Company: APM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001213900-25-037669
Chunk: 234

Company: Aptorum Group Ltd
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 234
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 in fair value are not recognized.

Revenue recognition

Revenues are derived from healthcare services
rendered to patients for healthcare consultation and medical treatment. Revenue is reported at the amount that reflects the consideration
to which the Group expects to be entitled in exchange for providing healthcare services.

The Group recognizes revenue as its performance
obligations are completed. Healthcare services are treated as a single performance obligation satisfied at a point in time because the
performance obligations are generally satisfied over a period of less than one day.

Cost of healthcare services

Cost of healthcare services rendered represents
cost in relation to the medical services provided including the compensation of the physicians, cost of pharmaceutical supplies and medicine
and write-down of inventories.

Research and development expenses

Research and development costs are expensed as
incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including
amortization of the patent license, depreciation of laboratory equipment, costs of engaging external consultants, advisors and contracted
research organization to conduct preclinical development activities and trials, payroll expenses to research and development staff, sponsored
research expenses to universities and research institutions, and impairment of patent license and laboratory equipment.

F-13

APTORUM GROUP LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Stated in U. S. Dollars)

Government Subsidies

The Company’s subsidiaries received government
subsidies from certain local governments. The Company’s government subsidies consisted of specific subsidies that are subsidies
from the local government for a specific purpose, such as subsidies for research and development. The Company recorded specific subsidies
as other income which is included in the consolidated statements of income upon receipt as further performance by the Company is not required.
The government subsidies were approximately $0.9million, $0.1million and $0.3million for the years ended December 31, 2024, 2023
and 2022, respectively.

Share-based compensation

The Group uses the fair value method of accounting
for the share options granted to directors, employees, external consultants and advisors to measure the cost services received in exchange
for the share based awards. The fair value of share option awards with only service condition is estimated on the grant or offering date
using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate,
expected term and expected volatility. These inputs are subjective and generally require significant judgment. The resulting cost is recognized
over the