Exhibit 99.1
Financial Statements
Table of Contents
F-1
APTORUM GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2024 and December 31, 2023
(Stated in U.S. Dollars)
| June 30, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Amounts due from related parties | ||||||||
| Other receivables and prepayments | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Long-term investments | ||||||||
| Intangible assets, net | ||||||||
| Long-term deposits | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Amounts due to related parties | $ | $ | ||||||
| Accounts payable and accrued expenses | ||||||||
| Operating lease liabilities, current | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, non-current | ||||||||
| Convertible notes to a related party | ||||||||
| Total Liabilities | $ | $ | ||||||
| Commitments and contingencies | ||||||||
| EQUITY | ||||||||
| Class A Ordinary Shares ($ | $ | $ | ||||||
| Class B Ordinary Shares ($ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total equity attributable to the shareholders of Aptorum Group Limited | ||||||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| Total equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
F-2
APTORUM GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the six months ended June 30, 2024 and 2023
(Stated in U.S. Dollars)
| For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Revenue | ||||||||
| Healthcare services income | $ | $ | ||||||
| Operating expenses | ||||||||
| Costs of healthcare services | ( | ) | ||||||
| Research and development expenses | ( | ) | ( | ) | ||||
| General and administrative fees | ( | ) | ( | ) | ||||
| Legal and professional fees | ( | ) | ( | ) | ||||
| Other operating expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Other income (expenses) | ||||||||
| Loss on investments in marketable securities, net | ( | ) | ||||||
| Interest expense, net | ( | ) | ( | ) | ||||
| Loss on disposal of subsidiaries | ( | ) | ||||||
| Sundry income | ||||||||
| Total other income (expenses), net | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Less: net loss attributable to non-controlling interests | ( | ) | ( | ) | ||||
| Net loss attributable to Aptorum Group Limited | $ | ( | ) | $ | ( | ) | ||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted-average shares outstanding – basic and diluted | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income (loss) | ||||||||
| Exchange differences on translation of foreign operations | ( | ) | ||||||
| Other comprehensive income (loss) | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Less: comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to the shareholders of Aptorum Group Limited | ( | ) | ( | ) | ||||
See accompanying notes to the unaudited condensed consolidated financial statements.
F-3
APTORUM GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six months ended June 30, 2024 and 2023
(Stated in U.S. Dollars)
| Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated deficit | Accumulated other comprehensive (loss) income | Non- controlling interests | Total | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||
| Balance, January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Conversion of Class B Ordinary Shares to Class A Ordinary Shares | ( | ) | ( | ) | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Exercise of share options | ||||||||||||||||||||||||||||||||||||
| Exchange difference on translation of foreign operations | - | - | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Balance, January 1, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Adjustment for change of par value | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of shares to non-controlling interest | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of shares in exchange of share options and settlement of liabilities | - | |||||||||||||||||||||||||||||||||||
| Issuance of shares for share-based compensation | - | |||||||||||||||||||||||||||||||||||
| Issuance of shares | - | |||||||||||||||||||||||||||||||||||
| Exercise of share options | - | |||||||||||||||||||||||||||||||||||
| Exercise of convertible notes | - | |||||||||||||||||||||||||||||||||||
| Rounding up for reverse stock split | - | |||||||||||||||||||||||||||||||||||
| Exchange difference on translation of foreign operations | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
F-4
APTORUM GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2024 and 2023
(Stated in U.S. Dollars)
| For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization and depreciation | ||||||||
| Share-based compensation | ||||||||
| Issuance of shares for share-based compensation | ||||||||
| Loss on investments in marketable securities, net | ||||||||
| Gain on disposal of fixed assets | ( | ) | ( | ) | ||||
| Impairment loss on long-lived assets | ||||||||
| Impairment loss on inventories | ||||||||
| Impairment loss on receivables | ||||||||
| Operating lease cost | ||||||||
| Interest income | ( | ) | ||||||
| Interest expense | ||||||||
| Reversal of deferred cash bonus | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Other receivables and prepayments | ( | ) | ( | ) | ||||
| Long-term deposits | ||||||||
| Amounts due from related parties | ( | ) | ||||||
| Amounts due to related parties | ||||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Loan to related parties | ( | ) | ||||||
| Loan repayment from a related party | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Proceeds from sale of marketable securities | ||||||||
| Proceeds from disposal of fixed assets | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from financing activities | ||||||||
| Loan from banks | ||||||||
| Repayment of bank loan | ( | ) | ||||||
| Issuance of convertible notes | ||||||||
| Settlement of loan from a related party | ( | ) | ||||||
| Exercise of options and warrants | ||||||||
| Loan from a related party | ||||||||
| Proceeds from issuance of Class A Ordinary Shares, net | ||||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash and restricted cash | ( | ) | ( | ) | ||||
| Cash and restricted cash- Beginning of period | ||||||||
| Cash and restricted cash - End of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash operating, investing and financing activities | ||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||
| Convertible notes converted to Class A Ordinary Shares | $ | $ | ||||||
| Settlement of deferred cash bonus by issuance of share options or shares | $ | |||||||
| Reconciliation of cash and restricted cash | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and restricted cash shown on the unaudited condensed consolidated statements of cash flows | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
F-5
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
1. ORGANIZATION
The unaudited condensed consolidated financial statements include the financial statements of Aptorum Group Limited (the “Company”) and its subsidiaries and variable interest entities (“VIEs”) of which the Company is the primary beneficiary (collectively the “Group”).
The Company, formerly known as APTUS Holdings Limited and STRIKER ASIA OPPORTUNITIES FUND CORPORATION, is a company incorporated on September 13, 2010 under the laws of the Cayman Islands with limited liability.
The Company researches and develops life science and biopharmaceutical products within its wholly-owned subsidiary, Aptorum Therapeutics Limited, formerly known as APTUS Therapeutics Limited (“Aptorum Therapeutics”) and its indirect subsidiary companies (collectively, “Aptorum Therapeutics Group”).
2. GOING CONCERN
The Group reported a net loss of $
In additions, the Group terminated the Agreement and Plan of Merger dated March 1, 2024 (the “Merger Agreement”) which originally aimed to facilitate the reverse takeover of YOOV resulting in YOOV becoming the major shareholder of the Group upon completion. This termination, together with recurring net losses and net operating cash outflow, may raise substantial doubt about the Group’s ability to continue as a going concern.
The Group’s liquidity is based on its ability to enhance its operating cash flow position, obtain capital financing from equity interest investors and borrow funds to fund its general operations and capital expenditure. The Group will need to maintain its operating costs at a level through strict cost control and budget, such as staff reduction, to ensure operating costs are minimized and will not exceed such aforementioned sources of funds to continue as a going concern for a period within 12 months after the issuance of its unaudited condensed consolidated financial statements. The Group’s ability to continue as a going concern is dependent on management’s ability to execute its business plan successfully.
If the Group determines that its cash requirements exceed the amount of cash and cash equivalents the Group has at the time, the Group may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity or convertible debts would result in further dilution to its shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict its operations. The Group cannot assure that the financing will be available in amounts or on terms acceptable to the Group, if at all. However, the management plans cannot alleviate the substantial doubt of the Group’s ability to continue as a going concern. There can be no assurance that the Group will be successful in achieving its strategic plans, that the Group’s future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If the Group is unable to raise sufficient financing or events or circumstances occur such that the Group does not meet its strategic plans, the Group will be required to reduce certain discretionary spending, alter or scale development programs, or be unable to fund capital expenditures, which would have a material adverse effect on the Group’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives.
The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the unaudited condensed consolidated financial statements have been prepared on a basis that assumes the Group will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
F-6
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of presentation and consolidation
The unaudited condensed consolidated financial statements of the Group are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and accompanying notes in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023. The unaudited condensed consolidated financial statements include the accounts of the Company, its direct and indirect wholly and majority owned subsidiaries. In accordance with the provisions of Accounting Standards Codification (“ASC”) 810, Consolidation, the Group also consolidate any variable interest entity (“VIE”) of which the Company is the primary beneficiary. The Group do not consolidate a VIE in which the Company has a majority ownership interest when the Company is not considered the primary beneficiary. The Company has determined that the Company is not the primary beneficiary of one of the VIE (see Note 13, Variable Interest Entity). The Company evaluates its relationships with the VIE on an ongoing basis to determine whether it becomes the primary beneficiary. All material intercompany balances and transactions have been eliminated in preparation of the consolidated financial statements.
Use of estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as income and expenses during the reporting period. Significant accounting estimates reflected in the Group’s unaudited condensed consolidated financial statements include fair value of long-term investments, fair value measurement for share options, impairment of long-lived assets, allowance for credit losses and valuation allowance for deferred tax assets. Actual results could differ from those estimates.
Impairment of long-lived assets
The Group prepares a qualitative assessment, and if necessary, a quantitative assessment, in determining whether long-lived assets may be impaired. The factors considered in the qualitative assessment include macroeconomic conditions, industry and market conditions and overall financial performance of the Group, among other factors. Under a quantitative assessment, the Group compares the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows.
Long-term investments
The Group’s long-term investments consist of equity method investment in common stocks and non-marketable investments in non-redeemable preferred shares of privately-held companies that are not required to be consolidated under the variable interest or voting models. Long-term investments are classified as non-current assets on the unaudited condensed consolidated balance sheets as those investments do not have stated contractual maturity dates.
F-7
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Non-marketable investments
The non-marketable equity securities not accounted for under the equity method are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach as of the transaction date. The Group also makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in earnings equal to the difference between the carrying value and fair value.
Equity method investment – Fair value option
The Group elects the fair value option for an investment that would otherwise be accounted for using the equity method of accounting. Such election is irrevocable and is applied on an investment by investment basis at initial recognition. The fair value of such investments is based on quoted prices in an active market, if any, or recent orderly transactions for identical or similar investment of the same issuer. Changes in the fair value of these equity method investments are recognized in other income (expenses), net in the unaudited condensed consolidated statement of operations and comprehensive loss.
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.
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.
The Group determines the transaction price based
on established billing rates. The Group considers the patient’s ability and intent to pay the amount of consideration upon admission. Subsequent
changes resulting from a patient’s ability to pay are recorded as bad debt expense, which is included as a component of other operating
expenses in the unaudited condensed consolidated statements of operations. During the six months ended June 30, 2024 and 2023, the
bad debt expenses were $
Recently adopted accounting pronouncements
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Group for the year ending December 31, 2024. The Group does not expect that the adoption of this guidance will have a material impact on the Group’s unaudited condensed consolidated financial statements.
F-8
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Recently issued accounting standards which have not yet been adopted
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU2023-07 are also required for public entities with a single reportable segment. The guidance is effective for the year ending December 31, 2024 and the subsequent interim periods. The Group expects the impact of adoption of this guidance to be limited to additional segment disclosures on the Group’s 2024 consolidated financial statements, and 2025 unaudited condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which improves income tax disclosures. The amendments require the disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendments also require disaggregated information about the amount of income taxes paid (net of refunds received), Income (or loss) from continuing operations before income tax expense (or benefit) and Income tax expense (or benefit) from continuing operations. The new guidance is required to be applied either prospectively or retrospectively. This guidance is effective for the Group for the year ending December 31, 2025. Management does not expect the adoption has material effect on the Group’s unaudited condensed consolidated financial statements.
4. REVENUE
For the six months ended June 30, 2023, all revenue came from provision of healthcare services in Hong Kong.
During the second quarter of 2023, the Group made a decision to streamline its operations by terminating clinic services and suspending non-lead R&D projects. No revenue was generated for the six months ended June 30, 2024.
5. INVESTMENT AND FAIR VALUE MEASUREMENT
Assets Measured at Fair Value on a Recurring Basis
The assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2024 and December 31, 2023 were $ and $ respectively.
During the six months ended June 30, 2024 and 2023, there were no movement in Level 3 assets measured and recorded at fair value on a recurring basis.
F-9
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Non-marketable investments
The Group’s non-marketable investments are investments in privately held companies without readily determinable fair values. The carrying value of the non-marketable investments are adjusted based on price changes from observable transactions of identical or similar securities of the same issuer (referred to as the measurement alternative) or for impairment if the carrying amount of the non-marketable investments may not be fully recoverable. Any changes in carrying value are recorded within other income (expenses), net in the unaudited condensed consolidated statements of operations and comprehensive loss.
During the six months ended June 30, 2024 and 2023, there were no movement in annual upward or downwards adjustments and impairment recorded in other income (expenses), net, and included as adjustments to the carrying value of non-marketable investments held as of June 30, 2024 and 2023 based on the observable price in an orderly transaction for the same or similar security of the same issuers.
During the six months ended June 30, 2023 and 2022, the Group did not sell any non-marketable investments or recorded any realized gains or losses for the non-marketable investments measured at fair value on a non-recurring basis.
| June 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| Initial cost basis | $ | $ | ||||||
| Upward adjustments | ||||||||
| Downward adjustments and impairment | ( | ) | ( | ) | ||||
| Total carrying value at the end of the period | $ | $ | ||||||
The Group did not transfer any non-marketable investments into marketable securities during the six months ended June 30, 2024 and 2023.
For the six months ended June 30, 2024 and year
ended December 31, 2023, one of the non-marketable investments with initial cost of $
F-10
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Equity method investment, fair value option
In December 2021, one of the Group’s subsidiaries,
Libra Sciences Limited (“Libra”, formerly known as Aptorum Pharmaceutical Development Limited), issued Class A and Class B
ordinary shares to various parties in exchange of licenses or cash.
6. OTHER RECEIVABLES AND PREPAYMENTS
| June 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| Prepaid research and development expenses | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Prepaid service fee | ||||||||
| Rental deposits | ||||||||
| Prepaid rental expenses | ||||||||
| Receivables for reimbursement of reverse takeover related expenses | ||||||||
| Other receivables | ||||||||
| Others | ||||||||
| $ | $ | |||||||
F-11
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
7. PROPERTY AND EQUIPMENT, NET
| June 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| Computer equipment | $ | $ | ||||||
| Furniture, fixture, and office and medical equipment | ||||||||
| Leasehold improvements | ||||||||
| Laboratory equipment | ||||||||
| Motor vehicle under finance leases | ||||||||
| Less: accumulated depreciation and impairment | ||||||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expenses for property and equipment
amounted to $
During the six months ended June 30, 2024, an
impairment loss relating to laboratory equipment, computer equipment, and furniture, fixture, and office equipment amounted to $
During the six months ended June 30, 2024 and
2023, gain on disposal of fixed assets of $
8. INTANGIBLE ASSETS, NET
Amortization expenses for intangible assets amounted
to $
During the six months ended June 30, 2024, an
impairment loss amounted to $
9. LONG-TERM DEPOSITS
| June 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| Rental deposits | $ | $ | ||||||
F-12
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| June 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| Deferred bonus and salaries payable | $ | $ | ||||||
| Research and development expenses payable | ||||||||
| Professional fees payable | ||||||||
| Cost of healthcare services payable | ||||||||
| Insurance expenses payable | ||||||||
| Others | ||||||||
| $ | $ | |||||||
On March 31, 2023, the Group entered into exchange
agreements and cancelled
On March 31, 2023, the Group entered into exchange
agreements and cancelled
11. INCOME TAXES
The Company and its subsidiaries file tax returns separately.
Income taxes
Cayman Islands: under the current laws of the Cayman Islands, the Company and its subsidiaries in the Cayman Islands are not subject to taxes on their income and capital gains.
Hong Kong: in accordance with the relevant tax
laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax
rate on taxable income. All the Hong Kong subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of
United Kingdom: in accordance with the relevant
tax laws and regulations of United Kingdom, a company registered in the United Kingdom is subject to income taxes within the United Kingdom
at the applicable tax rate on taxable income. All the United Kingdom subsidiaries that are not entitled to any tax holiday were subject
to income tax at a rate of
Singapore: in accordance with the relevant tax
laws and regulations of Singapore, a company registered in the Singapore is subject to income taxes within Singapore at the applicable
tax rate on taxable income. All the Singapore subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate
of
F-13
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
United States (Nevada): in accordance with the
relevant tax laws and regulations of the United States, a company registered in the United States is subject to income taxes within the
United States at the applicable tax rate on taxable income. All the United States subsidiaries in Nevada that are not entitled to any
tax holiday were subject to income tax at a rate of
On a semi-annually basis, the Group evaluates the realizability of deferred tax assets by jurisdiction and assesses the need for a valuation allowance. In assessing the realizability of deferred tax assets, the Group considers historical profitability, evaluation of scheduled reversals of deferred tax liabilities, projected future taxable income and tax-planning strategies. Valuation allowances have been provided on deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. After consideration of all positive and negative evidence, the Group believes that as of June 30, 2024, it is more likely than not the deferred tax assets will not be realized.
12. RELATED PARTY BALANCES AND TRANSACTIONS
The following is a list of a director and related parties to which the Group has transactions with:
| (a) | Ian Huen, the Chief Executive Officer and Executive Director of the Group since November 2023. He was a Non-executive Director from June 2022 to November 2023. Before June 2022, he was the Chief Executive Officer and Executive Director; |
| (c) | Charles Bathurst, an Independent Non-Executive Director of the Group; |
| (d) | CGY Investment Limited, an entity owns more than |
| (f) | Aeneas Group Limited, an entity controlled by Ian Huen; |
| (h) | Aeneas Management Limited, an entity controlled by Ian Huen; |
| (i) | Talem Medical Group Limited, an entity controlled by Ian Huen; |
| (j) | Jurchen Investment Corporation, the holding company and an entity controlled by Ian Huen; |
| (k) | Libra Sciences Limited, an entity which was originally a wholly owned subsidiary of Aptorum Therapeutics Limited (“ATL”). Since December 30, 2021, Libra has been turned into a related party to the Group due to the voting power owned by ATL is decreased to below |
| ACC Medical Limited, an entity controlled by Clark Cheng, a former Executive Director of the Group before November 30, 2023. |
Amounts due from related parties
| June 30, 2024 | December 31, 2023 | |||||||
| Current | (Unaudited) | |||||||
| Aeneas Management Limited | $ | $ | ||||||
| Charles Bathurst | ||||||||
| Libra Sciences Limited (Note b) | ||||||||
| Allowance for credit loss | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
F-14
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Amounts due to related parties
| June 30, 2024 | December 31, 2023 | |||||||
| Current | (Unaudited) | |||||||
| Aeneas Group Limited (Note a) | $ | $ | ||||||
| Non-current | ||||||||
| Jurchen Investment Corporation (Note 16) | $ | $ | ||||||
Related party transactions
| For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Loan from a related party (Note a) | ||||||||
| - Aeneas Group Limited | $ | $ | ||||||
| Settlement of loan from a related party through issuance of Convertible Note (Note 16) | ||||||||
| - Aeneas Group Limited | $ | $ | ||||||
| Interest expenses (Note a and Note 16) | ||||||||
| - Aeneas Group Limited | $ | $ | ||||||
| - Jurchen Investment Corporation | $ | |||||||
| Loan to a related party (Note b) | ||||||||
| - Libra Sciences Limited | $ | $ | ||||||
| Repayment of loan and interest from a related party (Note b) | ||||||||
| - Talem Medical Group Limited | $ | $ | ||||||
| Interest incomes (Note b) | ||||||||
| - Talem Medical Group Limited | $ | $ | ||||||
| - Libra Sciences Limited | $ | $ | ||||||
| Consultant, management and administrative fees (Note c) | ||||||||
| - CGY Investments Limited | $ | $ | ||||||
| - ACC Medical Limited | $ | $ | ||||||
| Administrative fees income (Note e) | ||||||||
| - Libra Sciences Limited | $ | $ | ||||||
F-15
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Note a: On August 13, 2019, Aptorum Therapeutics
Limited (“ATL”), a wholly owned subsidiary of the Company, entered into financing arrangements with Aeneas Group Limited,
a related party, and Jurchen Investment Corporation, the ultimate parent of the Group, allowing ATL to access up to a total $
Note b: On November 17, 2021, Aptorum Therapeutics
Limited (the “Lender”) entered into a loan agreement with Talem Medical Group Limited (the “Borrower”). According
to the loan agreement, the Lender granted a loan of up to AUD4,
On January 13, 2022, ATL entered a line of credit
facility with Libra Sciences Limited to provide up to a total $
Note c: CGY Investment Limited provided certain
consultancy, advisory and management services to the Group on potential investment projects related to healthcare or R&D platforms.
CGY Investment Limited is initially entitled to receive HK $
ACC Medical Limited provided certain consultancy,
advisory, and management services to the Group on clinic operations and other related projects for clinics’ business development.
ACC Medical Limited is initially entitled to receive HK $
Note d: On February 25, 2023, Aptorum Medical
Limited further issued 122 shares to Clark Cheng in according to the appointment agreement, decreasing the equity interest held by the
Company from
Note e: On January 1, 2022, Aptus Management Limited
(“AML”), a wholly owned subsidiary of the Company, entered into an administrative management services agreement with Libra
Sciences Limited. According to the agreement, AML will provide documentation and administrative services, include but are not limited
to human resources and payroll administration, general secretarial and administrative support, and accounting and financial reporting
services. AML is entitled to receive a fixed amount of services fees of HKD
Note f: In accordance with mutual agreements reached
with the board of directors, Mr. Ian Huen agreed to forgo their monthly remuneration effective July 1, 2023 until further notice. Moreover,
Mr. Darren Lui and Mr. Clark Cheng, former executive directors before their resignation in November 2023, consented to suspend their monthly
remuneration from August 1, 2023 and July 1, 2023, respectively. Additionally, all independent non-executive directors have consented
to suspend their monthly remuneration from September 1, 2023 until further notice. Before the suspension of remuneration, Mr. Ian Huen,
Mr. Clark Cheng, and Mr. Darren Lui had a monthly remuneration of $
F-16
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
13. VARIABLE INTEREST ENTITY
The Company consolidates VIEs in which the Group has a variable interest and is determined to be the primary beneficiary. This determination is based on whether the Group has a variable interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Group continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Group is involved with the VIE.
On December 30, 2021, three of the Group’s
subsidiaries, Libra Sciences Limited (“Libra”, formerly known as Aptorum Pharmaceutical Development Limited),
Mios Pharmaceuticals Limited (“Mios”) and Scipio Life Sciences Limited (“Scipio”), issued Class A and Class B
ordinary shares to various parties; for each such entity,
The Company has considered each of these entity’s Memorandum and Article of Association and their respective board of directors (the sole director of each of Mios and Scipio is an executive director of the Group), and determined that The Company has the power to manage and make decisions that affect Mios and Scipio’s research and development activities, which activities most significantly impact Mios and Scipio’s economic performance. However, the Company does not have such power over Libra’s research and development activities, which activities most significantly impact Libra’s economic performance. Accordingly, the Company determined that it is the primary beneficiary of Mios and Scipio, but not the primary beneficiary of Libra.
| Assets | Liabilities | Net Assets | ||||||||||
| June 30, 2024 (Unaudited) | ||||||||||||
| Total | $ | $ | $ | |||||||||
| Assets | Liabilities | Net Assets | ||||||||||
| December 31, 2023 | ||||||||||||
| Total | $ | $ | $ | |||||||||
F-17
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
| Assets | Liabilities | Net Assets | Maximum Exposure to Losses | |||||||||||||
| June 30, 2024 (Unaudited) | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Assets | Liabilities | Net Assets | Maximum Exposure to Losses | |||||||||||||
| December 31, 2023 | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The Group’s maximum exposure to loss from
its involvement with unconsolidated VIE represents the estimated loss that would be incurred if the VIE is liquidated, so that the fair
value of the equity investment in VIE is
14. LEASE
As of June 30, 2024, the Group has a non-short-term
operating lease for laboratory with remaining term expiring in 2026 and a remaining lease term of
| For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Lease cost | ||||||||
| Finance lease cost: | ||||||||
| Depreciation | $ | $ | ||||||
| Interest on lease liabilities | ||||||||
| Operating lease cost | ||||||||
| Short-term lease cost | ||||||||
| Variable lease cost | ||||||||
| Sublease income | ||||||||
| Total lease cost | $ | $ | ||||||
| Other information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Financing cash flows from finance leases | ||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | ||||||||
| Weighted-average remaining lease term – finance leases | ||||||||
| Weighted-average remaining lease term – operating leases | ||||||||
| Weighted-average discount rate – finance leases | % | % | ||||||
| Weighted-average discount rate – operating leases | % | % | ||||||
F-18
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
During the six months ended June 30, 2024 and
2023, an impairment loss of $
| June 30, 2024 | ||||
| (Unaudited) | ||||
| Remaining periods ending December 31, | ||||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| Total future undiscounted cash flow | ||||
| Less: Discount on operating lease liabilities | ( | ) | ||
| Present value of operating lease liabilities | ||||
| Less: Current portion of operating lease liabilities | ( | ) | ||
| Non-current portion of operating lease liabilities | $ | |||
15. ORDINARY SHARES
On March 26, 2021, the Company entered into an
at-the-market offering agreement (the “Sales Agreement”), with H.C. Wainwright & Co., LLC, acting as its sales agent
(the “Sales Agent”), relating to the sale of its Class A Ordinary Shares, offered pursuant to the prospectus supplement and
the accompanying prospectus to the registration statement on Form F-3 (File No. 333-235819) (such offering, the “ATM Offering”,
or “At The Market Offering”). In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of
its Class A Ordinary Shares having an aggregate offering price of up to $
On January 23, 2023, the Company effectuate a
On February 21, 2023, the Company was merged with Aptorum Group Cayman Limited, a newly established wholly owned subsidiary of the Company, whereby the Company is the surviving company on the terms of the plan of merger. According to the plan of merger, the par value of its Class A and Class B Ordinary Shares are changed from to .
On March 31, 2023, the Group issued
On March 31, 2023, the Group also issued
F-19
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
For the six months ended June 30, 2024 and 2023,
the Group issued
For the six months ended June 30, 2024, the Group
issued
For the six months ended June 30, 2023, the Group
issued
Holders of Class A Ordinary Shares and Class B
Ordinary Shares have the same rights except for the following: (i) each Class A Ordinary Share is entitled to
16. CONVERTIBLE NOTE
On June 28, 2023, the Group entered into a securities
purchase agreement with 4 investors. Pursuant to the securities purchase agreement, the investors are purchasing a convertible note in
the original principal amount of $
On September 11, 2023, the Group entered into
a securities purchase agreement with Jurchen Investment Corporation, the largest shareholder of the Company, pursuant to which the Group
sold a secured convertible note in the aggregate principal amount of $
17. SHARE BASED COMPENSATION
Share option plan
On March 31, 2023, the Group entered into exchange
agreements and cancelled
F-20
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
| Number of share options | Weighted average exercise price $ | Remaining contractual term in years | Aggregate Intrinsic value $ | |||||||||||||
| Outstanding, January 1, 2024 | - | |||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Outstanding, June 30, 2024 | ||||||||||||||||
| Exercisable, June 30, 2024 | ||||||||||||||||
| Outstanding, January 1, 2023 | - | |||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Modified | ( | ) | ||||||||||||||
| Outstanding, June 30, 2023 | ||||||||||||||||
| Exercisable, June 30, 2023 | ||||||||||||||||
The weighted-average grant date fair value of
share option grants during the six months ended June 30, 2023 was $
| Granted in 2023 | ||||
| Expected volatility | % | |||
| Risk-free interest rate | % | |||
| Expected term from grant date (in years) | ||||
| Dividend rate | ||||
| Dilution factor | ||||
| Fair value | $ | |||
In connection with the grant of share options
to employees and non-employees, the Group recorded share-based compensation charges of $
F-21
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
18. NET LOSS PER SHARE
| For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Numerator: | ||||||||
| Net loss attributable to Aptorum Group Limited | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Basic and diluted weighted average shares outstanding | ||||||||
| Basic and diluted loss per share | $ | ( | ) | $ | ( | ) | ||
Basic loss per share is computed by dividing net
loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted loss
per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or
converted into ordinary shares. Potential dilutive securities are excluded from the calculation of diluted loss per share in loss periods
as their effect would be anti-dilutive. For the six months ended June 30, 2024 and 2023, the total number of share options, warrants and
convertible notes excluded from the calculation of diluted earnings per share due to their anti-dilutive nature, are
19. COMMITMENTS AND CONTINGENCIES
Contingent payment obligation
As of June 30, 2024, the Group does not have any non-cancellable purchase commitments.
The Group has contingency payment obligations under each of the license agreements, such as milestone payments, royalties, research and development funding, if certain condition or milestone is met.
F-22
APTORUM GROUP LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Milestone payments are to be made upon achievements
of certain conditions, such as Investigational New Drugs (“IND”) filing or U.S. Food and Drug Administration (“FDA”)
approval, first commercial sale of the licensed products, or other achievements.
| Amount | ||||
| (unaudited) | ||||
| Drug molecules: up to the conditions and milestones of | ||||
| Preclinical to IND filing | $ | |||
| From entering phase 1 to before first commercial sale | ||||
| First commercial sale | ||||
| Net sales amount more than certain threshold in a year | ||||
| Subtotal | ||||
| Diagnostics technology: up to the conditions and milestones of | ||||
| Before FDA approval | ||||
| Total | $ | |||
For the six months ended June 30, 2024 and 2023,
the Group incurred $
Legal proceedings
From time to time, the Group may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Group does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of income or liquidity.
20. SUBSEQUENT EVENTS
The Group has evaluated subsequent events through the date of issuance of the unaudited condensed consolidated financial statements. Except for the events disclosed elsewhere in the unaudited condensed financial statements and the following events with material financial impact on the Group’s unaudited condensed consolidated financial statement, no other subsequent event is identified that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
On October 25, 2024, the Group and YOOV Group Holding Limited, a company organized under the laws of the British Virgin Islands (“YOOV”), mutually agreed to terminate the Agreement and Plan of Merger dated March 1, 2024 (the “Merger Agreement”). The Merger Agreement originally aimed to facilitate the reverse takeover of YOOV resulting in YOOV becoming the major shareholder of the Group upon completion. However, both parties concluded that the conditions required to finalize the merger were no longer feasible.
F-23