Company: APM
Filing Date: 2025-10-06
Form Type: S-4
Source: 0001213900-25-096656
Chunk: 162

Company: Aptorum Group Ltd
Filing Date: 2025-10-06
Form: S-4
Chunk 162
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 could affect the reliability of its financial statements, and have other adverse consequences. DiamiR is a private company with limited accounting personnel and other resources with which to address its internal controls and procedures. It believes its current systems and internal controls are sufficient to ensure that its financial reporting is accurate at this stage of its operations. In connection with the audits of DiamiR’s financial statements for the years ended May 31, 2025 and 2024, material weaknesses in its internal control over financial reporting were identified in relation to its lack of in -houseexpertise related to U.S. GAAP, as well as the absence of comprehensive written control policies, or an internal audit function to ensure its internal controls are properly designed and implemented. There is also a lack of segregation of duties in financial reporting, and DiamiR does not have an audit committee. These material weaknesses are due to DiamiR’s lack of working capital to hire additional staff. At its present state of development, DiamiR currently lacks the resources necessary to put in place such controls and procedures or to effectively monitor certain functions related to its controls and procedures. To date, DiamiR has relied on third -partyconsultants to supplement its financial reporting and controls and procedures. Given that DiamiR has been operating as a private company, it did not have the necessary formalized processes to effectively implement review controls within its internal control over financial reporting. If DiamiR fails to implement any required improvements to address any material weaknesses in its internal control over financial reporting, such material weaknesses could result in inaccuracies in its financial statements and could also impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. The elimination of personal liability against DiamiR’s directors and officers under Delaware law and the existence of indemnification rights held by its directors, officers and employees may result in substantial expenses. DiamiR’s bylaws (“Bylaws”) provides that it is obligated to indemnify each of its directors or officers to the fullest extent authorized by Delaware law. Those indemnification obligations could expose DiamiR to substantial expenditures to cover the cost of settlement or damage awards against its directors or officers, which it may be unable 74 to afford. Further, those provisions and resulting costs may discourage DiamiR or its stockholders from bringing a lawsuit against any of its current or former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit its stockholders. DiamiR’s principal stockholders and management own a