Company: APM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001213900-25-037669
Chunk: 235

Company: Aptorum Group Ltd
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 235
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 period during which a director, employee, external consultant or advisor is required to provide service in exchange for the awards,
usually the vesting period, which is generally from9.5months to21.5months. Share-based compensation expense is recognized on a graded
vesting basis, net of actual forfeitures in the period.

Share-based compensation expense is recorded in
cost of healthcare services, research and development expenses, general and administrative fees and legal and professional fees in the
consolidated statements of operations and comprehensive loss.

In accordance with ASC 718, modifications to stock-based
awards are accounted for as exchanges of the original awards for new awards. The incremental fair value, which is the difference between
the fair value of the modified award and the original award immediately before modification, is measured at the modification date. This
incremental fair value is recognized immediately as compensation cost for vested awards. For unvested awards, the incremental compensation
cost, along with any remaining unrecognized compensation cost of the original award, is recognized over the remaining requisite vesting
period.

Income taxes

The Group accounts for income taxes under the
asset and liability method. Under this method, deferred income taxes are determined based on differences between the financial carrying
amounts of existing assets and liabilities and their tax bases. Income taxes are provided for in accordance with the laws of the relevant
taxing authorities.

A valuation allowance is provided for deferred
tax assets if it is more likely than not that these items will either expire before the Group is able to realize their benefits, or that
future deductibility is uncertain. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.

Uncertain tax positions

The Group accounts for uncertainty in income taxes
using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition
by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit,
including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest
amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized
and recorded as necessary in the provision for income taxes. The Group recognizes interest on non-payment of income taxes and penalties
associated with tax positions when a tax position does not meet more likely than not thresholds be sustained under examination. The tax
returns of the