Company: APM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001213900-25-037669
Chunk: 233

Company: Aptorum Group Ltd
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 233
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 contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings
as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
instrument.

The Group accounts for the convertible notes as
a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives. Additionally, the Group uses
the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of potential
share settlement for instruments that may be settled in cash or shares.

F-12

APTORUM GROUP LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in U. S. Dollars)

Operating leases

At the inception of a contract, the Group determines
if the arrangement is, or contains, a lease. Operating lease liabilities are recognized at lease commencement based on the present value
of lease payments over the lease term. Operating lease right-of-use assets are initially measured at cost, which comprises the initial
amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs
incurred and less any lease incentives received. As the rate implicit in the lease cannot be readily determined, the Group uses incremental
borrowing rate at the lease commencement date in determining the imputed interest and present value of lease payments. The incremental
borrowing rate is determined based on the rate of interest that the Group would have to pay to borrow an amount equal to the lease payments
on a collateralized basis over a similar term in a similar economic environment. The lease term for all of the Group’s leases includes
the non-cancellable period of the lease plus any additional periods covered by either a Group’s option to extend (or not to terminate)
the lease that the Group is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
For operating leases, the Group recognizes a single lease cost on a straight-line basis over the remaining lease term.

The Group has elected not to recognize right-of-use
assets or lease liabilities for leases with an initial term of 12 months or less and the Group recognizes lease expense for these leases
on a straight-line basis over the lease terms.

Warrants

In connection of the issuance of Class A Ordinary
Shares, the Company may issue warrants to purchase Class A Ordinary Shares. Warrants classified as equity are initially recorded at fair
value and subsequent changes