Company: APM
Filing Date: 2025-10-06
Form Type: S-4
Source: 0001213900-25-096656
Chunk: 126

Company: Aptorum Group Ltd
Filing Date: 2025-10-06
Form: S-4
Chunk 126
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 on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq Capital Market corporate governance requirements. Our status as a controlled company could cause Aptorum Class A ordinary share to look less attractive to certain investors or otherwise harm our trading price. 54 We may not be able to consolidate the financial results of some of our affiliated companies or such consolidation could materially adversely affect our operating results and financial condition. The Company has one VIE which is incorporated under the laws of Cayman Islands and conducts operations in Hong Kong. The Company does not currently consolidate this VIE since the Group does not have a variable interest in them and is not determined to be the primary beneficiary of it at this time under U.S. GAAP. This determination is based on whether the Group has a variable interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Group continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Group is involved with the VIE. According to those standards, we determined that we do not have the power to manage and make decisions that affect Libra’s research and development activities, which activities most significantly impact Libra’s economic performance. Accordingly, we determined that we are not the primary beneficiary of Libra. As a result, Libra’s financial results are not consolidated in our consolidated financial statements. If, in the future an affiliate company becomes a VIE and we become the primary beneficiary of it for accounting purposes, we would be required to consolidate that entity’s financial results in our consolidated financial statements. If we become the primary beneficiary of Libra and have to consolidate them into our consolidated financial statements, Libra and such entity’s financial results were negative, this could have a corresponding negative impact on our operating results.This could be because Libra is indebted to us and its operational performance or inability to generate sufficient cash flows. The Company’s