Company: APM
Filing Date: 2025-07-15
Form Type: DRS
Source: 0001213900-25-063899
Chunk: 404

Company: Aptorum Group Ltd
Filing Date: 2025-07-15
Form: DRS
Chunk 404
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 activities but is not required to achieve any specified identified results. Accordingly, these grants do not contain general
payback provisions. However, the Company’s performance, costs and compliance are subject to periodic audit and the Company may be
required to repay funds already received in the event of noncompliance. Grant-years ending after May 31, 2023 remained subject to audit
as of May 31, 2024.

As of May 31, 2024, the Company was eligible to
receive up to $0.5 million of additional funding through August 2025 to support future research under the grants, subject to availability
of funds and satisfactory progress, as determined by the NIH.

Accounting for Derivative Financial Instruments

The Company evaluates stock options, stock warrants
or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted
for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity
(“ASC Topic 815-40”) and ASC Topic 470, Debt. The result of this accounting treatment could be that the fair value
of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as
a liability. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40
are reclassified to a liability account at the fair value of the instrument on the reclassification date. The Company has no financial
instruments meeting the criteria for derivative accounting as of May 31, 2024 and 2023.

Stock Based Compensation

The Company accounts for share-based compensation
arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs
related to all share-based payments including share options. The fair value method requires the Company to estimate the fair value of
share-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model
to estimate the fair value of options granted that are expensed on a straight-line basis over the requisite service period, which is generally
the vesting period. The Company accounts for forfeitures as they occur.

Leases

The Company accounts for its operating leases
under ASC 842, Leases. Accordingly, the Company determines whether a contract is, or contains, a lease at inception. Right-of-use
assets represent the Company’s