Company: APM
Filing Date: 2025-07-15
Form Type: DRS
Source: 0001213900-25-063899
Chunk: 402

Company: Aptorum Group Ltd
Filing Date: 2025-07-15
Form: DRS
Chunk 402
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 expected profitability by tax jurisdiction. A valuation allowance
for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred
tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including
a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes
more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurement and Disclosures,
requires all entities to disclose the fair value of financial instruments, both assets and liabilities for which it is practicable to
estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current
transaction between willing parties. As of May 31, 2024 and 2023, the recorded values of cash, accounts receivable, accounts payable and
accrued expenses, and convertible note payable to founder approximate the fair values due to the short-term nature of the instruments.
See note 7, Convertible Notes Payable – Founder.

The Company determines the fair value of financial
and non-financial assets using the highest level inputs available in the fair value hierarchy, which establishes three levels of inputs
that may be used to measure fair value as follows:

Level 1: Inputs that reflect unadjusted quoted
prices in active markets that are accessible for identical assets or liabilities;

<div align='center'>F-9</div>

Level 2: Inputs include quoted prices for similar
assets and liabilities in active or inactive markets or that are observable for the asset or liability either directly or indirectly;
and

Level 3: Unobservable inputs that are supported
by little or no market activity.

Since inception, the Company has made certain
fair value estimates that are not recurring, generally related to share values and expected volatility, compensation expense and interest
expense. Such estimates involve managements review of available information of comparable companies and are therefore, generally nonobservable
Level 3 inputs.

Concentrations of Credit Risk

Cash, cash equivalents and accounts receivable
potentially subject the Company to concentration of credit risk. Cash and cash equivalents are held at U.S. FDIC-insured financial institutions
and the amounts on deposit are sometimes above the FDIC insured limits of up to $250,000 per account.

Intangible Assets