Company: APM
Filing Date: 2025-07-15
Form Type: DRS
Source: 0001213900-25-063899
Chunk: 175

Company: Aptorum Group Ltd
Filing Date: 2025-07-15
Form: DRS
Chunk 175
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 Development Expenses

The Company believes its 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 “Business— Lead Projects.”

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 million, $5.2 million, and $9.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, representing
approximately 55.7%, 46.6%, and 49.0% of our total operating expenses for the respective period.

We have been able to fund
the research and development expenses for our drug candidates through a range of sources, including the proceeds raised from our public
offering and follow-on offerings on Nasdaq, private placement to other investors and line of credit facilities from shareholders, related
parties, and banks.

This diversified approach
to funding allows us to not depend on any one method of funding for our research and development activities, thereby reducing the risk
that sufficient financing will be unavailable as we continue to accelerate the development of our drug candidates.

RESULTS OF OPERATIONS

Results of Operations for the Years ended December