Company: APM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001213900-25-037669
Chunk: 155

Company: Aptorum Group Ltd
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4A
Chunk 155
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 with Notice dated September 3, 2024, taken out by Karen Cheung (a/k/a Wing TSZ
Cheung) as plaintiff against, among others, the Company as defendant in the Supreme Court of the State of New York County of New York,
in relation to an action to recover financial losses sustained by the plaintiff (the “ Case”). The Case is at the very early
stages of litigation and although we intend to defend the lawsuit, there can be no assurance regarding the ultimate outcome of this case.
Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates.
If management’s estimates prove incorrect, current reserves could be inadequate and we could incur a charge to earnings which could
have a material adverse effect on our results of operations, financial condition, net worth, and cash flows.

Factors Affecting our Results of Operations

Research and Development Expenses

We believe our ability to
successfully develop innovative drug candidates will be the primary factor affecting our long-term competitiveness, as well as our future
growth and development. Creating high quality global first-in-class or best-in-class drug candidates requires significant investment of
resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments in this area. As
a result of this commitment, our pipeline of drug candidates has been steadily advancing. For more information on the nature of the efforts
and steps necessary to develop our drug candidates, see Item 4. B. “ Business Overview - Lead Projects, Natural Supplements and
Other Projects under Development.”

Our drug candidates are still
in development, and we have incurred and will continue to incur significant research and development costs for pre-clinical studies and
clinical trials. We expect that our research and development expenses will significantly increase in future periods in line with the advancement
and expansion of the development of our drug candidates.

Research and development expenses
include:

  employee and consultant compensation related expenses, including salaries, benefits and share based compensation expenses;  

  expenses incurred for payments to CROs, investigators and clinical trial sites that conduct our clinical studies;  

  the cost of acquiring IP rights which did not meet the criteria of capitalization under the U. S. GAAP;  

  cost associated with sponsored research programs with various universities and research institutions  

  facilities, depreciation, and other expenses, which include office leases and other overhead expenses; and  

  costs associated with patent applications.  

Research and development expenses incurred totaled $2.2