Company: APM
Filing Date: 2025-07-15
Form Type: DRS
Source: 0001213900-25-063906
Chunk: 388

Company: Aptorum Group Ltd
Filing Date: 2025-07-15
Form: DRS
Chunk 388
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000 would not be required to recognize any gain or loss or include any part of the all earnings and profits amount in income under Section 367(b) of the Code in connection with the Domestication. Effect of the PFIC Rules on the Domestication Aptorum’s status as a PFIC. If Aptorum would be a Passive Foreign Investment Company (“PFIC”) with respect to a U.S. Holder if for any taxable year in which the U.S. Holder held Aptorum shares (i) at least 75% of Aptorum’s gross income for the taxable year was passive income, or (ii) at least 50% of the value, determined on the basis of a quarterly average, of Aptorum’s assets was attributable to assets that produced, or were held for the production of, passive income. Passive income generally includes dividends, interest, rents, certain royalties and gains from the disposition of passive assets. Once a foreign corporation is classified as a PFIC for any taxable year during which a U.S. holder owns stock in the foreign corporation, the foreign corporation generally remains thereafter classified as a PFIC with respect to that U.S. holder. If Aptorum is treated as owning its VIE (and therefore the VIE’s subsidiaries) for purposes of U.S. federal income tax laws, then in determining its PFIC status it could take into account all of the income and assets of the subsidiaries of its VIE and, based on Aptorum’s financial statements, Aptorum would not be considered a PFIC. Aptorum does not own an equity interest in its VIE. Instead, through another wholly -ownedsubsidiary, it controls and receives the economic benefits of the VIE’s and its subsidiaries’ business operations through a series of contractual arrangements which are designed to provide Aptorum with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of the VIE, including absolute control rights and the rights to the assets, property and revenue of the VIE. There is no authority as to whether such an arrangement constitutes ownership of the VIE by Aptorum for purposes of U.S. federal income tax law. While its contractual arrangements with the VIE would seem to give Aptorum an ownership interest in the VIE as a practical matter, there is no assurance that the IRS or a U.S. court would determine that such ownership interest in fact exists. Accordingly, there can be no assurance that Aptorum will not be treated as a PFIC. 241 Effect of the