose will collaborate on the clinical development of Aptose’s proprietary lead clinical-stage compound tuspetinib (TUS), an inhibitor of key signaling kinases involved in myeloid malignancies, in the NCI Cancer Therapy Evaluation Program (CTEP) sponsored MyeloMATCH trials employing combinations of targeted therapy for the treatment of molecularly defined acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS) populations. These trials will be conducted by NCI’s National Clinical Trials Network (NCTN), with the participation of the NCI Community Oncology Research Program (NCORP) in the U.S. and Canada.
The MyeloMATCH precision medicine trials (NCT05564390), funded by the NCI, were officially launched on May 16, 2024. MyeloMATCH aims to expedite the development of tailored drug combination treatments for patients with newly diagnosed AML and MDS and to treat patients with these aggressive cancers of the blood and bone marrow from diagnosis throughout their treatment journey.
Manufacturing:
Following the Tuspetinib licensing agreement between Aptose and Hanmi on November 4, 2021 (the “Tuspetinib Licensing Agreement”), Aptose received from Hanmi an existing inventory of drug product expected to support continuation of the current Phase 1/2 study. The Company and Hanmi also entered into a separate supply agreement in 2022 for additional production of new drug substance and drug product to support further clinical development. Additional batches of API and drug product have been produced by other companies during 2022 and 2023.
Program Updates at Recent Scientific Forums:
On December 6, 2025, Aptose presented additional data from the ongoing TUSCANY trial of tuspetinib in combination with venetoclax and azacitidine (TUS+VEN+AZA) in a poster at the 67th American Society of Hematology (ASH) Annual Meeting in Orlando, Florida. Aptose reported that the TUS+VEN+AZA triplet frontline therapy shows high efficacy and MRD-negative remissions in newly diagnosed AML patients with diverse mutations. They also highlighted that safety remains a key feature of TUS-based therapies, with a 100% response rate (CR/CRh) at the higher dose levels (80 and 120 mg TUS). Complete responses (CR/CRh) were observed in FLT3 wildtype patients, who make up about 70% of AML cases, and also in AML patients with TP53/complex karyotype, RAS, and MDS-related mutations.
Key Messages included:
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In newly diagnosed AML patients, TUS+VEN+AZA shows promising safety, tolerability and resilient efficacy, including MRD-negative remissions across a broad mutational spectrum
•
High quality clinical responses (CR/CRh):
o
90% across 40, 80 and 120 mg dose levels
o
100% at the higher 80 mg and 120 mg dose levels
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o
Observed in FLT3-WT, FLT3-ITD, and NPM1c genetic subgroups
o
Observed in biallelic TP53/complex karyotype and RAS adverse genetic subgroups
o
Observed in AML with MDS-related mutations
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MRD negativity: 78% by central flow cytometry in responding subjects
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TUS targets VEN resistance mechanisms; inhibits kinase-driven abnormal signaling
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Two subjects transitioned to stem cell transplantation, and both returned for TUS maintenance
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TUS+VEN+AZA triplet therapy was well tolerated with no dose-limiting toxicities (DLTs) across all evaluable TUS dose levels
o
No DLTs including no prolonged myelosuppression for subjects in remission in Cycle 1
o
No drug-related deaths, differentiation syndrome, QTc prolongation, or CPK elevation reported
o
8/10 evaluable subjects experienced red cell and platelet transfusion independence for > 8 weeks after their best response
o
Febrile neutropenia was reported in 2 subjects (16.7%), with 1 subject related to TUS
•
At the recently enrolled 160 mg dose level, preliminary findings show patients achieving early blast clearance with MRD-negativity and formal responses in the first few weeks of treatment (not included in poster data cut)
On October 16, 2025, Aptose announced that Tuspetinib exceeded expectations when combined with standard of care treatment across diverse populations of newly diagnosed AML patients. Aptose announced that data from the ongoing TUSCANY trial of tuspetinib in combination with venetoclax and azacitidine (TUS+VEN+AZA) were presented in a poster presentation, entitled “TUSCANY Study of Safety and Efficacy of Tuspetinib plus Standard of Care Venetoclax and Azacitidine in Study Participants with Newly Diagnosed AML Ineligible for Induction Chemotherapy,” at the European School of Haematology (ESH) 7th International Conference on Acute Myeloid Leukemia “Molecular and Translational”: Advances in Biology and Treatment, being held from October 16-18, 2025 in Estoril, Portugal. Data to date from 10 patients in the TUSCANY trial across all three cohorts, 40 mg, 80 mg or 120 mg TUS dose in TUS+VEN+AZA, reveal promising clinical safety and antileukemic activity and support the use of TUS with standard of care treatment across a broad range of AML populations, including those carrying adverse mutations regardless of FLT3 mutation status.
Key Messages included:
•
TUS in combination with standard dosing of VEN+AZA has been well tolerated with no DLT, no treatment-related deaths, no differentiation syndrome, no QTc prolongation, no prolonged myelosuppression after remission in Cycle 1, and no CPK elevations reported at any dose levels to date in these newly diagnosed AML patients.
•
Addition of TUS to VEN+AZA achieved CR/CRh responses in 6/6 (100%) patients treated at the higher dose levels of 80 mg and 120 mg TUS, exceeding the 66% rate expected from VEN+AZA alone.
•
Overall, TUS+VEN+AZA CR/CRh responses were observed in 9/10 (90%) patients.
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7 of 8 (88%) CR/CRh responses in FLT3 wildtype AML, representing 70% of AML population.
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TUS+VEN+AZA MRD-negativity noted in 7/9 (78%) responding patients by central flow cytometry.
•
CR/CRh responses achieved across diverse mutational subtypes, including: unmutated FLT3, FLT3-ITD, NPM1c, biallelic TP53 with complex karyotype, RAS, and myelodysplasia-related mutations.
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Dosing at the TUS 160 mg level is now ongoing.
On August 6, 2025, Aptose announced that the Cohort Safety Review Committee (the "CSRC") monitoring Aptose’s Phase 1/2 TUSCANY trial of TUS in combination with standard of care dosing of venetoclax and azacitidine (TUS+VEN+AZA triplet) has approved escalating from 120 mg TUS dose to 160 mg TUS dose based on its favorable
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review of safety and efficacy data from patients in the first three cohorts (40 mg, 80 mg, and 120 mg TUS dose levels) of the trial. Enrollment is open for dosing subjects at the 160 mg TUS dose level.
Key Messages included:
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Safety Review Committee endorses escalation to 160 mg TUS dosing.
•
Cohorts with 120 mg, 80 mg, 40 mg TUS dosing completed with no dose-limiting toxicities.
•
Excellent safety and complete remissions (CRs) in some of the most difficult-to-treat AML populations.
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No dose reductions required to the standard-of-care VEN/AZA with TUS dose cohorts.
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TUS+VEN+AZA triplet continues to achieve CRs and minimal residual disease (MRD)-negativity with favorable safety in newly diagnosed AML patients.
On June 12, 2025, Aptose presented clinical data on safety, response, and MRD-negativity from the TUSCANY Phase 1/2 clinical trial of Tuspetinib triplet therapy in newly diagnosed AML patients during an oral presentation at the European Hematology Association Congress (EHA 2025), held from June 12-15, 2025, in Milan, Italy. The title of the presentation was “TUSCANY Study of Safety and Efficacy of Tuspetinib Plus Standard of Care Venetoclax and Azacitidine in Study Participants with Newly Diagnosed AML Ineligible for Induction Chemotherapy”. Dr. Gabriel Mannis, Associate Professor of Medicine, Stanford University School of Medicine, key opinion leader (KOL) in the treatment of AML, and an investigator in the TUSCANY study, delivered the oral presentation and reported safety and efficacy data from the first two dose cohorts at 40 mg of TUS or 80 mg of TUS in the TUS+VEN+AZA triplet. Dr. Mannis also noted that three patients were rapidly enrolled on the third dose cohort of 120 mg TUS in the TUS+VEN+AZA triplet, and that no DLTs have been observed to date. The oral presentation also included minimal residual disease (MRD-negativity) assessments and a longer duration of follow-up.
The TUS+VEN+AZA triplet is being developed as a mutation-agnostic frontline therapy to treat large, mutationally diverse populations of newly diagnosed AML patients who are ineligible to receive induction chemotherapy. The data presented reveal complete responses across patients with diverse mutations, including TP53-mutated/CK AML and FLT3-wildtype AML patients. TUS could have a significant commercial opportunity in the largest markets and the most challenging of AML cases, following regulatory clearance.
Key Messages included:
•
Addition of TUS to the standard of care VEN+AZA creates a well-tolerated and mutation-agnostic frontline triple drug therapy for newly diagnosed AML patients.
•
AML patients with diverse mutations, including TP53-mutated/CK and FLT3-wildtype, safely achieved complete remissions and MRD negativity.
•
Ten AML patients dosed across 40 mg, 80mg, and 120 mg TUS with TUS+VEN+AZA triplet.
Key Findings included:
•
As of June 30, 2025, ten newly diagnosed AML patients received the TUS+VEN+AZA combination:
o
Four received the 40 mg dose of TUS, three received the 80 mg dose of TUS, and three received the 120 mg dose of TUS
•
At the initial dose of 40 mg TUS (n=4), with patients on the longest duration of drug:
o
Three subjects achieved CRs and were MRD-negative, including
▪
Patient with FLT3-ITD
▪
Patient with FLT3-WT
▪
Patient with TP53/CK
•
At the 80 mg TUS dose level (n=3):
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o
All three patients (100%) achieved composite complete remissions (CR and CRi)
o
A TP53-mutated/CK AML patient achieved an CRh
o
Too early in treatment for final MRD assessment
•
At the 120 mg TUS dose level (n=3):
o
All three patients at the 120 mg TUS dose level remain on therapy
o
All three patients (100%) already achieved composite complete remissions (CR and CRi)
o
Too early in treatment for formal MRD assessments
•
Regardless of mutation status, TUS is active in newly diagnosed AML patients
o
MRD-negative responses achieved across diverse genetic populations, including adverse TP53 mutations and CK
o
Responses continue to evolve, and the triplet continues to be well tolerated with no DLTs
•
TUS can be administered safely with standard-of-care dosing of VEN/AZA
o
TUS PK properties not altered by VEN, AZA, antifungals or food
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No prolonged myelosuppression in Cycle 1 in the absence of AML
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No treatment-related deaths; 9 out of 10 enrolled subjects remain on study
o
No treatment-related QTc prolongation, CPK elevations, or differentiation syndrome
On February 20, 2025, Aptose announced that the CSRC monitoring Aptose’s Phase 1/2 TUSCANY trial of tuspetinib in combination with standard of care dosing of venetoclax and azacitidine (TUS+VEN+AZA triplet) has unanimously approved escalating from a 40 mg dose of TUS to an 80 mg dose of TUS based on its favorable review of data from the first four patients in the trial. No significant safety concerns or dose-limiting toxicities (DLTs) have been reported, including no prolonged myelosuppression of subjects in remission. All four subjects treated in the 40 mg cohort remain on study, while enrollment is open for the 80 mg dose cohort.
Key Findings and Messages included:
•
To date, four newly diagnosed AML patients have received the lowest dose of TUS (40 mg) as part of the (TUS+VEN+AZA) combination.
•
Three patients with unmutated (wild-type) FLT3 (FLT3-WT) completed Cycle 1 of treatment with no dose-limiting toxicities (DLTs) or TUS dose adjustments.
o
Two FLT3-WT patients achieved complete remissions (CR and CRh) by the end of Cycle 1.
o
Notably, a patient with biallelic TP53 mutations and a complex karyotype obtained CR.
o
The third FLT3-WT patient experienced significant reductions in bone marrow leukemic blasts during Cycle 1 and remains on therapy in Cycle 2.
•
The fourth patient, harboring FLT3-ITD and NPM1 mutations, is currently dosing in Cycle 1 and is not yet eligible for response evaluation.
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Pharmacokinetic (PK) analyses of TUS show that plasma levels are unaffected by the addition of AZA, providing predictability and avoiding the need for dose alterations due to PK interactions.
•
Similarly, VEN plasma levels in Cycle 1 are consistent with published results and the prior TUS/VEN APTIVATE study in R/R AML, indicating no clinically significant interactions with TUS.
On February 12, 2025, Aptose reported early safety and response results from Aptose’s Phase 1/2 TUSCANY trial with a 40 mg dose of tuspetinib in combination with standard of care dosing of venetoclax and azacitidine
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(TUS+VEN+AZA triplet) in mutationally diverse populations of newly diagnosed AML patients who are ineligible to receive induction chemotherapy.
Key Findings and Messages included:
•
In January 2025, Aptose announced the initiation of the TUSCANY trial and dosing in the first cohort of newly-diagnosed AML patients with the lowest starting dose (40 mg) of TUS as part of the TUS+VEN+AZA triplet, and the early data reveal promising clinical safety and antileukemic activity.
•
Four newly diagnosed AML patients have received the lowest dose of TUS (40 mg) as part of the (TUS+VEN+AZA) combination.
•
Three patients with unmutated (wild-type) FLT3 (FLT3-WT) completed Cycle 1 of treatment with no dose-limiting toxicities (DLTs) and no dose adjustments.
o
Two FLT3-WT patients achieved complete remissions (CR and CRh) by the end of Cycle 1.
o
Notably, a patient with biallelic TP53 mutations and a complex karyotype obtained CR.
o
The third FLT3-WT patient experienced significant reductions in bone marrow leukemic blasts during Cycle 1 and remains on therapy in Cycle 2.
•
The fourth patient, harboring FLT3-ITD and NPM1 mutations, is currently dosing in Cycle 1 and is not yet eligible for response evaluation.
•
Pharmacokinetic (PK) analyses for TUS show that plasma levels are unaffected by the addition of AZA, providing predictability and avoiding the need for dose adjustments due to PK interactions.
On January 20, 2025, Aptose announced that the CSRC monitoring Aptose’s Phase 1/2 TUSCANY trial of tuspetinib in combination with standard of care dosing of venetoclax and azacitidine (TUS+VEN+AZA triplet) has unanimously approved escalating from 40 mg TUS to 80 mg TUS based on its favorable review of data from the first four patients in the trial. No significant safety concerns or dose limiting toxicities (DLTs) have been reported, including no prolonged myelosuppression of subjects in remission. All four subjects treated in the 40 mg cohort remain on study while enrollment is open for the 80 mg cohort.
Key Findings and Messages included:
•
To date, four newly diagnosed AML patients have received the lowest dose of TUS (40 mg) as part of the (TUS+VEN+AZA) combination.
•
Three patients with unmutated (wildtype) FLT3 (FLT3-WT) completed Cycle 1 of treatment with no dose-limiting toxicities (DLTs) and no TUS dose adjustments.
o
Two FLT3-WT patients achieved complete remissions (CR and CRh) by the end of Cycle 1.
o
Notably, a patient with biallelic TP53 mutations and a complex karyotype obtained CR.
o
The third FLT3-WT patient experienced significant reductions in bone marrow leukemic blasts during Cycle 1 and remains on therapy in Cycle 2.
•
The fourth patient, harboring FLT3-ITD and NPM1 mutations, is currently dosing in Cycle 1 and is not yet eligible for response evaluation.
•
Pharmacokinetic (PK) analyses for TUS show plasma levels unaffected by the addition of AZA, providing predictability and avoiding the need for dose alterations due to PK interactions.
•
Similarly, VEN plasma levels in Cycle 1 are consistent with published results and the prior TUS/VEN APTIVATE study in R/R AML, indicating no clinically significant interactions with TUS.
On January 12, 2025, Aptose announced promising early safety and response results from newly diagnosed acute myeloid leukemia (AML) patients dosed in Aptose’s Phase 1/2 TUSCANY trial with a 40 mg dose of tuspetinib
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in combination with standard of care dosing of venetoclax and azacitidine (TUS+VEN+AZA triplet). The TUS+VEN+AZA triplet is being developed as a frontline therapy to treat large, mutationally diverse populations of newly diagnosed AML patients who are ineligible to receive induction chemotherapy.
On January 9, 2025, Aptose announced dosing the first set of patients in the TUSCANY Phase 1/2 study with tuspetinib (TUS) in combination with venetoclax (VEN) and azacitidine (AZA) as a frontline triple drug combination (triplet) therapy for patients newly diagnosed with acute myeloid leukemia, or AML.
In December 2024, Aptose attended the 66th Annual American Society of Hematology (ASH) Meeting and Exposition in San Diego, California, and presented a poster entitled “Phase 1 Safety and Efficacy of Tuspetinib Plus Venetoclax Combination Therapy in Study Participants with Relapsed or Refractory Acute Myeloid Leukemia (AML) Support Exploration of Triplet Combination Therapy of Tuspetinib Plus Venetoclax and Azacitidine for Newly Diagnosed AML”.
Key Findings and Messages included:
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TUS+VEN+AZA triplet trial is proceeding in newly diagnosed AML patients
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TUS+VEN retains activity in the difficult-to-treat prior-VEN AML population
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TUS+VEN is active in FLT3 wildtype, representing ~70% of AML patients
•
TUS+VEN is well tolerated and can be safely co-administered
•
TUS+VEN is active across broad populations of R/R AML
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Combination of TUS with VEN may avoid VEN resistance
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TUS+VEN+AZA triplet may establish a more effective, mutation agnostic standard of care for chemotherapy ineligible AML patients
Highlights of the ASH poster presentation included:
TUS as Single Agent (n= 93 Patients)
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60% and 42% CR/CRh with 80 mg TUS in FLT3 mutated and all-comer VEN-naïve AML
•
33% CRc & 42% ORR (CR, CRp, CRh, CRi or PR) in FLT3 mutated and VEN-naïve patients
o
Includes 40, 80, 120, and 160 mg TUS dose as a single agent
o
Includes those who failed prior therapy with venetoclax
o
Includes those with mutated or unmutated FLT3, those who failed prior-HSCT, priorFLT3i, prior-chemotherapy, prior-HMA
o
TUS once daily orally as a single agent achieved CR/CRh responses at four different dose levels (40, 80, 120, and 160 mg) with no dose limiting toxicities (no DLTs)
o
TUS showed a favorable safety profile with no DLTs through 160 mg per day, and no drug related discontinuations, no QTc, no differentiation syndrome, and no deaths
TUS/VEN Combination Therapy (n= 79 Patients)
•
40% ORR with 80 mg TUS + 400 mg VEN in FLT3 mutated patients
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83% (5/6) had failed prior-VEN treatment and 50% (3/6) had failed both prior-VEN and FLT3i treatment
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TUS+VEN achieved responses among diverse R/R AML with adverse mutations in VEN-naïve, prior-VEN, FLT3WT, FLT3MUT, prior-FLT3
•
TUS+VEN showed favorable safety and tolerability with no new or unexpected safety
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On June 14, 2024, Aptose presented tuspetinib (TUS) clinical findings as a clinical poster presentation and preclinical findings as a e-poster at the European Hematology Association (EHA) 2024 Hybrid Congress in Madrid, Spain. Highlights of the findings include:
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Tuspetinib Monotherapy (TUS) and Tuspetinib + Venetoclax (TUS+VEN) Doublet Therapy Show Broad Clinical Activity and Strong Safety Data in relapsed or refractory (R/R) Acute Myeloid Leukemia (AML) and Differentiate TUS from other Investigational Drugs in AML
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TUS Monotherapy and TUS+VEN Doublet Therapy Active in Difficult-to-treat Genetic Subgroups, FLT3 Wildtype AML
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TUS Shown to Target VEN Resistance Mechanisms and Retain Activity on VEN-Resistant AML Cells in Preclinical Study
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Tuspetinib + Venetoclax + Azacitidine (TUS+VEN+AZA) Triplet Trial to Treat Newly Diagnosed AML Patients; Clinical Sites Being Activated
Our APTIVATE clinical trial of Tuspetinib as a monotherapy (TUS) and in combination treatment with Venetoclax (TUS+VEN) in a very ill AML patient population, yielded excellent and consistent safety findings and demonstrated clinical activity across a broad range of AML – including many with highly adverse genetic mutations. These findings supported the advancement of Tuspetinib as an ideal third agent to add to a venetoclax and hypomethylating agent regimen for the frontline treatment of Newly Diagnosed AML patients. Conclusions from the clinical poster, entitled “Safety and Efficacy of Tuspetinib as Monotherapy and Combined with Venetoclax in a Phase 1/2 Trial of Patients with Relapsed or Refractory (R/R) Acute Myeloid Leukemia” include:
•
Extensive dose exploration was performed with TUS (93 patients) and TUS+VEN (79 patients) in highly treatment experienced R/R AML patients (prior VEN, FLT3i, HMA, chemotherapy, HSCT).
•
TUS monotherapy achieved complete remissions at 40, 80, 120, and 160 mg with no DLT, achieved a 42% CRc and 50% ORR in VEN naïve and FLT3-mutation harboring patients, and achieved responses in patients harboring highly adverse genetics (TP53MUT, RASMUT, other).
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TUS+VEN Doublet remained safe and well tolerated (40mg TUS + 400mg VEN | 80mg TUS + 400mg VEN), and achieved bone marrow blast reductions and responses among diverse R/R AML patients with adverse mutations and prior failure of VEN.
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TUS targets known VEN resistance mechanisms in vitro and is clinically active in both FLT3MUT & FLT3WT R/R AML populations even after prior VEN exposure.
The greatest unmet medical need in AML is for an improved frontline therapy in Newly Diagnosed AML patients. Tuspetinib is now being developed as the TUS+VEN+HMA to establish a new standard of care for the treatment of these Newly Diagnosed AML patients that may increase response rates, extend survival, safely improve quality of life, treat a broad spectrum of genetically unique AML patient populations, and blunt the development of resistance to Venetoclax.
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Progress has been made with VEN+HMA in 1L therapy but 1/3 do not respond and median OS <15 months with <25% alive at 3-years.
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Response rates and OS need improvement, especially in adverse genetic subgroups
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Emergence of VEN resistance via RAS/MAPK, TP53, and FLT3 clonal expansion, among other mechanisms, leads to relapse or refractory (R/R) AML that does not respond well to subsequent salvage therapies in R/R setting. Indeed, a recent publication (Matthews et. Al.,Blood 2022; 140, Supplement 1: 1022–1024) showed survival of R/R AML patients receiving chemotherapy after failing prior therapy with HMA-VEN was limited; median OS was a mere 7.2 months, and for older patients (65 and older) the median OS was only 4.3 months
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These findings illustrate that adding a 3rd agent is needed to boost responses with VEN+HMA standard of care therapy in frontline therapy of newly diagnosed AML patients, to increase the durability of responses in these patients, and act across genetic subgroups of patients broadly.
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We believe Tuspetinib is the ideal 3rd Agent for Addition to VEN+AZA to Treat Newly Diagnosed AML
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TUS has excellent safety alone and in combination with VEN when co-administered
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TUS has broad activity across genetic subgroups including TP53, RAS/MAPK, & FLT3 mutants
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TUS mechanism may minimize drug resistance to VEN via inhibition of key AML kinases
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TUS can be administered with or without food allowing co-administration with VEN
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Preliminary PK data suggest no clinically meaningful interaction between TUS and VEN requiring dose modification for co-administration.
In addition to the Tuspetinib clinical poster, a separate preclinical abstract was published as an e-poster publication at EHA, entitled “Tuspetinib Retains Nanomolar Potency Against AML Cells Engineered to Express the NRAS G12D Mutation or Selected for Resistance to Venetoclax’. The study demonstrated that TUS targets known venetoclax (VEN) resistance mechanisms, retaining nanomolar potency against AML cells engineered to express the NRAS-G12D mutation or selected for resistance to VEN, and in combination with VEN, could prevent emergence of resistance to both agents. TUS-resistant cells showed hypersensitivity to VEN such that treatment with both drugs could also interfere with the emergence of TUS resistance.
On March 26, 2024, Aptose announced that more than 170 patients to date received TUS alone or in combination with the BCL-2 inhibitor venetoclax (VEN) during the Phase 1/2 clinical program in the very ill relapsed or refractory (R/R) AML patient population. At the single agent 80 mg dose, TUS achieved a favorable safety profile and an impressive response rate among patients who were naive to VEN. The safety profile of TUS remained favorable when TUS was combined with VEN in R/R AML patients, and responses were achieved in both patients naive to VEN and those who failed prior therapy with VEN. TUS avoids many typical toxicities observed with other agents and achieves broad activity across AML patients with a diversity of adverse genetic abnormalities.
On December 9, 2023, Aptose featured tuspetinib in an oral presentation at the 65th American Society of Hematology (ASH) Annual Meeting and Exposition. The company announced that a growing body of clinical data for its lead compound, tuspetinib, demonstrates significant benefit both as a single agent and in combination with venetoclax for patients with relapsed/refractory acute myeloid leukemia (R/R AML) in the ongoing APTIVATE Phase 1/2 study. The data were presented by lead investigator Naval G. Daver, M.D., Professor and Director of the Leukemia Research Alliance Program in the Department of Leukemia at The University of Texas MD Anderson Cancer Center, Houston TX.
Dr. Daver reported data from more than 100 relapsed/refractory patients from multiple international clinical sites, who had failed prior therapy and then were treated with TUS as a single agent or TUS+VEN. Both TUS and TUS+VEN delivered multiple composite complete remissions (CRc) in this very ill AML population, while maintaining a favorable safety profile across all treated patients. The data demonstrated tuspetinib is active and well tolerated in one of the most challenging and heterogeneous disease settings in oncology – relapsed and refractory AML. Tuspetinib demonstrated broad activity, including activity in patients with FLT3 wild-type AML (accounting for more than 70% of the AML population), FLT3 mutated AML, NPM1 mutated AML, as well as in patients with mutations historically associated with resistance to targeted therapy. Most notably, TUS targets VEN resistance mechanisms, enabling TUS+VEN uniquely to treat the very ill prior-VEN AML population, including both FLT3 mutant and FLT3 wildtype disease. From a broader perspective, the growing body of antileukemic activity and continued favorable safety profile support the advancement of tuspetinib in a TUS+VEN+HMA triplet for the treatment of frontline newly diagnosed AML patients.
Dr. Daver also pointed out that while patients on the TUS+VEN therapy are early in their treatment cycles, most achieving a response remained on treatment and that responses have begun to mature as dosing continues. Highlights of Dr. Daver’s ASH oral presentation include:
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As a single agent at therapeutic doses of 80-160 mg in 68 evaluable patients, TUS was more active in VEN-naive patients, with an overall CRc rate of 29% (8/28). This included a 42% CRc rate (5/12) in FLT3-mutated patients and a 19% CRc rate (3/16) in FLT3-unmutated, or wildtype, AML patients. Responses and blood counts improved with continuous dosing, many patients bridged to an allogeneic stem cell
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transplant ("HSCT"), durability was observed when HSCT was not performed, and 80 mg was selected as the RP2D. Overall, tuspetinib showed a favorable safety profile with only mild adverse events ("AEs") and no dose-limiting toxicities ("DLTs") up to 160 mg per day, and no drug discontinuations from drug-related toxicity.
•
In the TUS+VEN doublet study, 49 patients were dosed with 80 mg of tuspetinib and 200 mg of venetoclax, with 36 evaluable (and 13 patients too early to assess). Patients were heavily exposed to prior-VEN and prior-FLT3 inhibitor treatment. TUS+VEN was active in both VEN-naive and prior -VEN R/R AML patients. TUS demonstrated compelling composite complete remission (CRc) rates. Among all evaluable patients, TUS+VEN demonstrated a CRc rate of 25% (9/36); 43% (3/7) in VEN-naive patients, and 21% (6/29) in Prior-VEN patients. Among FLT3 wildtype patients, TUS+VEN demonstrated an overall CRc rate of 20% (5/25); 33% (2/6) in VEN-naive patients, and 16% (3/19) in Prior-VEN patients. Among FLT3 mutant patients, TUS+VEN demonstrated an overall CRc rate of 36% (4/11); a complete response in a VEN-naive patient (1/1); a 30% (3/10) in Prior-VEN patients; and 44% (4/9) in patients treated prior with a FLT3 inhibitor.
On October 29, 2023, Aptose presented two posters related to the clinical and preclinical activity of tuspetinib at the European School of Haematology 6th International Conference: Acute Myeloid Leukemia "Molecular and Translational": Advances in Biology and Treatment, held October 29-31, 2023, in Estoril, Portugal. Clinical findings included 1) data from the APTO-TUS-HV01 clinical trial (the "Food Effect Study") evaluating the pharmacokinetic (PK) properties of tuspetinib in healthy human volunteers in which tuspetinib was administered with or without food, and 2) from an international Phase 1/2 study of tuspetinib as a single agent (TUS) and in combination with venetoclax in patients with R/R AML from across clinical centers in the United States, South Korea, Spain, Australia and other sites. Data from the Food Effect Study in healthy human volunteers demonstrated tuspetinib can be administered with or without food and foresee no clinically meaningful difference in exposure. This is an important finding for patient convenience, as venetoclax is dosed with food and tuspetinib can now be co-administered with venetoclax rather than in staggered dosing. Findings from the Phase 1/2 clinical trial demonstrated that tuspetinib, as a single agent, was well-tolerated and highly active among R/R AML patients with a diversity of adverse genotypes and delivered a 42% CR/CRh cross-evaluable venetoclax (VEN) naive patients at the 80mg daily RP2D. The TUS+VEN doublet has been well tolerated in the APTIVATE international Phase 1/2 expansion trial in R/R AML patients and achieved multiple responses in patients who previously failed venetoclax ("Prior-VEN failure AML"), including Prior-VEN failure patients who also previously failed FLT3 inhibitors, all of whom represent emerging populations of high unmet medical need. Notably, tuspetinib targets mechanisms of venetoclax resistance that may re-sensitize patients with prior failure to venetoclax.
Separate from the clinical studies, the preclinical study (entitled: “Tuspetinib Oral Myeloid Kinase Inhibitor Creates Synthetic Lethal Vulnerability to Venetoclax”) presented by Aptose during the ESH Conference investigated the effects of tuspetinib on key elements of the phosphokinome and apoptotic proteome in both parental and TUS-resistant AML cells. In parental cells, tuspetinib inhibits key oncogenic signaling pathways and shifts the balance of pro- and anti-apoptotic proteins toward apoptosis, suggesting that it may create vulnerability to venetoclax. In addition, acquired resistance in AML cells to tuspetinib generated an unusually high synthetic lethal vulnerability to venetoclax. Concurrent administration of TUS+VEN, therefore, may discourage the emergence of resistance to tuspetinib during treatment.
In conjunction with poster presentations at the ESH Conference, on October 30, 2023, Aptose held a “Clinical Update and KOL Data Review of AML Drug Tuspetinib” that was webcast and featured Dr. Naval Daver, MD, Professor, Director Leukemia Research Alliance Program, Department of Leukemia, The University of Texas MD Anderson Cancer Center, Houston, Texas. Dr. Daver is the lead investigator on Aptose’s APTIVATE trial and is recognized for significant achievements in developing novel AML treatments, including several combination therapies. Aptose presented data in 49 patients who received the TUS+VEN doublet, showing an overall response rate ("ORR") of 48% among all patients that had achieved an evaluable stage, as well as a 44% ORR among Prior-VEN failure AML patients, including FLT3-unmutated ("wildtype") patients (43% ORR) and FLT3-mutated patients (60% ORR), some of whom also had failed prior therapy with FLT3 inhibitors. The TUS+VEN doublet was well tolerated with no unexpected safety signals. The TUS+VEN doublet may serve the Prior-VEN failure R/R AML patients that represent a rapidly growing population that is highly refractory to any salvage therapy. The compelling data with the
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TUS+VEN doublet in R/R AML patients suggest a TUS+VEN+HMA triplet may also serve the needs of frontline (1L) newly diagnosed AML patients.
Concurrent with the European Hematology Association (EHA) Annual Congress held June 8-11, 2023, Aptose held an interim clinical update webcast on June 10, 2023, to present highlights from the ongoing clinical development of tuspetinib. Aptose reported completion of the tuspetinib dose escalation and dose exploration Phase 1/2 trial in 77 R/R AML patients. Tuspetinib demonstrated a favorable safety profile, and tuspetinib delivered monotherapy responses across four dose levels with no dose-limiting toxicity in mutationally diverse and difficult to treat R/R AML populations, including patients with highly adverse mutations that typically do not respond to monotherapy or combination therapy: TP53-mutated patients with a CR/CRh = 20% and RAS-mutated patients with a CR/CRh = 22%. Aptose also reported completion of a successful End of Phase 1 Meeting with the US FDA for tuspetinib, that a monotherapy RP2D was selected as 80mg daily, and that all development paths remain open, including the single arm accelerated path. Following completion of the dose escalation and dose exploration phases of the Phase 1/2 clinical program, Aptose focused attention on the tuspetinib APTIVATE expansion trial. The APTIVATE trial is designed to identify patient populations sensitive to tuspetinib monotherapy that may serve as development paths for single-arm accelerated approval and to use the TUS+VEN doublet in R/R AML patients and identify patient populations of unmet need that are sensitive to the TUS+VEN doublet and can serve as development paths for accelerated and full approvals. We reported that patient enrollment in the APTIVATE expansion trial has been brisk and preliminary CR activity had already been reported in patients receiving the TUS+VEN doublet who previously failed therapy with venetoclax.
On March 23, 2023, Aptose announced the APTIVATE Phase 1/2 expansion trial with tuspetinib had been initiated and already had treated several R/R AML patients in the monotherapy arm, and that patient enrollment had been initiated in the doublet combination treatment arm of the APTIVATE trial with the TUS+VEN doublet. Since then, patients have continued to enroll and receive tuspetinib on the monotherapy arm. Plus, enrollment and dosing of patients on the TUS+VEN doublet arm have been brisk. Clinical investigator interest for tuspetinib is evident, and early signs of antileukemic activity during the APTIVATE trial have fueled the level of excitement for the trial.
Clinical responses to monotherapy with tuspetinib have been observed in a broad range of mutationally defined populations, including those with mutated forms of NPM1, MLL, TP53, DNMT3A, RUNX1, wild-type FLT3, ITD or TKD mutated FLT3, various splicing factors, and other genes. In the March 23, 2023, announcement, Aptose also highlighted an unexpected observation of a 29% CR/CRh response rate with tuspetinib monotherapy in R/R AML patients having mutations in the RAS gene or other genes in the RAS pathway. Responses in RAS-mutated patients are important because the RAS pathway is often mutated in response to therapy by other agents as the AML cells mutate toward resistance to those other agents. Collectively, these observations of broad clinical activity of tuspetinib, along with its favorable safety profile, position tuspetinib for potential accelerated development paths, as well as for doublet, triplet and maintenance therapy indications.
On January 30, 2023, Aptose announced dosing of patients in the APTIVATE Phase 1/2 clinical trial of tuspetinib, and that another clinical response has been achieved by a R/R AML patient receiving 40 mg tuspetinib once daily orally in the original dose exploration trial, the second response at the recently launched low-dose 40 mg cohort. In addition, Aptose elucidated a rationale for the superior safety profile of tuspetinib. While several kinase inhibitors require high exposures to elicit responses by near-complete suppression of a single target, those agents often cause additional toxicity because they also extensively inhibit that target in normal cells. In contrast, tuspetinib simultaneously suppresses a small suite of kinase-driven pathways critical for leukemogenesis. Consequently, tuspetinib achieves clinical responses at lower exposures with less overall suppression of each pathway, thereby avoiding many of the toxicities observed with competing agents.
Other Corporate Matters
Reverse Stock Split
On January 27, 2025, the Company held a Special Meeting of the shareholders of the Corporation (the “Meeting”). At the Meeting, shareholders voted in favor of an amendment to the Company’s Articles to, at the discretion of the Company’s board of directors (the “Board”), to effect a Reverse Stock Split, with the ratio within such range to be determined at the discretion of the Board. The Board approved 1-for-30 ratio on February 18, 2025. Our Common Shares commenced trading on a post-Reverse Stock Split basis at market open on February 26, 2025.
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The par value and the authorized shares were not adjusted as a result of the Reverse Stock Split. All the Company’s issued and outstanding Common Shares, stock options and warrants have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented.
Nasdaq Notices
NasdaqPrivate Placement Deficiency Requirement
On February 29, 2024, the Company received a deficiency letter (the "February 2024 Deficiency Letter") from the Nasdaq Listing Qualifications Department of the Nasdaq notifying the Company that the Company’s January 2024 private placement (the "Private Placement") of securities to Hanmi violated Nasdaq Listing Rule 5635(d) because the Company did not obtain shareholder approval prior to such issuance. Nasdaq stated that the Private Placement involved the issuance of more than 20% of the Company's issued and outstanding Common Shares at a discount to the Nasdaq official closing price on January 25, 2024, the date of the subscription agreement between the Company and Hanmi. The February 2024 Deficiency Letter had no immediate effect on the listing of the Company’s Common Shares. In accordance with the Nasdaq Listing Rules, the Company was given forty-five (45) calendar days, or until April 14, 2024, to submit a plan to regain compliance.
On April 25, 2024, the Company received a letter from the Listing Qualifications Department of Nasdaq (the "Staff") notifying the Company of the Staff’s determination that the Company had regained compliance with Nasdaq Listing Rule 5635(d) and the Staff had determined that the matter was now closed. Pursuant to the Company's plan to regain compliance, on April 26, 2024, the Company announced that it had amended the warrant agreement with Hanmi to prohibit the exercise of the Hanmi warrants in excess of the Nasdaq 19.99% limitation (the "Nasdaq 19.99% Cap"), unless shareholder approval is first obtained to exceed the Nasdaq 19.99% Cap.
Nasdaq Minimum Bid Price requirement
On July 16, 2024, the Company received a deficiency letter (the “July 2024 Deficiency Letter”) from the Nasdaq, notifying the Company that, for the prior thirty consecutive business days, the closing bid price for the Company’s Common Shares was below the minimum $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The July 2024 Deficiency Letter had no immediate effect on the listing of the Company’s Common Shares, and its Common Shares continued to trade on Nasdaq and the Toronto Stock Exchange (“TSX”) under the symbol “APS.” The Company’s listing on the TSX is independent and will not be affected by the Company’s Nasdaq listing status. The Company was given 180 calendar days, or until January 13, 2025, to regain compliance with the Minimum Bid Price Requirement. If at any time before January 13, 2025, the bid price of the Company’s Common Shares closed at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq would have provided written confirmation that the Company regained compliance. If the Company did not regain compliance with the Minimum Bid Price Requirement by January 13, 2025, the Company may, at the discretion of Nasdaq, be afforded a second 180 calendar day period to regain compliance. To qualify for the extension, the Company was required to meet the continued listing requirements for the market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, except the bid price requirement.
On January 14, 2025, the Company received an additional letter from the Nasdaq Listing Qualifications Department notifying the Company that, for the last thirty (30) consecutive business days, the closing bid price for the Company’s Common Shares was below the minimum $1.00 per share required for continued listing on Nasdaq pursuant to the Minimum Bid Price Requirement. The Company presented its plan of compliance to the hearings panel and was given until March 31, 2025, to regain compliance with the Minimum Bid Price Requirement.
On March 14, 2025, Nasdaq confirmed that we had regained compliance with the Minimum Bid Price Requirement.
Nasdaq Equity Rule Requirement
On April 2, 2024, the Company received a letter (the “Notification Letter”) from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Rule”) because the stockholders’ equity of the Company as of December 31, 2023, as reported in the Company’s Annual Report on Form 10-K, was below the minimum requirement of $2.5 million (the “Stockholders’ Equity Requirement”). The Notification Letter had no immediate effect on the Company's continued listing on Nasdaq, provided the Company complied with the other continued listing requirements. Pursuant to the Notification Letter, the Company had 45 calendar days to submit a
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plan to evidence compliance with the Rule (a “Compliance Plan”). The Company submitted the Compliance Plan on May 17, 2024, and received an extension to September 30, 2024 to regain compliance. As of September 30, 2024, the Company had not yet met the compliance requirement. Accordingly, on October 1, 2024, the Company received a staff determination letter stating that the Company did not meet the terms of the extension because it did not complete its proposed financing initiatives to regain compliance. On October 8, 2024, the Company requested an appeal and hearing of the determination, which automatically stayed Nasdaq’s delisting of the Company’s Common Shares pending the appeal panel’s decision, such hearing was scheduled for November 21, 2024. The Company submitted a revised plan to regain compliance on November 11, 2024 and on December 19, 2024, the Company announced that the panel granted the Company’s request for an extension to evidence compliance with all applicable criteria for continued listing on Nasdaq. On or before March 31, 2025, the Company was required to demonstrate compliance with the Rule requiring the Company to have met the Stockholders' Equity Requirement to continue its listing on Nasdaq.
As of March 31, 2025, the Company had not regained compliance with the Equity Rule. On March 31, 2025, the Company received a letter from the Nasdaq stating that because the Company did not regain compliance with the Equity Rule, Nasdaq determined to delist the Company's Common Shares from the Nasdaq, effective on April 2, 2025. The Company's Common Shares remain listed on TSX under the symbol "APS" and OTC under the symbol "APTOF". On July 1, 2025, Aptose announced it had been upgraded to list for trading on the OTCQB Market under the ticker “APTOF” and trading on OTCQB began July 1, 2025.
TSX Notification Regarding Continued Listing
On September 23, 2025, the Company received a letter from the TSX indicating that it is reviewing its eligibility for continued listing of its Common Shares on the TSX pursuant to Part VII of the TSX Company Manual (the "Manual"). The Company was granted 120 days to comply with all requirements for continued listing. If the Company cannot demonstrate that it meets all requirements set out in Part VII of the Manual on or before January 22, 2026, the Company's Common Shares would be delisted 30 days from such date.
In response to submissions made on behalf of the Company, on January 15, 2026, the Company received an additional letter from the TSX indicating that the Continued Listing Committee of the TSX had decided to defer its delisting decision until no later than March 23, 2026. If TSX determined to delist the securities, the TSX will also determine whether trading in the securities should be suspended or not.
In response to further submissions made on behalf of the Company, on March 18, 2026, the Company received another letter from the TSX indicating that the Continued Listing Committee of the TSX had decided to defer its delisting decision until no later than April 17, 2026. If TSX determines to delist the securities, the TSX will also determine whether trading in the securities should be suspended or not.
LIQUIDITY AND CAPITAL RESOURCES
We are an early-stage development company and we currently do not generate any revenues from our drug candidates. The continuation of our research and development activities and the commercialization of the targeted therapeutic products depend on our ability to successfully finance and complete our research and development programs through a combination of equity financing and payments from strategic partners. We currently have no significant sources of payments from strategic partners. We have fully utilized our advances in the amount of $8.5 million available under the Hanmi Facility Agreement and $11.9 million under the Amended Facility Agreement. However, on February 23, 2026, we and Hanmi entered into the Second Amended Facility Agreement, pursuant to which Hanmi provided an additional uncommitted facility for up to $11.1 million, administered through multiple advances for the purpose of the continued clinical development of tuspetinib and to fund our operations. Advances under the Second Amended Facility Agreement may be provided in one or more (but no more than six advances) until May 31, 2026. No single advance shall be for an amount in excess of $2.0 million or for an amount that is less than $0.5 million. Amounts outstanding pursuant to the Second Amended Facility Agreement are repayable in full on August 31, 2028. We have received a total of $2.0 million from all advances under the Second Amended Facility Agreement as of the date of this filing. It should be noted that the facility is uncommitted, and Hanmi may cancel availability under the Second Amended Facility Agreement at any time without notice, acting solely at its sole discretion. As of the filing date, we do not have sufficient cash to fund operations and rely on advances made by Hanmi.
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Sources of liquidity:
The following table presents our cash, cash equivalents, restricted cash, restricted cash equivalents and working capital as of December 31, 2025 and 2024.
Less: total current liabilities (9,306 ) (4,459 )
Working capital is a non-GAAP measure and primarily represents cash, cash equivalents, restricted cash and restricted cash equivalents, prepaid expenses and other current assets less current liabilities. This financial measure provides a fuller understanding of the Company’s capital available to fund future operations.
All our cash is maintained at high-credit quality institutions. We minimize the cash levels above the insurance levels required by the Federal Deposit Insurance Corporation and the Canada Deposit Insurance Corporation, with excess cash invested in short-term investments with leading financial institutions. Our short-term investments, maturing within 90 days and classified as cash and cash equivalents, consist of high-interest savings accounts.
Since our inception, we have financed our operations and technology acquisitions primarily through equity financing, proceeds from the exercise of warrants and stock options, advances made by Hanmi and interest income on funds held for future investment. Cash used for operating activities has primarily consisted of salaries and wages for management and employees, facility and facility-related costs for our offices, fees paid in connection with preclinical and clinical studies, licensing fees, drug manufacturing costs, laboratory supplies and materials, and professional fees. Given the early stage of our clinical trials, we do not expect to generate positive cash flow from operations in the foreseeable future. Negative cash flows are expected to continue until such time, if ever, that regulatory approval to commercialize any of our products under development is received and/or when royalty or milestone revenue from such products exceeds expenses.
We incurred a net loss of $25.5 million for the year ended December 31, 2025 and $25.4 million for the year ended December 31, 2024. As of December 31, 2025, we had an accumulated deficit of $566.4 million (December 31, 2024 - deficit of $541.0 million); cash, cash equivalents, restricted cash and restricted cash equivalents of $4.1 million (December 31, 2024 - $6.7 million); current assets less current liabilities of negative $2.9 million (December 31, 2024 - positive $5.1 million); and shareholders' deficit of $27.2 million (December 31, 2024 - shareholders' deficit of $4.5 million). Our cash needs for the twelve months subsequent to the issuance of these financial statements include estimates of the number of patients and rate of enrollment in our clinical trials, the amount of drug product we will require to support our clinical trials and general corporate overhead costs to support our operations. We have based these estimates on assumptions and plans that may change and could impact the magnitude and/or timing of operating expenses and our cash runway.
Management recognizes that in order to meet capital requirements and continue operations, additional financing will be necessary. We plan to raise additional funds to fund our business operations through debt or other financing activities. Management continues considering other options for raising capital including debt, through collaborations or reorganization to reduce operational expenses. However, given the decrease in the share price, the Company's delisting from Nasdaq, and the difficulty for micro-cap market companies, especially with market capitalizations under $100.0 million, to raise significant capital, we may be unable to access financing when needed. As such, there can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all.
Our ability to raise additional funds has been affected by adverse market conditions, the status of our product pipeline, delays in enrollment in our trial, and various other factors, and we may be unable to raise capital when needed, or on terms favorable to us. If debt or equity financing is unable to be secured, we may need to resort to other means of protecting our assets in the best interests of our shareholders, including foreclosure or forced liquidation and/or seeking creditors’ protection.
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The conditions mentioned above raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not reflect any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may be necessary if we are unable to continue as a going concern; these types of adjustments could be material.
(i)
2025 Committed Equity Facility
On February 7, 2025, the Company and Keystone Capital Partners, LLC ("Keystone") entered into a purchase agreement (the "Purchase Agreement"), which provides that, subject to the terms and conditions set forth therein, the Company may sell to Keystone up to the lesser of (i) $25 million of the Common Shares and (ii) 19.99% of the Common Shares outstanding as of the date of the Purchase Agreement (subject to certain exceptions provided in the Purchase Agreement) (the “Total Commitment”), from time to time during the two- year term of the Purchase Agreement. Additionally, on February 7, 2025, the Company and Keystone entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement with the SEC covering the resale of Common Shares that are issued to Keystone under the Purchase Agreement. Upon entering into the Purchase Agreement, the Company agreed to issue to Keystone an aggregate of 8,020 Common Shares (the “Commitment Shares”) as consideration for Keystone’s commitment to purchase Common Shares upon the Company’s direction under the Purchase Agreement. As the registration statement has not been declared effective by the SEC, the Commitment Shares have not been issued. The Company also agreed to pay Keystone up to $25,000 for its reasonable expenses under the Purchase Agreement.
(ii)
2025 At-The-Market Facility
On February 3, 2025 the Company and A.G.P./Alliance Global Partners (“AGP”) entered into a sales agreement whereby the Company may, from time to time, sell Common Shares having an aggregate offering value of up to $1.0 million through AGP on Nasdaq (the “2025 ATM Facility”). Costs associated with the proceeds consist of 3% cash commission. During the period and up to February 12, 2025, the Company issued 137,000 Common Shares under the 2025 ATM Facility at an average price of $7.31 per share for gross proceeds of $1.0 million ($0.8 million net of share issuance costs).
(iii)
November 2024 Public Offering
On November 25, 2024, the Company completed a reasonable best efforts public offering (the “November 2024 Public Offering”) with participation from the Company's CEO and existing and new healthcare-focused investors for the purchase and sale of 1,333,333 Common Shares at a price of $6.00 per share and warrants to purchase up to 666,599 Common Shares (the “November 2024 Investor Warrants”). The November 2024 Investor Warrants have an exercise price of $6.00 per share, were exercisable immediately and will expire five years from the issuance date. In connection with the November 2024 Public Offering, the Company received aggregate gross proceeds of $8.0 million, before deducting placement agent fees and other offering expenses of approximately $1.1 million, consisting of placement agent fees of $0.6 million and professional fees of $0.5 million. Additionally, AGP, the lead placement agent engaged by the Company, received 53,333 warrants, each with an exercise price of $8.25 (the “AGP Warrants”). The AGP Warrants were exercisable immediately and will expire five years from November 25, 2024.
(iv)
September 2024 Common Share Issuance
On September 5, 2024, the Company held a Special Meeting of Shareholders pursuant to which shareholders voted to authorize, for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of Common Shares underlying certain warrants in an amount equal to or in excess of 20% of its Common Shares outstanding immediately prior the issuance of such warrants pursuant to the June 2024 Registered Direct Offering. On September 11, 2024, the Company issued 68,500 Common Shares upon the exercise of 68,500 Pre-Funded Warrants for cash proceeds of $2,000 at an exercise price of $0.03 per Common Share.
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(v)
June 2024 Registered Direct Offering and Concurrent Private Placement
On June 3, 2024, the Company completed the Registered Direct Offering for the purchase and sale of 60,000 Common Shares at a purchase price of $34.50 per Common Share and 68,500 pre-funded warrants (the “Pre-Funded Warrants”) with an exercise price of $0.03 per Pre-Funded Warrant. Each Pre-Funded Warrant was exercisable immediately and expires on June 25, 2029.
In a concurrent private placement, Aptose issued unregistered series A warrants to purchase up to 128,500 Common Shares (“Series A Warrants”) and series B warrants to purchase up to 128,500 Common Shares (“Series B Warrants”), each at an exercise price of $34.50 per share. The Series A and Series B unregistered warrants became exercisable beginning on the effective date of shareholder approval of the issuance of the Common Shares issuable upon exercise of the Series A and Series B Warrants, which was obtained on September 5, 2024. The Series A Warrants expire five years from September 5, 2024, and the Series B Warrants expired on March 5, 2026.
The gross proceeds to the Company from the Registered Direct Offering were approximately $4.4 million, less cash transaction costs of approximately $0.4 million, which include placement agent and other professional fees. In addition, H.C. Wainwright (“HCW”), the lead placement agent engaged by the Company for the Registered Direct Offering, received 6,423 warrants, each with an exercise price of $43.13 (the “HCW Warrants”). The HCW Warrants were exercisable beginning on September 5, 2024 and will expire on June 3, 2029.
(vi)
January 2024 Public Offering
On January 30, 2024, the Company completed a public offering (the “January 2024 Public Offering”) of 188,304 Common Shares, including 24,561 Common Shares issued pursuant to a full exercise by the underwriter, Newbridge Securities Corporation (“Newbridge”), of its over-allotment option at a purchase price of $51.30 per Common Share, for aggregate gross proceeds of $9.7 million, less cash transaction costs of $1.6 million. The Company also issued share purchase warrants underlying a total of 188,174 Common Shares to each investor who participated in the January 2024 Public Offering (the “January 2024 Investor Warrants”). Each January 2024 Investor Warrant has an exercise price of $51.30 per share and was exercisable immediately upon issuance. The January 2024 Investor Warrants will expire January 30, 2029.
Additionally, in connection with the January 2024 Public Offering, the Company issued share purchase warrants underlying a total of 18,084 Common Shares to Newbridge as compensation payable thereto, with each warrant having an exercise price of $64.13 per share and being exercisable beginning on July 30, 2025 and expiring on January 30, 2028. The issue-date fair value of all warrants issued to Newbridge in connection with the January 2024 Public Offering and the January 2024 Private Placements (the “Newbridge Warrants”) was recorded as additional transaction costs, with a reduction to Common Shares and a corresponding increase to additional paid-in capital.
(vii)
Hanmi Private Placement
Concurrently with the January 2024 Public Offering, the Company completed a private placement with Hanmi (the “Hanmi Private Placement”) of 70,175 Common Shares at a price of $57.00 per Common Share, representing an 11% premium over the price of the Common Shares issued as part of the January 2024 Public Offering, for gross proceeds of $4.0 million, less cash transaction costs of $0.3 million. Also, as part of the January 2024 Private Placement, the Company issued to Hanmi, Common Share purchase warrants underlying 77,972 of our Common Shares (the “Hanmi Warrants”). Each Hanmi Warrant has an exercise price of $51.30 per Common Share and was exercisable immediately upon issuance. The Hanmi Warrants will expire January 31, 2029.
Pursuant to the Company's plan to regain compliance with certain Nasdaq Listing Rules, on April 26, 2024, the Company amended its warrant agreement with Hanmi to prohibit the exercise of Hanmi warrants in excess of the Nasdaq 19.99% limitation (the "Nasdaq 19.99% Cap"), unless shareholder approval is first
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obtained to exceed the Nasdaq 19.99% Cap. Due to the modifications made, the warrants were classified as a liability on April 24, 2024, following the amendment of the Hanmi Warrants. After receiving shareholder approval on June 18, 2024, the Company reevaluated these warrants and determined that they met the criteria to be classified as equity. Consequently, the change in the fair value of the warrants, amounting to $0.7 million during the two-month period when the Hanmi Warrants were classified as liabilities, was recorded as other income in the consolidated statements of loss and comprehensive loss. This change is also reflected in the net loss and comprehensive loss and additional paid-in capital in the consolidated statements of changes in shareholders’ deficit.
(viii)
2023 Committed Equity Facility
On May 25, 2023, the Company and Keystone entered into a committed equity facility (the "2023 Committed Equity Facility"), which provides that, subject to the terms and conditions set forth therein, the Company may sell to Keystone up to the lesser of (i) $25.0 million of the Common Shares and (ii) a number of Common Shares equal to 19.99% of the Common Shares outstanding immediately prior to the execution of the 2023 Committed Equity Facility Agreement. Additionally, on May 25, 2023, the Company entered into a Registration Rights Agreement with Keystone, pursuant to which the Company agreed to file a registration statement with the SEC covering the resale of Common Shares that are issued to Keystone under the 2023 Committed Equity Facility. This registration statement became effective on June 30, 2023, and the 2023 Committed Equity Facility commencement date was July 12, 2023.
Upon entering into the 2023 Committed Equity Facility, the Company agreed to issue to Keystone an aggregate of 838 Common Shares (the “Commitment Shares”) as consideration for Keystone’s commitment to purchase Common Shares upon the Company’s direction under the 2023 Committed Equity Facility. The Company issued 251 Common Shares, or 30% of the Commitment Shares, on the date of the 2023 Committed Equity Facility Agreement. An additional 251 Common Shares, or 30% of the Commitment Shares, were issued to Keystone in October 2023.
During the year ended December 31, 2024, the Company issued 17,003 Common Shares to Keystone at an average price of $40.80 per Common Share for cash proceeds of $0.7 million and 329 Commitment Shares valued at $23,000.
Since May 25, 2023 to April 2024, the time the 2023 Committed Equity Facility was terminated, the Company's issuance of Common Shares to Keystone consisted of an aggregate of 41,019 Common Shares at an average price of $68.10 per Common Share for aggregate gross cash proceeds of $2.8 million and 838 Commitment Shares.
From May 25, 2023 to the termination of the 2023 Committed Equity Facility, the Company recognized $0.2 million of financing costs associated with professional fees. In April 2024, the Company's issuances of Common Shares to Keystone reached the Total Commitment of the 2023 Committed Equity Facility, i.e., 19.99% of the Common Shares outstanding immediately prior to the execution of the 2023 Committed Equity Facility Agreement.
(ix)
2022 ATM Facility
On December 9, 2022, the Company entered into an equity distribution agreement pursuant to which the Company may, from time to time, sell Common Shares having an aggregate offering value of up to $50 million through Jones Trading Institutional Services LLC on Nasdaq (the "2022 ATM Facility"). During the prior year up to May 30, 2024, the date on which the Company terminated the 2022 ATM Facility, the Company issued 2,717 Common Shares under the 2022 ATM Facility at an average price of $36.60 per share for gross proceeds of $100,000 (net of $121,000 of share issuance costs). Since inception to May 30, 2024, the Company raised a total of $2.1 million of gross proceeds ($2.0 million net of share issuance costs) under the 2022 ATM Facility. Costs associated with the proceeds consisted of a 3% cash commission.
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Our ability to raise additional funds could be affected by adverse market conditions, the status of our product pipeline, and various other factors and we may be unable to raise capital when needed, or on terms favorable to us. If the necessary funds are not available, we may need to delay, reduce the scope of, or eliminate some of our development programs, potentially delaying the time to market for any of our product candidates. As of the filing date, we do not have sufficient liquidity to support the Company's operations and rely on advances made by Hanmi.
Cash flows
The following table presents a summary of our cash flows for the years ended December 31, 2025 and 2024:
For the Years Ended,
Net cash (used in) provided by:
Investing activities — 18
Cash used in operating activities
Our cash used in operating activities for the year ended December 31, 2025 and December 31, 2024 was $22.0 and $36.0 million, respectively, for a decrease of $14.0 million. This was primarily due to reduced operating expenses, as well as increases in accounts payable and accrued liabilities during the current year compared to decreases in accounts payable and accrued liabilities in the prior year. Our uses of cash for operating activities for both periods consisted primarily of salaries and wages for our employees, facility and facility-related costs for our offices, fees paid to contract research organizations and pass-through expenses paid in connection with clinical and pre-clinical studies, drug manufacturing costs, laboratory supplies and materials, and professional fees. See "Results of Operations."
We do not expect to generate positive cash flow from operations in the foreseeable future. We continue to incur research and development costs, including costs related to preclinical testing, clinical trials, and manufacturing, as well as operating expenses associated with supporting these activities, and potential milestone payments to our collaborators. It is expected that negative cash flows will continue until such time, if ever, that we receive regulatory approval to commercialize any of our products under development and/or royalty or milestone revenue from such products exceeds expenses.
Cash flow from investing activities:
We did not have any cash flows from investing activities for the year ended December 31, 2025.
Our cash provided by investing activities for the year ended December 31, 2024 was $18,000, consisting of proceeds from the disposal of property and equipment, partially offset by the purchase of property and equipment.
Cash flow from financing activities:
Our cash flows from financing activities for the year ended December 31, 2025 was $19.4 million, consisting primarily of $18.6 million related to advances under the Hanmi Facility Agreements and $0.8 million from the issuance of shares under the 2025 ATM.
Our cash flows from financing activities for the year ended December 31, 2024 was $33.4 million, consisting primarily of $10.0 million from the proceeds of the loan payable to a related party, $6.9 million from the issuance of Common Shares under the November 2024 Public Offering, $4.0 million from the issuance of Common Shares under the June 2024 Registered Direct Offering, $8.1 million from the issuance of Common Shares under the January 2024
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Public Offering, $3.7 million from the issuance of Common Shares under the Hanmi Private Placement and $0.6 million from the issuance of Common Shares under the 2023 Committed Equity Facility.
Contractual Obligations and Off-Balance Sheet Financing
As of December 31, 2025, we have not entered into any off-balance sheet arrangements.
In the ordinary course of business, the Company enters into research, development and license agreements pursuant to which we receive research services and rights to proprietary technologies. Milestone and royalty payments that may become due under various agreements are dependent on, among other factors, clinical trials, regulatory approvals and ultimately the successful development of a new drug, the outcome and timing of which is uncertain.
On November 4, 2021, the Company entered into the Tuspetinib Licensing Agreement with Hanmi for exclusive global rights to its compound named tuspetinib. Under the Tuspetinib Licensing Agreement, the Company has maximum obligations for clinical development and global regulatory milestones totaling $64.5 million for the first potential clinical indication of tuspetinib, $34.0 million for the second indication, and $29.0 million for the third indication. The Company has maximum obligations for tiered global sales-based milestones totaling $280.0 million. The Company also has an obligation for tiered royalty payments on global sales of the commercialized product. The timing of any milestone or royalty payments that may become due is not yet determinable.
RESULTS OF OPERATIONS
A summary of the results of operations for the years ended December 31, 2025 and 2024 is presented below:
Years ended December 31,
(in thousands, except per common share data) 2025 2024
Revenues $ — $ —
Total other (expenses) income (745 ) 827
Net loss and comprehensive loss $ (25,468 ) $ (25,430 )
Net loss per common share, basic and diluted $ (10.41 ) $ (36.38 )
Net loss for the year ended December 31, 2025 of $25.5 million increased slightly as compared with a net loss of $25.4 million for the year ended December 31, 2024. Components of net loss are presented below:
Research and development ("R&D") expenses consist primarily of costs incurred related to the research and development of our product candidates and include:
•
External research and development expenses incurred under agreements with third parties, such as contract research organizations, consultants, members of our scientific advisory boards, external labs and contract manufacturing organizations; and
•
Employee-related expenses, including salaries, benefits, travel, and stock-based compensation for personnel directly supporting our clinical trials, manufacturing and development activities.
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Our R&D expenses for the years ended December 31, 2025 and 2024 were as follows:
Years ended December 31,
Program costs – Tuspetinib $ 7,900 $ 9,606
Program costs – Luxeptinib 313 422
Program costs – APTO-253 — (19 )
Stock-based compensation 198 346
Depreciation of property and equipment — 13
R&D expenses decreased by $3.8 million to $11.3 million for the year ended December 31, 2025 as compared to $15.1 million for the year ended December 31,2024. Changes to the components of our R&D expenses presented in the table above are primarily as a result of the following activities:
•
Program costs for tuspetinib decreased by $1.7 million to $7.9 million for the year ended December 31, 2025 compared to $9.6 million for the year ended December 31, 2024. The increased costs associated with the TUSCANY study were offset by a decrease in tuspetinib development expenses during the current year. This reduction is due to the conclusion of activities in our APTIVATE clinical trial during the current year as compared to higher APTIVATE activities during the prior year, as well as lower manufacturing and related development costs.
•
Program costs for luxeptinib decreased by approximately $0.1 million compared to the prior year. This reduction was primarily attributed to lower clinical trial and manufacturing activities.
•
The Company discontinued further clinical development of APTO-253.
•
Personnel-related expenses decreased by $1.8 million to $2.9 million for the year ended December 31, 2025 compared to $4.7 million in the prior year. The decrease was primarily due to lower headcount for research and development personnel in 2025.
•
Stock-based compensation decreased by $0.1 million in the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily due to stock options forfeited and/or vested in prior periods that are no longer being expensed resulting in lower expense in the current year.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries, benefits and travel, including stock-based compensation for our executive, finance, business development, human resources, and support functions. Other general and administrative expenses include professional fees for auditing and legal services, investor relations and other consultants, insurance, and facility-related expenses.
We expect our general and administrative expenses to increase slightly in the near term, primarily due to ongoing personnel costs, legal and other professional fees and insurance expenses associated with operating as a public company.
Our general and administrative expenses for the years ended December 31, 2025 and 2024 were as follows:
Years ended December 31,
(in thousands) (in thousands)
General and administrative, excluding items below: $ 13,081 $ 10,421
Stock-based compensation 279 714
Depreciation of property and equipment 22 19
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General and administrative expenses for the year ended December 31, 2025 were $13.4 million compared to $11.2 million for the same period in 2024, an increase of $2.2 million. This increase was primarily due to the following:
•
General and administrative expenses, other than stock-based compensation and depreciation of property and equipment, increased by approximately $2.7 million during the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increased legal expenses and professional fees and bonuses recognized in the current year.
•
Stock-based compensation decreased by $0.4 million during the year ended December 31, 2025 compared to the same period in 2024 primarily due to stock options forfeited and/or vested in prior periods that are no longer being expensed resulting in lower expense in the current year.
CRITICAL ACCOUNTING POLICIES
Critical Accounting Policies and Estimates
We periodically review our financial reporting and disclosure practices and accounting policies to ensure that they provide accurate and transparent information relative to the current economic and business environment. As part of this process, we have reviewed our selection, application and communication of critical accounting policies and financial disclosures. A “critical accounting policy” is one which is both important to the portrayal of our financial condition and results and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management has discussed the development and selection of the critical accounting policies with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed the disclosure relating to critical accounting policies in this MD&A. For additional information, please see the discussion of our significant accounting policies included in Note 2 under Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K.
Significant Accounting Judgments and Estimates
Management’s assessment of our ability to continue as a going concern involves making a judgment, at a particular point in time, about inherently uncertain future outcomes and events or conditions. Please see “Liquidity and Capital Resources” above for a discussion of the factors considered by management in arriving at its assessment. The critical accounting policies, judgments and estimates made by management are the estimates related to prepaid and accrued R&D activities.
Research and Development Activities:
R&D costs are expensed as incurred. R&D costs consist primarily of salaries and benefits, stock-based compensation, manufacturing, contract services, clinical trials, and research related overhead.
The Company records expenses for research and development activities based on management’s estimates of services received and efforts expended pursuant to contracts with vendors that conduct research and development on the Company’s behalf. The financial terms vary from contract to contract and may result in uneven payment flows as compared with services performed or products delivered. As a result, the Company is required to estimate research and development expenses incurred during the period, which impacts the amount of accrued expenses and prepaid balances related to such costs as of each balance sheet date. Management estimates the amount of work completed through discussions with internal personnel and the contract research and contract manufacturing organizations as to the progress or stage of completion of the services, as well as to identify services that have been performed on our behalf and estimating the level of services performed and the associated cost incurred for the service when we have not been invoiced or otherwise notified of the actual cost. The Company’s estimates are based on a number of factors, including the Company’s knowledge of the status of each of the research and development project milestones, and contract terms together with related executed change orders. Management makes significant judgments and estimates in determining the accrued balance at the end of each reporting period.
Although management does not expect our estimates to be materially different from amounts actually incurred, if the estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in the Company reporting amounts that are too high or too low in any particular period. As
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of December 31, 2025, the Company has recorded $4.1 million in prepaid expenses and other long-term assets and $3.2 million in accrued liabilities related to its research and development activities. If the estimates are too high or too low by a factor of 10%, prepaid expenses would be overstated or understated by $0.4 million, and accrued liabilities would be over or understated by $0.3 million. Combined, this could mean an increase or decrease in research and development expenses by $0.7 million. There have been no material differences between the estimates of such expenses and the amounts actually incurred.
Updated share information
As of March 16, 2026, we had 2,552,429 Common Shares issued and outstanding. In addition, 37,370 Common Shares were issuable upon the exercise of outstanding stock options and 1,267,585 Common Shares issuable upon the exercise of outstanding warrants.
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Under SEC rules and regulations, as a smaller reporting company, we are not required to provide this information.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required pursuant to this items are included in Item 15 of this Annual Report and are presented beginning on page F-1 of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of the end of our fiscal year ended December 31, 2025, an evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) was carried out by our management, with the participation of our principal executive officer and principal financial officer. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that as of the end of that fiscal year, our disclosure controls and procedures were effective at a reasonable assurance level.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive and financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
As of December 31, 2025, our management assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of December 31, 2025, our internal control over financial reporting was effective based on those criteria. We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K under the Securities Act. For as long
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as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the 1934 Act) during our fiscal quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Remediation of Previously Reported Material Weakness
As previously disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2024, we previously identified a material weakness in our internal control over financial reporting related to our accounting for complex financial instruments, specifically with regards to warrants.
In response to this material weakness, we have implemented additional measures to enhance existing controls, as well as establishing additional review procedures and controls over the process of reviewing significant and complex contracts and agreements. Such controls include: identifying specific clauses and relevant guidance that could result in liability classification of issued warrants; engaging outside firms, as necessary, that specialize in the analysis and technical accounting for the classification of warrants and other complex financial instruments; and confirming with our outside legal counsel whether any warrants have been modified during the period.
We believe our remediation efforts resulted in the elimination of the previously identified material weakness as of December 31, 2025. While this material weakness has been remediated, we cannot assure investors that we will not in the future have additional material weaknesses. We have dedicated resources to the design, implementation, documentation and testing of our internal control over financial reporting. We will continue to evaluate the effectiveness of our internal control over financial reporting and will continue to make changes that we believe will strengthen our internal control over financial reporting to ensure that our financial statements continue to be fairly stated in all material respects.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Director Experience and Qualifications
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74
(1)
Member of the Audit Committee.
(2)
Member of the Compensation Committee.
(3)
Member of the Corporate Governance and Nominating Committee.
(4)
Member of the R&D Committee.
(5)
Lead Director of the Corporation.
* SEC reporting issuer
Other than as described below, no proposed director is, to the knowledge of the Corporation as at the date of this filing, or has been, within 10 years before the date of this filing, a director, chief executive officer or chief financial officer of any company (including Aptose) that: (i) was subject to a cease trade order, an order similar to a cease trade
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order or an order that denied the relevant company access to any exemption under Canadian securities legislation that was in effect for a period of more than 30 consecutive days, (ii) was subject to cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under Canadian securities legislation that was in effect for a period of more than 30 consecutive days that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer, (iii) while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (iv) become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromised with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.
Dr. Seizinger was a non-executive independent director of Opsona Therapeutics Ltd., a private company formed under the laws of Ireland, which filed for a creditors’ voluntary liquidation under applicable Irish law in December 2018.
Moreover, no proposed director of the Corporation has been subject, to the knowledge of the Corporation, to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.
There are no family relationships among any of the director nominees, directors and/or any of Aptose’s executive officers. In addition, no nominee has an arrangement or understanding with another person under which he or she was or is to be selected as a director or nominee.
Composition and Independence of the Board
The Corporation’s Board is currently composed of sixdirectors, a majority (five) of whom meet the independence standards under the listing standards of Nasdaq, the rules and regulations of the SEC, and National Instrument 52-110 – Audit Committees (“NI 52-110”). Each year the Board reviews the composition of the Board and assesses whether a Board member is “independent”.
Director Independence
Denis Burger Yes
Erich Platzer Yes
William G. Rice No
Bernd R. Seizinger Yes
Mark Vincent Yes
Warren Whitehead Yes
Dr. William G. Rice, Ph.D., Chairman, President and Chief Executive Officer of the Corporation is not an independent director because of his role in the Corporation’s management team.
Ethical Business Conduct
We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is available on our website at http://www.aptose.com under the Corporate Governance section of our Investors page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver,
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from a provision of the policy that is granted to one of these specified individuals that is required to be disclosed pursuant to SEC rules and regulations, the name of such person who is granted the waiver and the date of the waiver.
The Corporate Governance and Nominating Committee regularly monitors compliance with the Code through communications with management and reports through the Disclosure and Insider Trading Policy (as described below) and ensures that management of the Corporation encourages and promotes a culture of ethical business conduct. A copy of the Code may be found by accessing the SEC’s EDGAR filing database at www.sec.gov, on SEDAR+ at www.sedarplus.ca and on our website at www.aptose.com.
The Corporation has developed a Disclosure and Insider Trading Policy that covers “whistle blowing” and provides an anonymous means for employees and officers to report violations of the Code or any other corporate policies, in addition to providing guidelines on employee trading in the Corporation’s securities.
The Board has not granted any waiver of the Code in favor of a director or officer of the Corporation. No material change reports have been filed since the beginning of the Corporation’s most recently completed fiscal year that pertain to any conduct of a director or executive officer that constitutes a departure from the Code.
Conflicts of Interest
The Corporate Governance and Nominating Committee monitors the disclosure of conflicts of interest by directors and ensures that no director will vote or participate in a discussion on a matter in respect of which such director has a material interest.
Board Committees
The Corporation has a standing Audit Committee, a Corporate Governance and Nominating Committee and a Compensation Committee, each of which are composed entirely of independent directors. The Corporation also has a standing R&D Committee. Each current member of the R&D Committee, except for Dr. Rice, qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Audit Committee
Membership. The current members of the Audit Committee are Denis Burger, Bernd R. Seizinger and Warren Whitehead. Mr. Whitehead is the Chair of the Audit Committee. The Board has determined that all members of the Audit Committee qualify as financial experts under the listing standards of Nasdaq.
In addition, each current member of the Audit Committee qualifies as “independent” for purposes of membership on audit committees under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Meetings. The Audit Committee met fourtimes during the period from January 1, 2025 until December 31, 2025.
Committee Mandate. Among its responsibilities, the Audit Committee:
•
serves as an independent and objective party to monitor the integrity of our financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance, including the review of our consolidated financial statements, MD&A and annual and interim results;
•
identifies and monitors the management of the principal risks that could impact our financial reporting;
•
monitors the independence and performance of our independent auditors, including the pre-approval of all audit fees and all permitted non-audit services in accordance with federal securities laws and the rules and regulations of the SEC;
•
provides an avenue of communication among the independent auditors, management, and the Board; and
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•
encourages continuous improvement of, and foster adherence to, our policies, procedures and practices at all levels.
The Audit Committee is also responsible for implementing and overseeing our whistle-blowing procedures and reviewing the Corporation’s plans to mitigate cybersecurity risks and respond to data breaches.
Corporate Governance and Nominating Committee
Membership.The current members of the Corporate Governance and Nominating Committee are Mark Vincent and Denis Burger. Dr. Vincent is the Chair of the Corporate Governance and Nominating Committee. Each current member of the Committee qualifies as “independent” under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110.
Meetings. The Corporate Governance and Nominating Committee met one time during the period from January 1, 2025 until December 31, 2025. In addition, governance matters were discussed and considered at the Board level.
Committee Mandate. Among its responsibilities, the Corporate Governance and Nominating Committee:
•
identifies qualified individuals to become Board members, consistent with criteria approved by the Board;
•
determines the composition of the Board and its committees;
•
selects the director nominees for the next annual meeting of shareholders;
•
monitors a process to assess Board, committee and management effectiveness;
•
aids and monitors management succession planning; and
•
develops, recommends to the Board, implements and monitors policies and processes related to the Corporation’s corporate governance guidelines
Compensation Committee
Membership. The Compensation Committee is currently comprised of Denis Burger and Erich Platzer. Dr. Burger is the Chair of the Compensation Committee. Each current member of the Compensation Committee qualifies as “independent” for purposes of membership on compensation committees under the listing standards of Nasdaq, the rules and regulations of the SEC and NI 52-110, and as a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.
Meetings. The Compensation Committee met one time during the period from January 1, 2025 until December 31, 2025. In addition, compensation matters were discussed and considered at the Board level.
Committee Mandate. Among its responsibilities, the Compensation Committee:
•
reviews and makes recommendations to the Board regarding the corporate goals and objectives, performance and compensation of the Chief Executive Officer and other senior executive officers on an annual basis;
•
evaluates the performance of the Chief Executive Officer and other senior executive officers;
•
makes recommendations to the Board with respect to the compensation policies for the non-employee directors;
•
makes recommendations regarding annual bonus policies for employees, the incentive-compensation plans and equity-based plans for the Corporation; and
•
reviews executive compensation disclosure before the Corporation publicly discloses this information.
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As part of its process to make recommendations to the Board with respect of the compensation for the non-employee directors and other employees of the Corporation, the Compensation Committee consults with the President and Chief Executive Officer and other officers of the Corporation to obtain recommendations as it deems necessary.
We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is available on our website at http://www.aptose.com under the Corporate Governance section of our Investor Relations page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals that is required to be disclosed pursuant to SEC rules and regulations, the name of such person who is granted the waiver and the date of the waiver.
The Company has an insider trading policy which governs the purchase, sale and/or other dispositions of its securities by directors, officers and employees, as well as the Company itself, that are reasonably designed to promote compliance with insider trading laws, rules and regulations and the exchange listing standards applicable to APTO.
Item 11. EXECUTIVE COMPENSATION
Information About Our Executive Officers
Our leadership team comprises accomplished industry, financial and clinical research professionals who are dedicated to building a comprehensive anticancer drug pipeline and clinical development programs focused on targeted therapeutics directed against dysregulated oncogenic processes in patients with life-threatening hematologic malignancies. For the year ended December 31, 2025, the leadership team included our Chairman, President and Chief Executive Officer, Dr. William G. Rice, our Senior Vice President, Chief Financial Officer and Chief Business Officer, Fletcher Payne and our Senior Vice President and Chief Medical Officer, Dr. Rafael Bejar.
Fletcher Payne, age 63, joined Aptose as Senior Vice President, Chief Business Officer, Chief Financial Officer (“CFO”), and Corporate Secretary in June 2022. With over 25 years of experience in the healthcare sector, Mr. Payne has held several CFO and senior management positions at biotech companies, as well as roles in finance and accounting. He has also overseen legal, corporate development, and licensing functions. Throughout his career, he has successfully executed a diverse range of business transactions totaling more than $3.7 billion, with a focus on clinical testing, oncology, neurological conditions, and orphan disease indications. Mr. Payne most recently held the position of CFO at Syapse, where he successfully completed several financing transactions and oversaw the company's accounting, finance, corporate development, and legal functions. Previously, he served as CFO at Catalyst Biosciences, a publicly traded biotech company. Mr. Payne has also held CFO roles and senior financial positions at CytomX Therapeutics, Plexxikon Inc., Rinat Neuroscience Corporation, Dynavax Technologies Corporation, and Cell Genesys, among others. He earned a Bachelor of Science in Finance from the Haas School of Business at the University of California, Berkeley.
Dr. Rafael Bejar, M.D, Ph.D., age 54, joined Aptose as Senior Vice President and Chief Medical Officer in January 2020. Dr. Bejar is an internationally recognized physician scientist with extensive research and clinical experience in the area of hematologic malignancies. Dr. Bejar joined Aptose from UC San Diego (“UCSD”) where he began working in 2012. He continues to serve at UCSD as an Associate Professor of Clinical Medicine, caring for patients and maintaining a research laboratory focused on translational studies of myeloid malignancies and also serves and is an independent consultant as a member of the Independent Data Monitoring Committee for other pharmaceutical companies. At UCSD, he founded the MDS Center of Excellence and led the Hematology Disease Team from 2017 to 2019. There he has directed several clinical studies and served as an advisor for numerous companies including Celgene (now BMS), Takeda, AbbVie, Astex, Genoptix (now NeoGenomics), Keros, Servier, Geron, Forty Seven (now Gilead), PersImmune, Epizyme (now Ipsen) and Daiichi-Sankyo. Outside UCSD, Dr. Bejar sits on the Scientific Advisory Board for the MDS Foundation, is a prior member of the National Comprehensive Cancer Network Guidelines Committee, and has led projects for the International Working Group for MDS. He is frequently invited to speak at national and international meetings and has published articles in a variety of journals including The New England Journal of Medicine, Journal of Clinical Oncology, Leukemia (where he is an Associate
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Editor), Blood, and Blood Advances. Dr. Bejar completed his fellowship in the Massachusetts General Hospital Cancer Center/Dana-Farber Cancer Institute program and has been board certified in Internal Medicines, Hematology and Oncology. He completed his internship in Internal Medicine at the University of Chicago followed by his residency at the Brigham and Women’s Hospital in Boston where he later served a Medical Chief Resident and an Instructor in Hematology. He holds an MD degree and Neuroscience PhD from UCSD and a BS in Physics from MIT.
The following discussion covers the compensation arrangements for Dr. Rice, Mr. Payne and Dr. Bejar (each, an “NEO” and, collectively the “Named Executive Officers”).
Compensation Philosophy
The Compensation Committee’s mandate is to review and advise the Board on the recruitment, appointment, performance, compensation, benefits and termination of executive officers. The Compensation Committee also administers and reviews procedures and policies with respect to equity-based compensation plans, employee benefit programs, pay equity and employment equity and reviews executive compensation disclosure where it is publicly disclosed.
Aptose’s executive compensation program is designed to:
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attract and retain qualified, motivated and achievement-oriented individuals by offering compensation that is competitive in the industry and marketplace, especially given the current challenging market conditions for recruiting and retaining talent;