Company: APM
Filing Date: 2025-07-15
Form Type: DRS
Source: 0001213900-25-063899
Chunk: 401

Company: Aptorum Group Ltd
Filing Date: 2025-07-15
Form: DRS
Chunk 401
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acting parties might be prevented from fully
pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value
of the goods or services exchanged. See note 7, Convertible Notes Payable - Founders.

<div align='center'>F-8</div>

Research and Development Expenses

The Company expenses the cost of research and
development as incurred. Research and development expenses comprise costs incurred in performing research and development activities,
including clinical study costs, contracted services, and other external costs. Nonrefundable advance payments for goods and services that
will be used in future research and development activities are expensed when the activity is performed or when the goods have been received,
rather than when payment is made, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 730, Research and Development.

Property and Equipment

Equipment is carried at cost and depreciated on
a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major
replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed
from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility
of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be
recoverable.

Accounting for Income Taxes

As a result of the Share Exchange, the Company’s
results of operations will be taxed as a C Corporation beginning on October 1, 2014. Prior to the Share Exchange, the Company’s
operations were taxed as a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss
was required to be reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has
been provided in the accompanying consolidated financial statements for periods prior to October 1, 2014.

The Company recognizes deferred tax liabilities
and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred
tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which
tax assets and credit carryforwards will result in a benefit based on