Apogee Therapeutics, Inc. Income Taxes Disclosure

Apogee Therapeutics, Inc. and its U.S. subsidiary, are taxed as a consolidated C corporation for federal tax purposes. The Company’s loss before income taxes is comprised solely of domestic losses. The Company generated taxable losses for all periods presented.

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets and liabilities consisted of the following (in thousands):

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s cumulative net losses and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2025.

The change in the valuation allowance for the years ended December 31, 2025 and 2024 was $57.1 million and $45.9 million, respectively. Management reevaluates the positive and negative evidence at each reporting period.

As of December 31, 2025 and 2024, the Company had U.S. federal net operating loss carryforwards of approximately $250.7 million and $68.1 million, respectively, which have no expiration for federal tax purposes.

As of December 31, 2025 and 2024, the Company had state net operating loss carryforwards of approximately $94.3 million and $28.5 million, respectively, which will begin to expire in 2043.

As of December 31, 2025 and 2024, the Company had federal research and development credit carryforwards of approximately $16.7 million and $10.5 million, respectively, which will begin to expire in 2042.

The Company also had California research and development credit carryforwards of approximately $2.9 million and $1.5 million as of December 31, 2025 and 2024, respectively, which will not expire.

Additionally, the Company had Massachusetts research and development credit carryforwards of approximately $1.7 million and $2.1 million as of December 31, 2025 and 2024, respectively, which will begin to expire in 2043.

The Company will conduct a study of its research and development credit carryforwards, which may result in an adjustment to its unrecognized tax benefits. However, a full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the accompanying consolidated balance sheet or statement of operations if an adjustment were required.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. Net operating losses are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant members over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not yet finalized a study to determine if any such changes have occurred that could limit its ability to use the net operating losses and tax credit carryforwards.

All tax returns will remain open for examination by the federal and state taxing authorities for three and four years, respectively, from the date of utilization of any net operating loss carryforwards or research and development credits.

It is the Company’s policy to include penalties and interest expense related to income taxes as a component of income tax expense, as necessary. As of December 31, 2025 and 2024, the Company had no accrued interest or penalties related to uncertain tax positions.

The Tax Cuts and Jobs Act (“TCJA”) included a change in the treatment of research and development expenditures for tax purposes under Section 174. Effective for tax years beginning after December 31, 2021, specified R&D expenditures must undergo a 5-year amortization period for domestic spend and a 15-year amortization period for foreign spend. Prior to the effective date (2021 tax year and prior), taxpayers were able to immediately expense R&D costs under Section 174(a) or had the option to capitalize and amortize R&D expenditures over a 5-year recovery period under Section 174(b).

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. OBBBA introduces significant changes to U.S. income-tax legislation. Key provisions affecting the Company include (i) permanent immediate expensing of domestic research and experimental expenditures starting January 1, 2025, and (ii) 100 percent bonus depreciation for qualified property placed in service after January 19, 2025. The Company has evaluated the current legislation at this time and has appropriately adopted the new rules under OBBBA.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures. Under the ASU, public business entities (“PBEs”) must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate).” FASB released the ASU in response to stakeholder feedback indicating that “the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.”

The ASU’s amendments are effective for PBEs for annual periods beginning after December 15, 2024. The Company adopted ASU 2023‑09 in the current annual period and elected to apply the amendments retrospectively to all periods presented to enhance comparability of income tax disclosures, including the rate reconciliation and disaggregation of income taxes paid.